How to Become 35% Richer With These Japanese Money Saving Tips
Do you ever find yourself coming to the end of the month and you have found yourself on the breadline….yet again? Do you have things to save up for but, no matter how hard you try, you find your savings barely moving months on end?
Whether saving for your child's future, saving for a house or saving to just have a bit of a safety net, most people can usually do with some help when saving money. I know I can. So when looking for some money saving advice, what better place to look than the Japanese.
Japan has gone from a simple agricultural country, to one of the richest and most technologically advanced countries in the world in no less than 100 years. Now, whilst there are many factors that have contributed to this meteoric rise, one of the reasons that has contributed to their success is the Japanese people’s tendency to be experts in personal finance.
The Kakeibo Method
When looking for good ways to save money, the Japanese look no further than Kakeibo. Kakeibo is a Japanese saving method which is based on the principles of keeping track of your personal finances and holding yourself accountable for how much you spend. Kakeibo translates to “household ledger”. It isn’t trying to just provide a system of money saving advice, it’s more about changing the way you live, holding yourself accountable and creating a system of household financial management.
So if you are really serious about looking for ways to help save money, then look no further than the Kakeibo method.
The Kakeibo method relies on the principle that budgeting in a reasonable manner helps you save money. It keeps your attention on what's important and lets you see more clearly what you can and can't afford.
This is done by keeping note of everything you earn and spend on a monthly basis. This is typically conducted on a notebook as opposed to your phone. It is proven that writing things down helps you remember them as opposed to typing them on your phone, reinforcing Kakeibo as a habit as opposed to a once in while thing.
The Kakeibo Questions to Ask Yourself
Kakeibo is based on 4 main questions:
How much money do you have?
How much money would you like to save?
How much money do you spend?
How can you make things better?
How it Works
When saving up using the Kakeibo method, you need to have two notebooks - a big one and a small one. The big one is kept at home and is used for writing down your income and planned expenses and then to calculate your savings. The small one you take around with you is to make a note every time you spend money.
For the big notebook, what you want to do at the start of each month is write down your expected income, expenditure and expected savings. To do this you want to write down a…
Monthly Income Plan - Record all the money you expect to get as income in that month including things like your salary, advance, tax rebates, even things you expect to sell second hand.
Notes about extra unexpected income throughout the month can be noted in a different colour.
Monthly Savings Plan - Decide how much you want to save each month. Do this step before planning expenses.
Monthly Expenses Plan - Here you want to write down common (recurring) expenses such as rent, utility bills, phone bills, etc.
The money that is left over after deducting common expenses from the sum you want to save should be divided into 4 categories…
Expenses on living: Food, cleaning products, clothes, medicine, gas, travel, etc.
Culture and Education: Courses, training, books, museum visits, etc.
Entertainment: Having fun, meeting with friends, restaurants, movies, short trips, cosmetics, clothes that are not essential, etc.
Others: Everything else that wasn’t mentioned.
Now, it is up to you how to divide the money you have left over between the four categories. As you can imagine, Entertainment will often be somewhat of a blackhole for money so be sure to prioritise expenses on living before blowing your budget on entertainment.
At the end of the month you need to analyse whether you have managed to follow the plan and see what expenses may need to be corrected.
Even if you are not saving for a house, or for a holiday or have a big plan for the savings, the Kakeibo method offers anyone a good way to save money in your everyday life. This is because it makes you more conscious of your spending and makes you more accountable for where your money goes.
Half the joy of big spending on splurges goes away when you are reminded at the end of the month of how much you spent. And this is why the Kakeibo method goes beyond money saving advice but, for those that follow it continuously, it changes habits and how you live your life to make spending less money and in turn saving more money a common practice.
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