For most of us, the pandemic is a source of additional financial stress. I say “additional” because Gen X is used to being known as savings slackers, maybe due to our unique position of supporting both growing children and aging parents. That means worries about our family’s physical health are compounded by financial health concerns.
Then again, the Great Pause has also put the brakes on normal spending patterns. We’re more focused on what’s essential, and less able or interested in shopping for fun and sport.
This naturally compels us to become more aware of our finances — which makes it the perfect time to harness the power of a Japanese technique for mindful budgeting: kakeibo.
Kondo your financial house
Kakeibo (or kakebo) was created by Japanese journalist Hani Motoko in 1904 as a household accounting system, and it blends thoughtful goal-setting with bookkeeping. The results go beyond simply sticking to a budget and saving.
The Japanese believe that tidiness in one’s finances is as important as tidiness in one’s house — and indeed for them, the act of thinking mindfully about where one’s money goes is in itself a recipe for calm and well-being.
To get started, all you need is to know is how much money you have available and typically spend, plus a savings goal, and areas you’d like to improve. You’ll also need a pen and paper because this is a handwritten, visual practice.
How to use kakeibo
At the beginning of the month, you’ll figure out your budget by subtracting your fixed expenses (rent, food, transportation, medical, phone) from your income. You’ll also set a savings goal. Currently, this might seem impossible, but even a small amount does the trick.
Kakeibo has you put your expenditures in four buckets: needs (fixed expenses), leisure or wants (what you desire but isn’t necessary, like ordering in or purchasing trendy clothes), culture (buying books), and extras (unanticipated expenses or one-offs, like birthday gifts).
Each day, jot down what you spend in your ledger. Do this with pen and paper, in real-time. This gives you a chance to slow down to become conscious of your habits in the present and consider how it may affect your future.
At the end of the month, you’ll do a review of what you spent, by bucket. Not only will you see the big picture of whether you stuck to your budget and managed to save, but you’ll also notice your successes and your challenges.
Cultivating awareness helps relieve your worry and fear around money. Ultimately that’s the point of kakeibo: bringing balance and peace of mind into your day-to-day life. And that in its own right is, well, like money in the bank.
Kakebo: The Japanese Art of Saving Money | Amazon