Get Started with Kakeibo

- What is Kakeibo?
Given that you are watching this video, I am going to guess that you have an idea of what Kakeibo is, but we are going to define it nonetheless.

Kakeibo is a household financial journal. It is a ledger of what you are spending. It helps you stay on top of your financial situation without a formal budget, and it makes you mindful of what you are spending.

In fact, being mindful of what you spend is, in my humble opinion, one of the best parts of using Kakeibo. You'll stop forgetting what you spend, notice how much you are putting into some categories, and if you're like me, you will start to save more.

Kakeibo has been around since 1904, so it is little wonder that in its purest form, Kakeibo is practiced with pen and paper. I did it this way for six months.

But you can also use Kakeibo in the form of a spreadsheet and there are financial apps that support Kakeibo.

The Four Categories

In your financial journal, you will be placing all expenses into one of four categories that can be labeled in a few ways.

- Needs / Essentials / Survival.
- Wants / Leisure.
- Culture / Personal Growth.
Unexpected.

Needs or essentials are things like your mortgage or rent payment. Groceries, but not restaurants. Laundry detergent, shampoo, toilet paper, and the like. One of my favorite labels for this is "Survival" since it sets a high bar. Just pick one label for this category -- again needs, essentials, or survival-- and stick to it.

The wants or leisure label is for date night, your Netflix subscription, expensive wine, or similar. Again, pick the category name that makes the most sense to you.

The third category is often called culture. Originally, these were things like books or tickets to the theater. I like the label personal growth since to my mind it can include things like a gym membership, online class, or similar too.

Finally, there are those unexpected expenses.

The key here is that you need four categories. I call mine.

- Survival,
- Wants,
- Personal Growth,
- Unexpected.

The Four Questions

When you practice Kakeibo, i.e. keep a household financial journal, you are seeking to ask and answer four questions about your personal financial situation.

You will answer two of these questions at the beginning of the month. One question all month long, and one question at the end of the month.

- How much money do I have available?
- How much would I like to save?
- How much am I spending?
- How can I improve?

Видео Get Started with Kakeibo канала You, Money, Happiness