Why Kakeibo (The Japanese Art of Saving Money) May Not Work For You

A beautiful young African American woman sits at the window counter of a coffee shop, enjoying a latte while writing ideas down in a small notepad journal or diary.
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Kakeibo is a Japanese budgeting technique that’s been used for over a century to help people keep track of their finances and manage their money better. It has been lauded as a simple approach that emphasizes mindfulness and awareness of your spending habits.

The system has five very specific pillars where you allocate your money:

  • Survival: Rent or mortgage, groceries, utilities, medical, transportation
  • Optional: Restaurants, shopping
  • Culture: Music, books, subscriptions
  • Extra: Emergencies, gifts, repairs
  • Saving: Your cash-stashing goals

As you plan your budget, you write out what you’re allocating to each of the five pillars, and you update it daily with the money you’ve spent. While the power of journaling has been beneficial for many, it may not necessarily work for you. Here are some reasons.

It’s All Manual

Kakeibo requires you to sit down and hand-write everything. It’s meant as a reflective process to make you more mindful of your spending.

That said, in an age when we’re all glued to our devices, using a paper-based system can feel tedious for some people, as you’re physically recording income and expenses in a ledger or notebook. If journaling your finances isn’t your thing or seems overly time-consuming, you might prefer more automated methods that link directly to your bank account and credit cards and offer real-time tracking and categorization.

There are plenty of digital budgeting and expense-tracking apps and software you can easily access on your phone or computer. It’s also a more convenient way of tracking expenses when you’re out and about.

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It’s Too Simple for Your Needs

Kakeibo is best suited for straightforward financial situations. If you own a business or have multiple streams of income, investments, debts or expenses, you’ll likely need a budgeting system that’s more advanced.

When you have a more complex financial situation, you’ll have a high volume of transactions happening, making manual record-keeping bothersome and prone to errors. Automated financial software is a better strategy for handling these complexities more efficiently.

Kakeibo also doesn’t offer tools for tracking your investments, assessing portfolio performance or making investment decisions. If you have more complex investment portfolios, you’ll require more specialized financial software or advisory services.

It’s Not Ideal for Freelancers

With Kakeibo, you need to sit down on the first of the month and predict how much your income will be, which can be hard for freelancers, who often have income that can vary significantly from month to month, making it difficult to establish fixed budgets.

If you’re a freelancer, you’ll also have expenses that don’t easily fit into fixed categories. You might have variable business-related expenses that are project-specific or fluctuating work-related costs. Kakeibo’s static expense categories don’t accommodate these monthly shifts.

It Won’t Analyze Your Finances

Compared to the array of digital offerings these days, the Kakeibo method doesn’t offer advanced financial analysis that can generate reports and graphs, showing you your expense trends over time. Having this kind of visual representation makes it easier for you to identify spending patterns and areas where you can make adjustments.

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As it’s a simplified technique, it also doesn’t provide tools to help you assess your investment performance, calculate return on investment or manage complex debt strategies. If you have specific financial goals in these areas, other budgeting systems are your best bet.

It’s Not Helpful for Paying Bills or Debt Management

A lot of budgeting software offers bill reminder features, which help ensure you never miss a payment and avoid late fees while maintaining a good credit score.

Kakeibo can be somewhat rigid in its approach. If your primary financial goal is to pay off debt, methods like the debt snowball, debt avalanche or creating a detailed debt repayment plan can be more effective. Some software, for example, can help you develop better strategies by estimating payoff dates and suggesting how to set aside extra funds for the most significant impact.

It Won’t Track Your Progress

If you like the momentum that comes from seeing your day-to-day progress, Kakeibo isn’t for you. Many budgeting apps, on the other hand, allow you to set savings goals, debt reduction targets or investment goals — breaking down your goals into manageable steps and monitoring your journey toward achieving them. Having software that tracks your progress can ultimately help you stay motivated by showing you how close you are to achieving your objectives.

Kakeibo tends to focus on simplicity, frugality and saving — it’s great for incorporating a more mindful method into your budgeting, but not ideal if you struggle with jotting things down or are looking for the perks that come with automating your finances.

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