Keeping track of your expenses will help you to know in which areas you spend your money, as well as helping you to save more and to stop spending unnecessarily.
For many people saving when the end of the month arrives is almost impossible.
Household expenses accumulate. Then come personal whims and an unexpected products and services. All of this results in an excessive and uncontrolled spending of money just a few days after getting it.
In Japan, the most technological country in the world, many continue a tradition that started in 1904. Today, it is still the most effective method of savings, especially for household expenses.
It is known as kakebo. It’s used as a system of recording both expenses and income that serves for the perfect organization of money.
Kakebo is no more than an budget balancing system. In addition, it helps people to come aware of what really is necessary to buy.
How kakebo functions
This method starts at the beginning of the month, noting the fixed expenses and the total income you will receive.
Then, you can generate a balance from this data. You do this by subtracting the total expenses that are mostly basic services and food from the income.
If you would like to save for something you have planned, you must record it at this stage.
After determining the total amount of money that you have left by subtracting your fixed expenses, you can note down how much money you have set aside for saving. Determine how you will spend it in order to be clear about the goal you have set.
Throughout the month, (preferably daily, as indicated by kakebo), all the expenses of the day or of the week must be written down.
The most advisable thing is to save invoices and receipts from purchases. This way, you can later write down that night how you spent the money.
The organization of kakebo
This “agenda” is divided into many categories where we normally spend the money:
In each category, the daily spending is recorded. The aim is that all the expenses of the different divisions are added up and you get a general balance at the end of the week.
This balance will help you keep track of how much money you have spent and how much you have left.
With these results, you can analyze how much you spend and in which areas you should limit yourself a little more.
It will also help you to know what is an appropriate amount to consider for saving and to set as a more effective goal for the following month.
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The effectiveness of kakebo is completely subject completely to how organized you are as well as to your willpower.
If you set a goal to “not buy more clothes”, stick to it. Be constant and decisive.
It’s true that it helps to have a graph or spreadsheet organization for kakebo. However, it’s just an agenda that you can replace with whatever you prefer.
You can simply write down your expenses and income anywhere, and to do the accounts at the end of the month.
Having controlled expenses is very important for avoiding troubles in times of emergency. Plus, it helps you save for the goals you have in mind.
Whether you’re using kakebo with an agenda or with a napkin, it’s clear that keeping track of your accounts is essential.
If you opted to buy a kakebo planner (or kakeibo, as it is also known), remember to be constant and determined.
Did you manage to save what you had proposed? Excellent! Did you go over the budget? The next month you should be more disciplined.