Kakeibo- Japanese Art of Money Management

Anything Japanese attracts eyeballs for a reason, and Kakeibo is no exception. This Japanese art of money management is simple to execute.

Our grandparents followed the system, but we have not continued the same. The Japanese stay close to tradition, much more than their counterparts in other parts of the world. The Japanese lifestyle is always considered worthy of emulation.


  1. Let me take you back to November, 2016 – the month of Demonetisation. The government allowed each individual to deposit up to Rs. 2 lakhs in cash, without any questions being asked.

Other than the usual suspects holding unaccounted money, women topped the list of holding cash. Housewives disclosed a lot of savings held in cash, in denominations declared defunct.

What exactly were they doing? They save for exigencies not knowing that money needs to be invested and multiplied. Cash does not grow or multiply on its own. They lost the benefit of returns on investment.

But the intent is right. One needs to put away money for a rainy day. It is their financial freedom. It gives them the much-coveted feeling of financial wellness. They know the art of money management.

2. Those of you born before 1980 may remember your parents writing down daily expenses in a notebook or diary, which was then carefully locked away.

3. My father had an interesting accounting system for purchase of apparel. Every month, a certain amount was set apart in our names (me and my brother) for clothes. When I bought clothes, he deducted the amount from the accrued amount. He created a kind of ledger account. Whenever we were struck by a desire to possess fancy threads, we asked for the outstanding balance in our account. That was our shopping budget.

School uniforms and shoes were not included in this. He had carefully separated needs from wants.

I wish I had followed the system in later years. I could have saved a lot of money, but did not. I succumbed to temptations like many of us do.


Kakeibo is the Japanese system of maintaining income and expense accounts in a diary.

They believe that writing something creates a better connect with the subconscious. It rules our actions by getting imprinted on the subconscious.

The conscious mind is fickle, where data is constantly being replaced with new information.


The system is simple.

Write down your monthly income – salary, rent, monthly interest, pension. Exclude annual inflows like bonus, dividends on stocks etc. Save those for long-term investments.

Now, classify your monthly expenditure into sections




Utility bills

School and college fees

Amount paid to domestic help

Keep adding….

Eating ouBooks & magazinesSubscriptionsMedicinesContingency provisionInvestment on personal development and staying updated


  1. If both the sides match, you are in for trouble.

You need money

  1. to pay annual premiums

2. for tax compliance

3. to save for financial goals

4. for holidays and social occasions

What you need to do here is separate the needs from wants. It will pave the path to move further.

2. If income is more than expenses, you are good, but to what extent?

Your saving and investment plans will fall in this bracket.

3. If expenses are more than income

Consult a financial coach or debt management expert immediately.

You will need to augment income or reduce expenses. Learn how to do it.


Different versions of Kakeibo diaries are available online


Well, you are in a majority, if you find yourself asking this question.

Create a digital version on an excel sheet and update it every day.

GoogleSheets has some formats. Elucidation of details calls for a separate article.

Scan Google Apps for the Kakeibo app.


Monika Halan, ex-financial writer for Mint now is an advisor in the Finance Ministry. She is the author of

Lets Talk Money. She manages a family and family finances.

She advises having three bank accounts – one for receipt of income, one for expenses and one for savings and investments. Once you have labelled the accounts, the temptation of mixing up the three elements is reduced.

The adage is no more

Income – Expenses = Savings.

It gets translated to

Income – Investments = Expenses

You are now on your path to financial freedom…..

Make your children financially literate to ensure financial wellness in future

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