If you're tired of seeing a three-figure balance in your bank at the end of every month, this article is for you.
We totally understand how difficult it can be to save money. You try to scrimp and save every week and yet end up with a three-figure balance at the end of each month. If you’re living in a city like Mumbai, where rents are high, you’re probably down 40 per cent of your salary right there. Add to that the late-night Zomato orders, the Ubers for when you’re running late to work (which is probably thrice a week) and before long you’re hoping your parents bail you out… once again.
For starters, know that you aren’t alone. There are thousands such as yourself that stare into their bank accounts with dismay. And here’s the bit that may probably be news to you: the struggle was real even in the early 1900s! Which is what prompted Hani Motoko, Japan’s first female journalist to invent a system called kakeibo or a budgeting journal. She wrote it to help busy women manage their finances. And she wrote it in 1904. More than a century later, her philosophies have been translated into the English language by Fumiko Chiba in the book Kakeibo: The Japanese Art of Saving Money.
The concept involves is sitting down with your kakeibo, planning on what you’re going. To spend, save and what you need to do to reach the goals you’ve set for yourself. Following are the basic takeaways from kakeibo.
1. Focus on your spending and not saving.
You read that right. The philosophy says that in order to save well you need to spend well and vice versa. Since we work hard to make the money, surely, we should be able enjoy life. And that’s the thing you need to remember when you’re saving. Which is to say when you look at saving as something you have to do, it becomes a chore. But if you see it as something that will help you spend on the things you want to spend on, then there is an incentive to save.
2. Write things down
When you keep a kakeibo, what you’re basically doing is recording how much you spend. According to Fumiko Chiba, it would help if you keep technology out of this process. Instead of punching in the numbers on a phone app, you should write it down with a pen, in physical journal. By doing so, you are giving yourself the time and space to look at your spending in detail, she says. After you’ve jotted down every single penny you make at the beginning of every month, you take out the fixed expenses such as rent/mortgage, bills etc and take it away from the total amount. This is the amount that you can choose to “spend well” or “save”
3. Be brutally honest about your wants and needs
Once you know how much money you have to spare after you’ve taken away the fixed expenses, you must now face the daunting task of jotting down exactly how you’re planning to spend the rest. It could be that 20-rupee vada pav or a 10-rupee chai, jot all of it down. The moment you do, you’ll realise what your wants and needs really are. Sure we need to eat but do you really need to order in when you can cook at home? Before long, you will realise the difference between the things you absolutely must have and the ones you just want to have. The moment you honestly acknowledge that, you can start by identifying the areas where you can begin cutting back.
4. Avoid swiping the card
Those of us who’ve seen a time when you had to stand in queue to, first, deposit your paycheque and then, again, to withdraw the money for month’s expenses, will likely agree that we were able to control our expenses a lot better back then because we saw what we were spending. It wasn’t just a text message with some figures at the end of a meal, it was hard cash. That made it very, very real. And that’s the other thing that Chiba suggests – withdraw cash at the beginning of every month and divide them up in labelled envelopes. According to her, the act of placing cash in the envelopes makes her less likely to spend it on things like drinks with friends etc. “Small acts can make a big difference in your saving goals. Acting with patience and consistency is what the kakeibo encourages,” she explains in an interview.
5. Reflect on your progress at the end of every month
Yet again, sit down with your kakeibo and go through your expenses with a fine-tooth comb, Chiba says urging that it is as important to celebrate the successes as it is to acknowledge the weaknesses. Of course, when you begin, the figures may not seem very large but as you keep working at it, you will realise that the amount you’ve saved isn’t all that shabby after all.