How ‘Kakeibo’: The Japanese Art of Saving Money Changed the Way I Spend

what is Kakeibo?

Kakeibo was first popularised by Hani Motoko, Japan’s first female journalist, in 1904. Thankfully, Kakeibo: The Japanese Art Of Saving Money was subsequently published in the English language to be more easily accessible to the rest of the world.

Picture and synopsis credit: https://www.amazon.com/Kakeibo-Japanese-Art-Saving-Money/dp/0525538038

People in Japan are masters of minimal living, able to make do with less in all aspects of life, whether it’s de-cluttering personal belongings or savvy seasonal cooking. At the heart of all this is the kakeibo: the budgeting journal used to set savings goals and track spending. The premise is simple: at the beginning of each month, the prompts in this book help you to plan how much you would like to save and what you need to do in order to reach your goal. The kakeibo then gives you space to jot down your weekly spending and reflect on the month just gone. The act of completing your journal ensures that saving is a part of your everyday life, while also giving you the opportunity to reflect and improve every month.

Admittedly, I am not so zen as to sit down every day to write a bullet journal for finance. However, what it taught me was in line with one value I have when it comes to spending: mindfulness.

Here are the questions that I ask myself before buying something. Because I always internally process the same set of criteria before buying something, it has become second nature to me.

Questions to Ask Yourself Before Anything

1. Is it essential?

It is inevitable that what is deemed essential can be different things to different people. My personal definition of what is essential is family groceries, utilities, transportation and housing. Basically, what counts as basic needs on Maslow’s hierachy of needs. However, I can also understand that someone might feel strongly about buying the latest iPhone.

Even within a category like food, I consider nutrition vs empty calories. For me, eggs are more essential than chips and crackers. But again, to each their own.

Of course, we also have the freedom to buy non-essentials. Which brings me to the next few questions to ask yourself when purchasing non-essentials:

2. Will I still want to buy this item after 24 hours?

This question for me is effective when it comes to purchases on the whim, especially clothing. There are times when I came across something nice on Zara, and I almost always will not buy it on the spot. Because usually the next day when I wake up and think about it further, I am not as excited about it anymore.

In essence, I do not buy things on the whim.

3. How often will I use it?

Again for clothing, I always think about cost per wear. If it’s a very pretty floral blouse that’s super on-trend, it’s likely that I will not wear it at all, even though I think it’s really pretty. Same goes for pretty bags that can hardly store anything. Likewise when it comes to other purchases like shoes, I think about how often I can use it. This is also the reason why I gravitate towards comfortable shoes, as opposed to fashionable ones. For the same reason, I would also not hesitate to buy a pair of shoes with a higher price tag, as long as I am certain that the cost per wear would be lower in the long run.

4. Why exactly am I buying this?

Do I really need this? Or I am just stress buying? In essence, understand your motivations for buying something. This is especially so if you are at a huge sale, and you just feel the intense need to buy something because it’s a bargain. However, if you won’t wear it now, it is likely that you won’t wear it later.

My peers and colleagues have frequently told me that they love the thrill of buying something at a brick and mortar store, or carting out something online. This is also known as the buyer’s high – the euphoric rush of excitement when they buy. Buying could also be a way to quell negative emotions temporarily.

5. How will I feel One Day/Week/Month after buying this?

There are things that you buy that will give you utility and fulfilment for years to come. And then there are the things that are bought and unused, sitting there collecting dust.

The buyer’s high is extremely fleeting. Be mindful to spot that, so that you are able to reign in those emotions to keep your spending in check.

6. How will the price change in the next few months or a year?

This is especially applicable to electronics and gadgets. If you’ve been to enough PC shows, or track prices of electronics, you would know that thanks to Moore’s Law, which says the number of transistors you can fit on a chip will double every 18 months, prices of electronics fall quite rapidly as newer models come on to the market.

I personally don’t care about getting the latest and shiniest phone (foldable or not). If it performs basic functions without dying on me within 2 years, I usually am willing to wait a few months to get it at a lower price. My current phone is the Oppo Reno Z, which I bought for S$337 on Shopee in November 2019, after my old phone went kaput on me like it had a heart attack (and that phone was a high-end phone that I got for free). Sometimes, if you are not urgently in need of a new replacement phone, it sometimes could make sense to wait it out for big sales events, where online platforms provide significant discounts in order to boost their topline revenues albeit a lower margin.

TL:DR

Acccumulating savings takes commitment and mindfulness. Mindful spending does NOT mean that you deprive yourself. Instead, it means focusing on the things that gives you utility beyond that fleeting dose of gratification.