If you feel that money is constantly not enough, maybe you just do not have competent cost optimization. One of these optimization systems was invented in Japan. You fell in love with the Japanese for simplicity and efficiency, and their experience has been accepted with pleasure all over the world for many years.
We at Happy Worthy Life decided to learn in detail about a tool that will help you easily put things in order, understand where the funds are leaking and how to fix it, save more and invest more.
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What is Kakeibo?
Ka-ke-bo is 3 characters, together they mean “book of home economics”. The system was invented more than 100 years ago by the editor and owner of the magazine “Friend of Women” Matoko Hani. It aims to increase savings through small but regular steps.
The bottom line is to maintain simple visual tables that help you see how you distribute funds, whether there are financial holes in the budget where the money goes unnoticed. Keeping a budget in this way is very disciplined, eliminates bad habits and helps to quickly achieve the goals that you set for yourself.
Step # 1: Key Principles
First of all, you need to get 2 notebooks.
1. Large – for planning income, expenses, savings.
2. The small one that you always carry with you to record your daily expenses.
In large write:
- Revenues: salary, additional funds, gifts, repayment of debt, etc. Make entries on a specific day, and supplement unexpected income during the month, for example, with a pen of a different color.
- The costs are compulsory and well-known in advance: rent, mortgage, mobile communications, training, major purchases.
- Savings: the amount you plan to defer in the current month. The recommended amount is at least 10% of the total income.
- “For Life”: the amount that remains after deducting basic expenses and savings.
This can be a table for a month or separate pages in a notebook for each category.
You can use the application for a smartphone , but manual recordings are considered more visual and convenient.
Step No. 2: 4 categories of expenses “for life”
It is proposed to write down daily expenses into a small notebook, which should be divided into 4 categories:
- life (food, clothing, household trifles, expenses for children);
- culture (visiting museums, exhibitions, self-education, books, trainings);
- leisure and entertainment (restaurants, clubs, tickets, trips, meetings with friends);
- force majeure (usually unforeseen expenses, such as treatment, repair).
Divide this money into 4 parts, based on sample plans. Write down the amounts. Then, every day or once a week, record all expenses, dividing them into categories. It is convenient to do this by collecting checks.
Step number 3: How to save money in addition to the planned savings
Using the system or its individual principles, you can develop new habits and save money, even if it seems that there is nothing to save.
Take to the piggy bank:
- Change upon purchase from a round sum. For example, you spent 80 dollars in a store. Set aside 20 dollars in a piggy bank, as if you spent 100.
- If you use a card more often than cash, another rounding principle can be used there. For example, on the map 40 120 dollars. Transfer 120 dollars to the savings account.
- Exchange a large amount. For example, you exchanged 1,000 dollars. Set aside 100 of them.
- Returned debt of 100%. If you borrowed money and could do without it, then you can defer all of them.
- Put all the little things in your pocket at the end of the day. Even a small daily amount can grow in a month to an acceptable amount that can be invested.
- Divide the money you intend to spend by 4 weeks. All that remains of the 7-day budget, transfer to the savings at the end of the week.
- Come up with fines for yourself. Instead of being upset about breaking your rules, such as skipping a workout, quarreling, not fulfilling plans, just pay yourself in a piggy bank. And then send this money to investment.
- Postpone non-urgent purchases for a month. If after 30 days you still want to buy this thing, then you really need it. If not, set aside the entire amount that was intended to be purchased, or part of it.
How the system helps
Kakeibo is not limited to recordings alone. Its main advantages are in visualization, but the most important thing is your analysis. According to the results of the first month, you can draw conclusions:
- whether your plan for the past month on expenses and savings has been completed;
- where did you spend money and in what volumes. You will see which area takes the most finance, how to adjust it. Or maybe you, on the contrary, allow yourself too little and the share of expenses can be increased;
- perhaps you spent less than planned – and the released amount can be spent on savings.
Do you like such a system? Try to apply?
Preview photo Depositphotos