Kakeibo Is the Japanese Money-Saving Method All Couples Should Try

Translated to "financial household ledger," the Kakeibo approach is a simple and straightforward way to KonMari your spending.

by Adam Bulger

In 2015, California decluttering and anti-burnout coach Jessica Louie was a Marie Kondo super fan. The anti-clutter guru’s KonMari method of serenity through tidying had changed her life. Kondo’s influence was so profound that Louie completed a KonMari consultant certification course to share Kondo’s wisdom with her fellow pharmacists and other people overwhelmed by the stresses of modern life.

But there was a problem. When Louie examined her finances through Kondo’s lens, her mountain of graduate school-incurred debt failed to spark joy. Inspired by the life-changing simplicity of the KonMari method, Louie wondered if Japanese culture might offer similar wisdom for saving money. That’s how she discovered the financial approach of Kakeibo. With it, the debt steadily eroded.

“We paid off almost $300,000 of debt from our graduate programs,” Louie says. After her personal success with Kakeibo, she incorporated it into her anti-burnout coaching practice. “I went debt free on it and have used it ever since with my clients.”

Like the KonMari method, the 116-year-old Japanese financial approach of Kakeibo connects common domestic tasks (tidying for KonMari; budgeting for Kakeibo) with profound changes to mood and emotion. Pronounced “Kah-keh-boh” and translated to “household financial ledger,” Kakeibo (sometimes written as Kakebo) is a simple approach to household finances that teaches people to be more intentional about their spending. It doesn’t require an app or spreadsheet; in fact, it must be done by hand. Kakeibo’s creator, trailblazing Japanese female journalist Motoko Hani, believed people need financial stability to achieve happiness. So, she created a clever — and incredibly simple — mix of budgeting and journaling that fosters emotional awareness about money and instills the value of delayed gratification.

Kakeibo is a ledger system designed to track spending and make users aware of how they’re using money. The Kakeibo financial approach asks four simple questions:

  1. How much money is available?
  2. How much do you want to save?
  3. How much are you spending?
  4. How can you improve?

In his 2018 book Kakeibo: The Japanese Art of Saving Money, author Fumiko Chiba illustrates the four questions like parts of a propeller. In practice, each of the simple questions flows into each other. You have money coming in, a goal for how much you’d like to save, and money going out. Once you improve what’s going out, more money is available and you can save more. But since there will inevitably be setbacks or things you overlook in a cycle, you stay mindful of spending and continue to look for ways to improve.

Kakeibo is about mindfulness. It asks its users to be conscious of what they’re spending money on. At the start of each month, you write down fixed income and expenses (rent, food, and so forth). Weekly, you record purchases and divide them into four pillars, or categories: survival, culture, optional, and extra (or unexpected). Sorting purchases into pillars gives a clear understanding of where your money is going and whether your use of money is advancing your savings goal. And it sets the stage for the reflection of asking how you can improve your spending habits to service that goal better. With your purchases recorded and categorized, you can see that splurging on Seamless five times a week set you back and improve by cooking more meals at home.

“You’re definitely going to have some missteps,” Louie says. “Everyone has that. I had that as well. And then we write it down. You just reflect on it and ask, ‘why did I do that? What was the feeling I had at that time?’

No one attains perfect financial discipline overnight. Louie says Kakeibo’s call for regular reflection and self-improvement facilitates the learning process.

“Sometimes my clients have to buy something in order to learn why they have that habit in their life,” she says. “Are they using it to cope or just have that burst of dopamine when they purchased it? Sometimes, when they get the item, they never even open the box.”

The physical act of writing on paper is key to Kakeibo. This makes sense: studies have shown that writing leads to deeper understanding of information because it forces us to slow down and process what we’re learning instead of recording it without thought. Without this intentionality, the Kakeibo doesn’t work.

Kakeibo’s a simple system. But its simplicity can lead to profound changes in spending habits. Tracking spending with the Kakeibo template makes you accountable for everything you purchase. Considering whether something is optional or needed for survival can be a persuasive reason for sticking to a shopping list instead of, say, hopping on Amazon to buy a few essentials and ending up with $200 worth of items in your cart. The resulting purchases often sport a Marie Kondo-friendly inclination towards quality over quantity.

“The more money you save with Kakeibo, the higher quality of item you will invest in,” Louie says. “So it’s quality over quantity, which is very similar to Marie Kondo. If you are looking at what sparks joy in your life, you’re investing in quality items that will last for years to come.”

Of course, the Kakeibo method takes time to set. “When I work with a lot of my clients, the first few weeks we work together, usually their Kakeibo tracking sheet is full and there’s probably about 20, 25 lines,” Louie says. “As we continue working together, it gets down to maybe three or four lines.”

With its spending categories and weekly calls for self-assessment, Kakeibo encourages people to be mindful of how they’re using money. Financial therapist and Financial Wellness Advocate for Prudential Amanda Clayman says that regular reflection on money could be a valuable change for many Americans.

“We have a bias toward busy-ness in American culture where we are affirmed and praised for like the busier and crazier we are,” she says. “And because of that, activities of reflection do not feel productive.”

Many spend casually and without consideration out of convenience. Knowing we’ve frittered away on food we’ve forgotten we’ve eaten alone can often be enough to change lazy habits.

“A lot of people have a practice of tracking their spending,” Clayman says. “And while that’s really lovely for bringing more consciousness to the moment, unless they also have a complementary practice of reviewing and then thinking about how they want to use that information moving forward, then they’re really only sort of doing half of the exercise.”

Reflecting on spending shows how quickly the joys of mindless consumption disappear and leave us short on cash and surrounded by clutter.

“A lot of times, in the moment we just want momentary gratification around a purchase but we don’t actually want to have the thing that we’re buying,” Clayman says.

Clayman noted that Kakeibo is rooted in culture. The Japanese rely on cash far more than Americans and the method’s spending plans are geared far more towards the simple subtraction and addition involved with the exchange of physical rather than the complex variables of credit cards and banking fees.

Having a clear and intentional understanding of financial goals can grant those goals more perceived value, which strengthens commitment to delayed gratification. Americans generally prefer their gratification to be instant, which leads to out-of-control spending, regret and, in nearly all cases, fails to spark joy.