How the ‘Kakeibo’ savings method could help you to save thousands – act now

SAVING money can be complicated, particularly when it feels as if expenses are always rising each month. However, there is a particular technique Britons may be able to apply to their lives which could accelerate them towards their goals, helping them to save hundreds, or even thousands, in the long run. Here is how to achieve it.

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Money saving hacks will be relished by many as a way of helping them on their way to achieving financial success. But it can be difficult to know where to begin and how to kickstart one’s savings journey in the first place. While many people have been glued to their TVs this summer watching Team GB secure a myriad of medals in Japan, there is also something else which can be learned from this nation, mainly a popular savings technique which is commonly known as Kakeibo. The Kakeibo method of saving first originated in Japan, and literally translates to “household finance ledger”. It sees Japanese people use a daily savings journal to map out how much one is set to spend and save each month. Progress is then tracked against a set of goals.

Kakeibo was originally designed as an accounting system to help people keep track of their household spending in the 1900s, but the basis of its methods is still used throughout Japan today. It’s a simple concept, but it represents a level of diligence and awareness of good savings habits we could all easily adopt.

In order to find out more about this savings method and see how individuals could apply it to their everyday lives, spoke exclusively to Al Ward, Head of Customer Savings at abrdn. He broke down the process into four key steps which Britons can take on their savings journey. 

Mr Ward said: “At the start of each month, make a list of your income and any fixed expenses like mortgage, rent, phone bills as well as any debt you might be paying back.”

Individuals are encouraged to take expenses away from their income, in order to accurately establish how much they have left for spending in the month. They may also choose to put a certain amount of money aside in order to build up their savings pot – primarily for emergencies.

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Money saving hacks: How the ‘Kakeibo’ savings method could help you save thousands (Image: Getty)

How much a person wishes to spend and save is a completely individualistic process, and is likely to be influenced by the kind of lifestyle a person leads, or hopes to lead, of course. But it may involve adjustments and tweaks in order to keep on track on a regular basis.

Some individuals may wish to budget more money for their spending each month, particularly if they have high-ticket items to buy, or significant bills to cover. However, others may want to put more money away for a rainy day or in order to achieve specific future goals later down the line.

Another key factor of the Kakeibo savings technique is setting savings goals. This, Mr Ward stated, is something which individuals should take their time over. This will help them to set realistically achievable goals each month to progress towards their ultimate financial outcome.

These, once again, are likely to differ from person to person and thus a tailored approach should be adopted on the matter. Variations will occur depending on a person’s lifestyle, their spending habits, plus what their ultimate savings goals might actually be.


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Once a person has decided on the goals they would like to set, they can then put aside a specific amount towards achieving that goal from the money which they have left over and available after the expenses for that particular month.

Savings goals can be big or small, but for those who feel they have a mountain to climb, Mr Ward advised breaking this goal down into smaller monthly chunks. This, he said, can make the goal feel a lot more achievable. Saving little and often can quickly add up to a meaningful sum in this way, and is better than not saving at all.

A third point to consider on the Kakeibo savings journey is to keep track of one’s finances, with Mr Ward saying: “If you’re doing it the Kakeibo way jot down each purchase you make at the end of the day into your ledger to keep track of your spending. 

“Writing it down is an important part of how the method works. The idea is it helps you to be present and slow down, tying into the mindfulness element of the technique, making you really think about what you’re spending.

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Money saving hacks: There are a number of ways to save (Image: EXPRESS)

“When you write down your purchases, put each of them under a corresponding category. For Kakeibo, there are four different groups that your finances and spending are allocated to: needs (e.g. food), wants (e.g. a takeaway or new clothes), unexpected expenses (e.g. a car repair) and cultural purchases (e.g. trip to the theatre or a new book).

“The idea behind the different categories is that it ensures users of the technique are assigning money, that is left after necessary expenses, for things that align to their goals. It also simplifies your finances by putting them into four clear groups, making it easier to recognise where you spend the most money.”

Finally, when it comes to the Kakeibo savings method, if Britons are hopeful to secure success, they will need to take action by calculating the money they have spent and saved once they reach the end of each month, preferably according to the aforementioned categories.

They will then need to add together to deduct the amount of their total budget which was first established in Kakeibo step number one. This draws the entire savings journey together into one cohesive plan to push Britons towards their financial goals.

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The figure individuals are left with is the amount they have managed to save in total for the month. This should then be compared to the savings goal a person originally set out. By doing so, the technique requires individuals to reflect on their performance, and whether they might be able to improve going forward into the next month.

Mr Ward concluded: “Make a list of what went well one month and what could be improved on for the next month. As with everything, budgeting takes practise, so don’t worry if you don’t smash all your goals the first time. Instead, keep refining and honing your attitude to spending and saving and eventually you will continuously reach your goals.

“You might notice that this method follows a similar pattern to a lot of the savings apps we see today. For example, abrdn’s Choices app takes a lot of inspiration from the Kakeibo technique – offering people a way to budget, while setting a savings goals, keep track of what they are spending, and then most importantly, save for the future by helping you break down necessary savings and investments to help you reach your goals.”

Roy Walsh

Roy Walsh

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