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Ask 'Why?' Before You Buy to Make Every Dollar Count

Try the Japanese budgeting system, kakeibo, to control impulse spending

spinner image an origami bird made out of a budget written on a piece of paper
Chris Gash

I don't think I'm the only one who self-soothed through many long, isolated months of the pandemic by shopping online for kitchen gadgets, spa-grade bathroom products, garden plants … whatever. But now that I'm fully vaxxed and back out in the world, I would like to dial back that kind of impulse shopping and be more thoughtful about the way I spend money. You, too? I thought so.

One way to get there is by recording your spending the old-fashioned way — with pen on paper. That may seem unnecessarily old-school and time-consuming in an era of automatic credit card downloads. But the act of writing has power. Many studies have shown that we observe and remember things better when we write them down. Armando Roggio, a Kuna, Idaho, father of seven who hosts a YouTube personal finance show called You, Money, Happiness, tried this for six months and discovered, among other things, that he had been double-paying a $9.99 subscription for years. Though he had always reviewed his credit card bills, he never noticed the double charge until he wrote it in his journal. 

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Another useful low-tech practice is to write down your spending plans on a regular basis. At the beginning of every month, try asking yourself these four questions:

  1. How much money will I have?
  2. How much money would I like to save?
  3. How much money will I spend?
  4. How can I improve?

Targeting savings in advance forces you to prioritize them. And that open-ended “improvement” question encourages you to find savings in a way that works best for you.

These two suggestions don't come out of nowhere. They are characteristics of a Japanese budgeting practice called kakeibo (pronounced “kah-KEH-boh” and meaning “household financial ledger"), devised over 100 years ago and still popular in Japan today. It's become a minor fad in America in recent years — there's been a spate of books, magazine articles and kakeibo journals for sale — and so I decided to explore it. I'm glad I did. I learned that the kakeibo is a special kind of money journal that guides users through monthly planning and spending exercises. And it fits in with a strong tradition of thrift and savings in Japan.

And I also learned that my own sister-in-law, Yukiko Hirano, 62, has been doing this for much of her life. Growing up in the south of Japan, she watched her mother keep a kakeibo journal; when Hirano began her career, she started her own. “For me it was normal and natural,” she says. “I used it to categorize all of my expenses.”

While living in the U.S. during much of her adult life, Hirano didn't bother with kakeibo, instead tracking her spending with her checking account register and credit card statements. But after she and my brother-in-law moved back to Japan, she renewed the habit.

Her main motivation, she says, is to “always be saving money for the future.” By logging her spending daily, “I know how much I have to spend,” she says, “and I know that at the end of the month that I will have money left."

Keeping a money journal “helps me be more mindful in my spending,” says Sarah Harvey, a Londoner who became familiar with kakeibo while living in Tokyo and who describes the practice in her book Kaizen: The Japanese Method for Transforming Habits One Step at a Time. In her own money journaling, she focuses on the emotional triggers that make her spend. Before she buys anything, she asks herself a series of questions designed to help her separate the logic behind her purchases from her moods.

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Kakeibo, modified or not, can work for many of us. You can buy (last impulse purchase, I promise) an inexpensive kakeibo journal, or you can use a blank notebook and format it yourself. During each month, track every single expense by writing it in the notebook and classifying it in one of these four categories: needs, wants, culture (which includes classes, books, concerts, learning experiences and the like) and unexpected expenses. Or create your own categories so you can track expenses your way.

I like that kakeibo considers “culture” an important category of its own; it's not quite a need but more important than a want. This ties in closely to a lot of academic research that shows spending on experiences seems to produce more lasting joy than spending on material things. It also gives weight to the importance of culture and learning in our society.

You don't have to journal forever; Roggio quit writing down all his expenses within a year. Once you've spent a few months exhaustingly tracking your expenses, you probably can switch back to an automated method of household accounting or modify your spending without so much recordkeeping. He now occasionally pulls out a category he knows is a risk to his budget, such as restaurant eating, and tracks that on paper.

Finally, take that detail-driven approach with you when you shop, suggests Harvey. Before she buys anything, she does a gut check to make sure she can afford it and that she's not buying for the wrong reasons – like boredom or anxiety. After all those COVID months of emotional spending, I know that the buzz you get from buying doesn't last as long as the satisfaction of having a growing savings account.

Linda Stern, former Wall Street editor for Reuters, has been covering personal finance since the 1980s.

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