Recently a very organized freelancer friend recommended kakeibo, a Japanese budgeting method, for getting my books in order. She told me it was what helped her and her husband save for a house, and that sold it to me; if it could help me save some money regularly, I was in. Regularly logging where my money actually went felt vaguely worrying — what if it revealed I was accidentally spent €400 on books every week? —but I was down to learn more about my spending habits. I used kakeibo for a month — and in the process I discovered a bit more than I was bargaining for.
Kakeibo — which translates to household finance ledger, according to TreeHugger — is a relatively straightforward process. Developed in Japan in 1905, the system appears to be fairly simple. You monitor your incoming and outgoing, and keeping a close eye on where you actually spend your money to highlight where you could cut back in different categories. Each month, you tot up your expected income and direct debits and regular bills to obtain a number of available money, highlight how much of that you'd like to spend, and then log all your spending for all categories for the next four weeks to see where your money actually goes. At the beginning and end of the month, you "think mindfully about how much you would like to save and what you will need to do in order to reach your goal," as the description for Kakeibo: The Japanese Art of Saving Money by Fumiko Chiba, the book I used, notes.
My budgeting situation is complicated. I have bank accounts in three countries — not because I'm an International Woman Of Mystery in a dashing hat, but because I've lived in multiple places and work internationally. I get paid in two currencies, and pay my bills in a third. I'm relatively good at numbers —I do my own taxes, and manage to get the right numbers every year —but I leapt at the chance to simplify some part of the Byzantine labyrinth that is my finances.
I learned multiple things from this process. One was that I spend far less than I thought I did. It turns out I prioritize food and drink; I work from cafes rather than in an office, and like to drink nice green tea to keep myself sane. I'd feared that this would add up to extravagant sums, but it actually doesn't.
I also found that I didn't know where some of my money was going, and that was frustrating. My husband and I recently moved to Ireland, and he was able to get a bank account first — which means that his account carries all the direct debits for things like utilities and gas bills. I send him over a sum every month for rent and bills, but I don't have an easy way to see how much the latter costs every month. It's a gap in my knowledge I am going to repair.
Another element I discovered was less about my own spending than about the system itself. Freelancing isn't necessarily built for kakeibo — at least my type of freelancing, where I have at minimum three employers at any one time, multiple projects on the go, and can't really plan how much I'm going to earn at the beginning of each month because, well, I don't know yet. People on steady paychecks will likely find kakeibo extremely helpful, but for prediction purposes, it's not a great system for those with irregular incomes. In the beginning of February alone, I received two fresh commissions, was paid less for one thing and more for another, and generally had my income predictions thrown off by several hundred euro.
To back up the kakeibo sums, I started keeping a budget spreadsheet online where I simply logged everything I was spending and earning, and the places where I'd spent it. This was greatly helped by the fact that I use a Revolut — a bank card for exchanging money between currencies for the best rate — for my everyday expenses. When you earn money from multiple currencies, it's sensible to use an account that can put that money in one place without bank transaction fees. Revolut's app shows transactions instantly, so I could track where my money was going immediately. I found I lost track of things if I used cash, so I moved away from that option where I could.
The kakeibo book I have also didn't necessarily have enough space for the various things that I do spend my money on. After an abortive attempt to make 'tea and lunch' a single category in the book, as it is on my budget spreadsheet, I discovered that the single square for one day wasn't really big enough for the multiple expenses in that one category. It also put everything in pounds, and when you earn in multiple currencies that's not really a helpful system; I have to do a lot of juggling of expected income based on shifting exchange rates, and make space for that on my spreadsheet.
Overall, the lessons of the kakeibo book have been positive. I have more control over my money and a sense of my own fiscal habits, feel better about where I choose to put my income, and know I'm comfortable enough to save a good amount every month without sacrificing my nice green tea. Because of my complicated banking and working situation, the Google spreadsheet has turned out to be a better day-to-day solution for tracking the many different variables of my life in money. However, if you don't feel like you know where your money's really going or feel scared or embarrassed to think about your fiscal habits, kakeibo is a great, easy way to feel on top of your finances.
