A ‘big clean’ of my budget using a Kakeibo
The Pad’ introduced the concept of ‘Osoji’ – the big clean – a while back. In that post, I mentioned 5 areas of my life that were going to get a ‘big clean’. They were: my house, my finances, my health, my paperwork, and my social media. This week I want to give you a look at finances, what I am planning on doing for my deep cleaning of them, and how you can do the same thing. For this, I will be pulling you into my ‘Kakeibo’ obsession!
I will be showing you how it has helped me and explaining why it works. In fact, I am feeling so productive, I have even created a budget printable for you. You’ll find it at the end of this article.
In fact, I have even included a link for you to sign up for a free Investment Account with Freeshare – which includes a FREE SHARE to start off your savings journey!
In fact, in fact, I have created a complete kakeibo book to write a full years worth of budgeting in and it is now available on Amazon.
So enjoy finding out more about budgeting. (Not sure if enjoy is the right word!)
Your household budget
I have always been in charge of the money and bills in our house. At one stage I was the only one with a bank account so it just made sense. As the kids get older I feel it is important to impress upon them the importance of saving and budgeting. This is why I was intrigued while reading Dominique Loreau’s book “L’arte de la Liste” to learn about the system used by many Japanese women to run their households: Kakeibo.
Kakeibo translates to ‘household ledger’ and is, in essence, a comprehensive list of all the money coming in, and all of the outgoings…going out!
The best bit is you do not need flashy apps or any other kind of technical device. All you need is a notebook and a pen.
And I have a lot of notebooks…
Other Money-saving Budget posts you might like:
Question everything!
The ‘psychology’ behind the method is that by physically writing down what you spend you become more aware of it. It can be hard to justify your constant buying of earrings on Romwe when you can see how much you are spending on food or other essentials in comparison.
If you look up the system online you will find a list of questions you need to ask yourself before each purchase. I will admit that for me, my budgeting is not that deep. I am not at a stage where I need to weigh up every penny I spend. But for those who are struggling with overspending, it is certainly something to consider.
I have been experimenting with Kakeibo layouts since starting back in September. If you are a fan of Bullet Journaling or have a ‘lust for lists’ as I do this is perfect for you. There are no hard and fast rules with how you layout your kakeibo, but simplicity is key, so try and keep it as clear as possible.
Here are 4 tips to get you started on your very own kakeibo and your quest for financial cleansing.
1) Make a note of all of your income
The night before payday I set up my notebook. First, I have a list of all my income.
While currently this just includes my wages and child benefit, once my Depop store takes off or I finally finish writing that course, who knows what I will have coming in!
I am also currently dabbling in long term share-based investments, so maybe, one day, I may have some dividends coming in.
It also makes sense to put the dates next to the sums – this is particularly useful if you get 4 weekly benefits, or ad hoc payments. such as money made online through survey sites and such.
Remember to take note of any gifts of cash, or money you make on surveys, or through your side hustle. You may even get lucky and find a tenner in a pocket that you forgot all about. Don’t just blow it on a takeaway!
Include it in your budget!
2) List all your bills and expenses
You can choose how you divide this, but I have 3 distinct areas when it comes to the money going out.
There are BILLS.
These are the ones you have to pay or risk homelessness, being chased or imprisonment!
So here I list any costs for Housing (mortgage or rent, council tax, insurance etc.) Taxes (Council tax, TV licence, car insurance etc.) and Utilities that I pay by direct debit (water, Broadband, etc)
Then there are EXPENSES.
These differ from bills in the sense that these are ‘choices’. If I got into severe financial straits, these are the costs that would be cut. These include my Japanese lessons, Netflix, the X-box live, Spotify, etc.
Then I have POTS – as in separate pots into which I put a specific amount each month.
This works for me as I use online banking and I move money into the accounts I use for food shopping, and savings.
I currently have the following pots: housekeeping, electricity, phone, petrol, car fund, ‘events’, house fund, and Christmas. Maybe you would include a pot for holidays or to save up for a house deposit.
When I am paid I transfer an amount to each of these accounts. Some are to be spent, like the housekeeping one, or the petrol one. Some are to be built up, such as my car fund in which I put back cash towards my MOT.
I leave only enough to cover the direct debits (plus a 10% contingency) in my current account, and then do not use the debit card for the rest of the month. Any cash I need has to come from the appropriate pot, and if it is not in the budget, I don’t buy it.
3) Look after the pennies
One of my early posts, when I was saving to go to Japan, discusses the importance of the phrase “a penny saved is a penny earned”.
It is important in this day and age of online shopping, and the use of ‘card’ to pay for everything that we remember that we are spending real money.
If you make a note of every purchase you make, the cost, and even why, you may begin to question some of your choices. The act of writing down your spending is an intrinsic part of kakeibo; self-reflection is an important skill set to develop.
4) Information is power!
Now you have a handle on what you have coming in and going out, you are in a better position to make changes. You can look for patterns in spending, bad habits, and where savings can be made.
Maybe you can look at moving your utilities, or finding better prices for insurances.
Perhaps you have come across a direct debit for something you don’t need anymore.
Keep in mind, that there is only so much you can cut from your budget. Unless you are happy living in total frugality, that is.
The one thing that you can increase, potentially, is your income. I am currently looking at a few ways of doing this myself, as I have become aware that my retirement provisions are sadly lacking.
Over to you
There are probably many areas in your finances where you can make changes.
Acknowledging your outgoings is a first important step, as well as looking at your long term and emergency savings.
What will your retirement look like? What happens if you are ill and off work for a while?
Try following a budget for a month or two and see what difference it makes.
If you want a helping hand, why not download my template below.
Free downloadable template to get you started on your financial clean-up
And just in case you missed the subtle in-text link.
If you are UK based and looking to start a long term investment maybe a free general investment account is the way forward. It is currently only available as an app, but it is a fee-free option if you want to dabble in the stock exchange, which is certainly offering better average returns than bank accounts.
There is also an ISA option, which costs £3 per month*, which allows you to invest £20,000 per year tax-free.
Just check out this link and you will be rewarded with a free share when you open your account. You will also be given a link to give to friends, and then you will get another free share when they open their account.
(So by using my link you are helping me get a free share at no cost to you, so thank you!)
*Correct at time of publishing – please check all terms and conditions before opening any accounts, and ensure they are suitable for your needs..
Great post! Budgeting is so boring, love the idea of giving it a creative Japanese twist.
And for a bit of extra Japanese style, you can add a few strips of washi tape to your pages!