Let's agree that making money is not easy for the vast majority of people. Even more so for us Brazilians living in a country in crisis. Moreover, it is the country that charges the highest taxes in the world. Not to mention the low wages and high prices of products. So it becomes almost impossible to save a little money at the end of the month. But that doesn't mean we can't keep trying.
To manage to reach the end of the month with a positive balance requires a lot of effort and organization. Keeping a strict record of expenses can be useful. Many do not like to record their regular spending. Therefore, there are many apps and products that provide this service. However, the Japanese use a much simpler and more effective method. This Japanese system is called kakeibo, and it is quite popular.
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Kakeibo, the art of saving
This method was created in 1904 by a journalist, promising to save up to 35% of the salary with simple actions. Basically, kakeibo consists of writing down everything so that you can easily see what comes in, what goes out, and how much we want to save.
The secret of this method is to write everything down instead of just keeping it in your head. At the beginning of the month, you write down all your earnings and fixed expenses. By doing this, you know what is left to spend or save. To know how to use the money, it is necessary to divide the expenses into basically four different groups. These groups are survival, optional, culture, and extras.
The first group listed as survival consists of food, transportation, water, electricity, internet, rent, and children if applicable. The second group is optional, eating out and small discretionary purchases. The cultural group takes into account expenses for books, movies, cinemas, shows among others. And the Fourth and last group, the extra, expenses for gifts and general maintenance of furniture and car, among others.
Doing this in a way forces the person to know where the money is going, allowing for changes and adjustments. It also highlights very well all the expenses that can get out of control without being noticed. It is important to keep in mind four questions:
- How much money do I have?
- How much would I like to save?
- How much am I spending?
- How can I decrease my expenses?
It is essential to be as honest as possible with our financial reality. This way, we will be able to achieve the Kakeibo objective more quickly.
Key points and tips for Kakeibo
keep an organization, perhaps through notes and a notebook, making it easier to understand. This way, you can focus and analyze your personal finances more easily. By using the four mentioned groups, you can set a fixed amount to spend on optional items, culture, and extras.
You also have to keep in mind that what you earn each month has to last the whole month. One tip is to start saving around 30 to 35% of your salary. Another is that if you forgot to take notes, try to make immediate notes without postponing them. This will help your notes be continuous and organized. If you focus on setting realistic goals at the beginning of the month, it will be a good way to maintain focus and control over your planning.
One method that can be used is the envelope tactic. In Japan, this method consists of withdrawing money for the week or for the month and putting it in paper envelopes. Defining amounts for each of the 4 areas, and what remains should be saved. Each envelope should have the area and the stipulated amount written on it. If the amount for the survival group runs out, money must be taken from the other three groups, not from the saved amount.
To save and apply kakeibo requires discipline, organization, and effort. But, if you really want to save money, this method is very helpful when applied correctly. What did you think of this method? Do you think you could manage all your finances? Let us know in the comments what you think and share it with your friends.