Reflecting on the Kakeibo Budget method
For the past several years, I've done a Reverse Budget, but circumstances have meant that I've needed to tighten up on how I spend, so I decided to marry it to the Kakeibo Method to track spending and find additional savings. (If you google, you will find many other guides and videos that go in depth into Kakeibo and some sites include free printables.)
If you've struggled with other budget methods because they are too strict, inflexible, overwhelming, or the software has a learning curve, Kakeibo might be the right fit for you.
What I like about the Kakeibo method is:
It's super frugal to get started and maintain. All you need is paper and pen. (You probably have a notebook hanging around, and if you don't, they are cheap.)
It holds you accountable by making you log expenses as they happen (or no later than end of day), by making you reconcile spending each week, and by reflecting on lessons learned at the end of the month.
It makes you come to grips with your income and how much money you have "free" after your fixed expenses. (And to determine those fixed expenses, you will be examining your CC and bank statements closely, because you will be listing those expenses out to start each month.)
It has some aspects similar to reverse budget in the sense that once you've allocated money for your monthly fixed expenses, you are free to spend your weekly "allowance" however you see fit.
It is simple! There are 4 broad spending categories, and no trying to forecast variable expenses. So you're not overwhelmed with "giving every dollar a job", or feeling bad if something goes over the money allocated to an "envelope", (or for failing to realize you needed an envelope to begin with).
It considers cultural (leisure and pleasure) spending a legit category, and not just a "want". Going to the movies/museum/concert or buying a book? Culture. The non-work convention (vacation) I had last month? Culture.
It's flexible and adaptable to your needs and lifestyle. For example, to marry it to Reverse Budget, I consider my "pay your self first" savings one of my fixed expenses. If the 4 categories are too broad for you, create as many as you need for granularity.
I've also figured out a work-around for 4 week months vs 5 week months. I don't track my spending via calendar weeks. I divide each month in to 5 "weeks" of 6 days, with some months having a final week of 7 days. (Did I mention it is flexible?)
Does it work?
Well, last month, a month where I had a week where I went way over the allowance because of my vacation (as I knew I would -- I just noted that this week there was a vacation); because of the way it slowed down my spending and made me think? I still ended up with $476 to sweep to savings at the end of the month.
