Finance
The Japanese journalist from 1904 teaching the world how to save in 2025: welcome to the Kakeibo method
Hani Motoko developed a simple method for budgeting over 100 years ago that has helped its practitioners more effectively save money. Here’s a look.
There are a number of methods out there for budgeting and saving money and nowadays apps to help as well. However, finding one that works for you and following through with it can be challenging.
One that has won over many was developed over 100 years ago by Hani Motoko, that was designed for those who are new to creating budgets. The simple method helps people to be mindful of their spending habits by categorizing their expenditures to keep track of how much they are spending out of the money they have each month in order to examine where they can make savings for the following month.
The Kakeibo method: the Japanese mindful way of budgeting and saving money
Motoko, who was a journalist for a women’s magazine, created the Kakeibo method in 1904 for Japanese homemakers. She wanted to help other women manage their finances in a more orderly way.
Kakeibo, which translates as “household financial ledger,” relies on writing down all of your purchases to reflect on what you are dedicating your money towards. To help simplify the task you should categorize your expenses into four categories: needs, wants, leisure and unexpected costs.
‘Needs’ are your fixed expenditures each month like housing, utilities and food among others. ‘Wants’ are your non-essential or discretionary purchases, think feel-good items, like a new piece of clothing that you don’t really need or eating out. ‘Leisure’ is your spending on experiences or things that improve your quality of life. Finally, ‘unexpected costs’ are one off expenses like car or home repairs or an unforeseen bill.
Firstly, you must write down your monthly income and subtract your fixed costs, or needs. This leaves you with the amount of money that you have to either save or spend on your wants or leisure. Before making an discretionary purchase you should ask yourself a series of questions according to Sarah Harvey, who began using the system after moving to Japan and says it completely changed how she spends money. These include:
- Can I live without this item?
- Based on my financial situation, can I afford it?
- Will I actually use it?
- Do I have the space for it?
- How did I come across it in the first place? (Did I see it in a magazine? Did I come across it after wandering into a gift shop out of boredom?)
- What is my emotional state in general today? (Calm? Stressed? Celebratory? Feeling bad about myself?)
- How do I feel about buying it? (Happy? Excited? Indifferent? And how long will this feeling last?)
Central to the method is writing all of this down in a journal on a regular basis. It could be as you make your expenditures or setting up a specific time each day or during the week, placing them in the category to which they belong.
This is one of the biggest drawbacks to the Kakeibo method, but it helps you process the information in a more detailed way and to be more mindful of how you are spending your money. It also allows you to review your purchase history each month to make improvements including to reduce your fixed expenses and work toward saving more.
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