This is less of a budgeting method and more of a money philosophy. Full disclosure, it’s my number one favorite way to look at money.
Kakeibo is a Japanese style of budgeting that focuses on being mindful of your spending, evaluating what you really need, and the reasons why you buy the things that you do.
It emphasizes mindfulness and always having an intention with your purchases.
How it works:
There are three main components to kakeibo:
- Write down everything you buy: No, excel doesn’t count. You need to physically put pen to paper to get the most out of this method. When we write things down on paper, we’re a lot more mindful of what we’re doing, as opposed to just typing it in to a computer.
- Organize everything you buy according:
- Needs — things you can’t live without like food and toiletries
- Wants —things you don’t need such as dining out or a new jacket
- Culture —things such as going to the movies or a museum
- Unexpected —things you didn’t anticipate such as a a parking ticket or replacing a broken lamp
- Ask yourself 4 questions while you budget: Reflecting on your spending regularly is what makes kakeibo so powerful. The four questions are:
- How much money do I have available?
- How much would I like to save?
- How much am I spending?
- How can I improve?
Kakeibo puts you in touch with your money in a really unique way. This method doesn’t try to control your spending as much as it aims to make you more aware of it.
By being more mindful of your spending habits, you’ll naturally start to spend less on the things you don’t need.
May 25, 2020 at 03:54PM
