6 Japanese Saving Secrets to Build Wealth Quickly
Jakarta, CNBC Indonesia - Everyone knows the importance of saving, but not everyone can do it consistently. If you struggle to set aside money, it may be time to try these tips.
Many believe changing poor financial habits is not easy, partly because shopping habits are deeply ingrained in daily routines, and purchasing decisions often involve emotional aspects that are hard to separate.
However, for 116 years, kakeibo has effectively helped people make smarter financial decisions.
What is kakeibo?
Kakeibo is a Japanese financial philosophy. Originally a popular money management method used by Japanese housewives, it was first introduced in 1994 by journalist Makoto Hani. It was popularised again in 2017 through a book by Fumiko Chiba titled Kakeibo: The Japanese Art of Saving Money.
Like all budgeting methods, kakeibo’s goal is to help us understand our relationship with money by tracking all income and expenditure.
However, what sets kakeibo apart is its avoidance of digital tools like apps or Excel spreadsheets. It emphasises writing things down physically as a meditative way to process and observe spending habits.
According to kakeibo, you should ask yourself the following questions before purchasing anything:
Can I live without this item?
Given my current financial situation, can I afford it?
Will I actually use it?
Do I have space for it?
How did I first find this item? (Did I see it on Instagram? Did I find it while wandering in a mall out of boredom?)
How am I feeling today? (Calm? Stressed? Relieved? Feeling bad about myself?)
How do I feel about buying it? (Happy? Excited? Indifferent? And how long will this feeling last?)
Here are six saving steps distilled from the kakeibo philosophy.
- Manual recording of all income
The first step is to manually record all income at the start of each month, whether from regular sources like monthly salaries or additional earnings.
The kakeibo method recommends writing down finances with a pen or pencil in a notebook to fully absorb what you’re recording.
- Save first, then allocate funds to categories
Kakeibo advises setting aside savings first, then allocating the remaining funds to expense categories. The method uses four categories:
Survival: essential needs such as food, bills, loans, and other obligations.
Optional: secondary needs like entertainment, dining out, etc.
Culture: for additional knowledge, such as books, films, magazines, etc.
Extra: other expenses like buying gifts for a friend’s child, condolence money for neighbours, etc.
- Wait 24 hours before purchasing
Japanese people typically take considerable time to consider purchases. Avoid the habit of buying items immediately after seeing them.
Think about it for a full day to determine if it’s a want or a need. If you still want it after 24 hours and your finances allow, then buy it.
- Regularly check account balances
Regularly checking your account balance helps control finances, keeping you focused on how much you can spend.
- Wallet reminder note
One handy trick for saving is to include a reminder note in your wallet that says, ‘Do you REALLY need this item?’
This ensures you always consider your purchase before transacting.
- Pay with cash
Using debit or credit cards often makes people unaware of how much they’re spending. Therefore, try using cash to be more aware of your spending amounts.