Manage your money smartly with Kakeibo by categorizing expenses and setting weekly limits for better savings.
Mastering budgeting and saving consistently is challenging, but the Kakeibo method, a Japanese budgeting technique, can help.
Kakeibo, meaning ‘household financial ledger,’ was created by Hani Motoko in 1904. It encourages mindful spending and helps you achieve your savings goals.
To use Kakeibo, categorize your expenses into
1. Needs
2. Wants
3. Culture
4, Unexpected Expenses.
Maintain two notebooks: one for these categories and another for daily expenses. At the end of each week, compare your planned versus actual spending to identify areas for improvement. Additional tips include delaying non-essential purchases, using a shopping list, and paying with cash.
Method:
1. Monthly Income: ₹50,000
2. Fixed Expenses (e.g., rent, utilities): ₹20,000
3. Savings Goal: ₹10,000
4. Amount Available for Spending: ₹50,000 – ₹20,000 – ₹10,000 = ₹20,000
5. Weekly Spending Allowance: ₹20,000 ÷ 4 weeks = ₹5,000 per week
Stick to this weekly limit to stay on budget and boost your savings.