Finance A century before apps and spreadsheets, there was a Japanese budgeting system that still works today

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A budget can help you manage your finances — but it's hard to maintain. Kakeibo is a system that involves a pen-and-paper journal to keep track of your money.

All you need is a pen and paper. play

All you need is a pen and paper.

(Sebastiaan ter Burg/Flickr)
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  • A budget can help you manage your finances and increase your savings. But it's not always easy to maintain.
  • "Kakeibo: The Japanese Art of Saving Money" is a new Japanese budgeting journal created by Fumiko Chiba, though the concept dates back over a century.
  • By eliminating digital technology and recording your goals and daily spending by hand, you'll be better positioned to make solid financial decisions.

Kakeibo is the Japanese word for a budgeting journal. (You pronounce the word "kah-keh-boh.")

The idea is to keep track of how much you're earning and how much you're spending; the ultimate goal is to save more.

If that sounds ridiculously simple, it is! No apps, no digital technology, no fancy mathematical calculations. But that's the point — by eliminating all the bells and whistles and getting up close and personal with your daily money habits, you'll be better positioned to make solid financial decisions.

So says Fumiko Chiba, author of "Kakeibo: The Japanese Art of Saving Money." The book is actually a year-long journal with a few pages of explanation around how and why to use it. (The book is currently available in the United Kingdom and will be published in the United States fall 2018.)

Chiba writes that the kakeibo dates back to 1904, when it was popularized by Japan's first female journalist, Hani Motoko, as a way for housewives to manage budgets. Chiba writes: "Although Japan is a traditional culture in many ways, the kakeibo was a liberating tool for women, giving them control over all financial decisions."

According to Chiba, the kakeibo — which comes in different forms — is still popular across Japan. (Indeed, if you search the Japanese word for kakeibo on Amazon, dozens of different style paper journals turn up.)

When you use the kakeibo, Chiba says, you'll learn that "saving money is about spending money well." Instead of emphasizing all the things you can't spend money on, shift the focus to all the things you really value that you can spend money on.

The system is partly about tracking and partly about reflection

The "kakeibo cycle" depends on four questions:

  1. How much money do you have available?
  2. How much would you like to save?
  3. How much are you spending?
  4. How can you improve?

Ultimately, it's not so different from any other budgeting method out there. Whether you're tracking your spending automatically with an app like Mint, inputting numbers on a spreadsheet, or writing in a notebook, it always boils down to spending less than you've got coming in.

Yet the fourth question in the kakeibo cycle, "How can you improve?" turns out to be key. At the end of each month, you'll answer a series of reflection questions:

  1. Did you hit your savings target this month?
  2. What ways did you find to save money?
  3. What areas did you spend too much on?
  4. What will you change next month?

It's hard to say whether writing things down by hand is more helpful than using a digital tool.

Chiba mentions that the kakeibo will help you "think mindfully" about your savings goals and plan. And research does suggest that we remember information better when we write by hand as opposed to typing, likely because we're forced to engage more with the text.

But the best budgeting system, as The New York Times recently pointed out, is one the you'll stick with — and that can vary from person to person. There's certainly no harm in using a kakeibo for a trial period; you might find you love it.

That said, if you keep forgetting to record your spending and hate the thought of lugging around a notebook everywhere you go, then a digital tool might just be more your speed.