Kakeibo, the art of saving

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Kakeibo, the art of saving

The 家計簿 (kakeibo) – literally household finance

ledger – is the essential tool used by any money-savvy
Japanese to manage the household finances. She would
diligently keep up her kakeibo every day, noting down
items in each budget category.

Kakeibo promises an automatic saving of 35% on the

household finances and learn how to use it is pretty
simple: record every expense and follow the instructions.
I said it was simple, right?

Although it might take some time to get used to record

every expense, the idea is that after some you will be
more aware of your financial habits and learn insights
on how you spend money: maybe you’re spending too
much on restaurants or maybe you should spend more
on culture. The book’s subtitle slogan is ‘memory can be
fuzzy, but the books are accurate’.

How to use a Kakeibo

1. A the beginning of the month write down your

fixed expenses and incomes (e.g. mortgage, rent,
broadband bill, etc.). The difference will show you
how much money you have available for the rest
of the month.
2. Estimate the savings that you want to achieve for
the month and set it aside. You should just forget
it and make everything possible to don’t touch it
during your weekly expenses.
3. During the month register the expenses in the
different categories:
Survival: food, pharmacy, transports, kids.
Optional
Optional: bars, restaurants, takeaway,
shopping, cigarettes
Culture: books, music, shows, movies,
magazines
Extra: irregular events such as gifts,
repairs, furniture
4. Establish the goals of the month (e.g. start to
save for your summer vacation)
5. Establish the promises of the month (e.g. stop
smoking, buy gas from the cheapest station)
6. At the end of the month (and the year) the battle
between the “savings pig” and the “expenses
wolf” starts: the difference between the initial
budget and the total monthly expenses will give
you the monthly savings.

Food on focus

One thing that all kakeibos focus on is food costs, since

food spending is both one&ofCookies
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categories and one of the easiest areas to cut down on
costs. Generally a kakeibo categorizes food purchases by
the nutritional type: carbohydrates, meat and fish, dairy
and eggs, vegetable and fruit, etc. which also gives you a
way to see if you are eating a healthy diet. More recent,
easier kakeibo may divide it into larger categories like
regular food, fun food (snacks and drinks), eating out,
and so on. There are kakeibos that combine budgeting
functions with meal planning and recipe tracking too.

Origins of the Kakeibo

The kakeibo has gained particular interest in Japan due

to a variety of cultural and economic factors. A lot is
owed Motoko Hani, the first female journalist in Japan.
She believed that financial stability was important for
happiness, and decided to publish a kakeibo (accounting
book designed for households) in a women’s magazine
in 1904. After 113 years this book is still sold.

While bookkeeping might not be as popular as it once

was due to a whole slew of cultural and economic
factors, it hasn’t faded out completely. Also, the recent
economic downturn, for example, has encouraged cash-
strapped families to economize as much as possible,
often with help of a kakeibo.

Delayed gratific ation

Most children in Japan get their first training in personal

finance at a young age from their parents. They are
taught that the more money they save, the higher the
quality of personal items they can buy in the future. It is
common for Japanese parents to urge their children to
keep their ‘otoshidama‘ (traditional cash gifts received
from relatives and friends) in the bank to avoid impulse
buying. Most parents instill in their children’s mind that
borrowing money from people is frowned upon in
Japanese society. So when there’s a chance, high school
students get a part-time job to fund a purchase outside
of the family budget. Over time, their money
management skills improve. Thus, by the time a man
starts his career and raises a family, he is well prepared
to manage his personal finances.

If we look at some statistics, in the UK, 4 in 10 adults

have less than £500 in savings and the average
household saves only 3.3% of their earnings. The
average American saves just 4% of her earnings. If we
take Japan instead, households averaged 11.82% from
1970 until 2017, reaching an all time high of 49.70% in
December of 2015 and a record low of -9.90% in May of
2012.

The Japanese love c ash

Another reason for the popularity of bookkeeping is that

most families, although use direct withdrawals to pay
for everything from school lunches to electrical bills,
expenses such as gas, food, and clothing are generally
all paid for with cold, hard cash. That’s not to say that
the Japanese don’t own credit cards. They do. They just
don’t swipe cards as frequent as people in other
countries.

The Credit Card Academy, a Japanese website educating

people about credit, estimates the average Japanese to
have at least 3 locally issued credit cards. That’s about
the same number of cards issued to the average
American.

The difference is in the usage though: 54% of credit card

holders in USA use card for purchases, 55% in the UK
but only 18% of the average Japanese pay for purchases
with their credit card. At the moment, Japan is
experiencing a steady decline in credit card use. In fact,
membership is down to 84% in 2015 from 88.1% in
2011, according to a February 2016 JCB survey.

Cash envelope budget management

In Japan, one often recommended budgeting method is

to draw out the cash you need for a week or a month,
depending on how you manage your budget, and
physically divide it into envelopes that are marked by
spending category. Once the cash in an envelope is
gone, it’s gone – no cheating afterwards. It’s a
remarkably effective method – it almost becomes a
game to try to have as much money left over at the end
of the month. And having your money in your hand,
rather than as numbers on a screen or a piece of
printout paper, makes it much more tangible.

Another cash-oriented saving trick (which isn’t that

uniquely Japanese really, but is very popular there) is the
coin saving method. At the end of every day, extra coins
are put into a piggy bank or a jar, and when there’s
enough accumulated, it’s either used for buying
something extra or deposited into a bank account.
Japanese ATMs even have coin deposit slots.

Source: Glimmer Twin Fan

The wife is in charge of the household budget

In a traditional Japanese family, a working father is

either too busy or adverse to the trivialities of home
finance therefore it is the duty of the mother (who may
or may not work outside the home) to manage
everything from cleaning to child rearing, including the
finances. Therefore, hubby generally leaves his earnings
in the hands of his wife, from which she gives him a
monthly or weekly kozukai (小遣い), or “allowance”, for
drinking, eating out, gambling and so on. The wife is
expected to take care of his entertainment budget in
addition to any other financial obligations. She decides
on how the money is spent, how to plan for big ticket
purchases, even in many cases how money is invested.
Financial products are often marketed with ‘cute’ themes,
to appeal to a female audience.

Many magazines aimed at housewives include a

giveaway version as a supplement in their December
issues, for use in the coming year.

Why not an app?

There are plenty of computer programs, excel templates,

and mobile phone apps floating around out there for the
technology savvy housewife. There is one advantage of
writing down amounts by hand though: it will give you a
more tangible sense of how you’re managing your
money.

By Melo | April 4th, 2017 | Save Money | Comments Off

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