Are you looking for a way to take control of your finances? Then you may have heard of the Kakebo method. But what is that exactly? And can it help you control your money? Read on to find out!
The Kakebo Method: What is it?
The Kakebo method is a Japanese financial management system. It was created by Hisako Takamizawa in the early 20th century and has been used in Japanese homes for generations. The Kakebo method is based on the principle of saving 10% of your income every month. This money is then broken down into three different categories: savings, investments, and expenses.
Savings can be used for long-term goals like retirement, traveling around the world, or buying real estate. Investments are intended for medium-term goals, such as starting a business or going to school. Finally, there are expenses for short-term needs like groceries or utility bills.
By following the Kakebo method, you can slowly but surely build your savings and reach your financial goals. If you are looking for a way to take control of your finances, the Kakebo method might be for you!
How to rank expenses using the Kakebo method?
The key principle of the Kakebo method is that all income and expenses must be recorded in a notebook, which makes it easier to see spending habits. This information can then be used to create a budget that allocates money for necessary savings and expenses. The Kakebo notebook must have three columns. Spend, invest and save.
Here’s how to use the method in real life:
First determine the monthly financial means and enter the collected amounts in the list above. Then you need to fill in the columns with the three categories. Start with the “Expenses” category and estimate an amount that corresponds to monthly expenses such as internet access, electricity, food, and transportation. Then fill in the “Investment” category if you have a medium-term project, such as The “Savings” category must include 10% of monthly income.
After you’ve filled out your notebook, consider withdrawing the sum of both the “Expense” and “Investment” categories. Set them aside and then surrender your bank card. If you leave your credit card at home, you are obligated to stick to the amount you have estimated for your daily expenses. It should be noted that the use of cash allows to reduce the accounts to be managed and the bank statements to be analyzed. Then you must never forget to use your notebook to write down all expenses. Finally, budget planning should be done on a monthly basis. This gives you a good view of the funds available in your account.
What should you learn from the Kakebo method?
The Kakebo method has proven to be an effective way to save money as it helps individuals become more conscious about their spending habits. In addition, the Kakebo method can also help reduce debt and improve financial security. All in all, it’s a great tool for anyone looking to advance their future and project themselves into new ventures.
Using a simple Kakebo notebook is not enough to properly plan your expenses and save successfully. It requires real willpower and awareness. The method is just a tool. Several rules must therefore be applied for a financial management optimal. It is also necessary to fully understand the usefulness of the notes in your notebook.
It’s totally normal not to follow the rules the first time you use it, but if you show patience and perseverance, you’ll eventually adapt and have access to a nice reward, which are your savings that you deserve so much!
Another advantage of the Kakebo method.
In addition to managing and planning daily expenses, the Kakebo method would be to use this support to plan the financing over a longer period of time. It can therefore be used as a calendar for a whole year. The user could thus find himself with a nice sum dedicated only to his leisure activities while improving several projects that were once on his wish list.
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