Sarah Harvey is the author of the book “Kaizen: The Japanese Secret to Lasting Change”. She knew a Japanese method of accumulating wealth. Here are the takeaways from this approach.
In 2017, I decided to quit my job at a publishing house in London and move to Japan. I’m not doing this because I’m bored with my job or have an unsatisfactory social life. It’s just, I’ve always wanted to try new and different things.
After living in Japan for 6 months, I started to feel fascinated about the way the Japanese pay much attention to the little details, attention and incremental changes in daily life.
It’s different from anything I’ve ever had the opportunity to experience, and at the same time, encouraged me to slow down and improve some habits in my lifestyle, especially in terms of unreasonable spending. So, when I heard about the Kakeibo method, I was intrigued and decided to give it a try.
Kakeibo: The Japanese way of saving money
Kakeibo (kah-keh-boh) translates to “family financial ledger”, invented in 1904 by Hani Motoko – Japan’s first female journalist. This is really a simple method to help you effectively manage your finances.
Illustration.Photo: iStock
I see some people who know how to calculate quite well, never overspend and can live a satisfying life with essentials. But I do not belong to this group of people.
Instead, I have a habit of going shopping whenever I feel bored, stressed, or unhappy about something. Sometimes I feel happy or have something to celebrate, I also go shopping, but always follow trends that exceed my economic potential.
However, not only me but many people also agree that bad spending habits are not easy to change. Because it has become ingrained and become a part of our daily lives. Besides, shopping also contains an emotional aspect that is difficult to separate.
Fortunately, the Kakeibo method over the past 116 years has worked its way up to helping many people make smarter financial decisions.
No technology present, just a pen and a notebook
Like all budgeting systems, Kakeibo aims to help you understand your relationship with money, by recording all your receipts and expenses in one big book.
However, what makes Kakeibo special is that this method does not have the appearance of any software, app or Excel spreadsheet to help manage the budget. Instead, it emphasizes the importance of writing things down by hand as a way to reflect on your spending habits and monitor your spending habits.
With just a notebook and a pen, you can control your spending according to the Japanese Kakeibo method.
This Kakeibo method has worked well in helping me gain more control over my finances. But what it really does is force me to think about the things I’ve bought, and what drives me to buy them. This is something that no other system or method I have tried can do.
In other words, I finally overcame my fear of having to draw the line between “needs” and “wants”. And as a result, I make faster, smarter, and more logical decisions about whether to spend money on an item.
However, you need to remember that Kakeibo is not designed to completely eliminate all pleasures from your life. For example, if you are feeling sad about something, flowers are an inexpensive solution to make you happy again.
Overall, rather than requiring you to do big things, this method aims to change your bad habits through increased attention and changes.
Illustration. Photo: Imoney
How to spend more scientifically?
In addition to committing to always asking yourself the above questions before “hands down” to buy any items, you can implement some of the following strategies to spend more rationally and scientifically:
1. Leave the item on for 24 hours
This will let you know clearly whether you want or need the item. If you still think about the product the next day and can afford it, buy it. For sure, you will have a greater sense of satisfaction with your decision.
2. Don’t let the “big discounts” attract you
I used to get caught up in big store sales, but that also meant I was always spending money on things I knew I wouldn’t use.
So, for each item in your cart during the sale, ask yourself if you would buy the item when it wasn’t on sale.
3. Regularly check your bank account balance
Checking your account balance feels like you’re in greater control of your personal finances, as it keeps you focused on how much money you have to spend.
4. Spend cash
Using cash instead of swiping will make you more aware of what you’re spending money on, so you’ll find it easier to manage your budget. You can try by taking out a certain amount of cash to use for a week, and spending within that range.
5. Put reminder notes in your wallet
My friend had a very creative idea to stick a note on her credit card. It was written straight on, “Do you REALLY need this?”. Anything that prompts you to pause before making a purchase will help you make smarter decisions.
6. Change the environments that make you spend money
If you find that you often spend a lot of money after opening a marketing email or seeing a photo of an Instagram celebrity wearing a certain fashion brand, then unfollow.
Or if you buy clothes and makeup in your spare time, try to use that time to do something else, like a walk in the park.
In a nutshell, Kakeibo is a way to tap into your attention to help you cut your spending – which may only give you a temporary boost in happiness. However, the intentional actions of spending and saving actually have a big connection.
The small changes I made while using Kakeibo had a cumulative impact on my bank account. My savings are growing faster than I thought, and more importantly, I’m making smarter decisions about how to invest that money for the things that really matter.
Source: CafeF
Source: Vietnam Insider