Salary ends as soon as it arrives? Use Japan's Kakebo trick to save money every month

New Delhi: With rising expenses, saving from one's salary is difficult for almost everyone. As soon as one's salary arrives, one's account is emptied within 15-20 days, and one has to wait for the next month's salary to meet expenses. Many people resort to borrowing money from others after their salary is exhausted. 

Thus, when one's salary arrives, one has to repay the loan along with expenses, and the same situation persists by the end of the month. To avoid this financial crisis, the Japanese adopt a trick called Kakeibo, which allows them to save a small amount of money each month. They follow this as a rule every month, thus saving money from their salary. Let's learn about Japan's Kakeibo method and how it can be used to save money.

What is Japan's Kakebo trick?

Kakebo is a Japanese budgeting technique, originated by journalist Hani Motoko in 1904. This method involves keeping a record of your income, expenses, and savings. The goal isn't just to reduce expenses, but to understand where and for what purposes money is being spent. You don't need any special apps. You can create your budget using a diary and pen, or even write it down on your phone's notepad.

How will you save every month using the Kakebo method?

The Kakebo method is quite simple and allows you to easily save money every day. With monthly savings, you can save around one lakh rupees in a year. Let's learn the full process of this method.

1. First, calculate your earnings
Write down your total salary at the beginning of the month. Then, calculate your rent, EMIs, groceries, electricity bills, medicines, and other essential expenses. This will help you determine how much money you have left after all the essential expenses are covered.

2. Set a savings goal
As soon as you receive your salary, decide how much you want to save that month. For example, if your salary is ₹30,000, you might aim to save ₹3,000 to ₹5,000, depending on your needs and expenses. It's best to keep this amount in a separate account.

3. Write down your daily expenses
The Kakebo method requires keeping track of even the smallest expenses. You'll need to write down any money spent on tea or coffee, online food orders, cabs, shopping, movies, or outings. At the end of the month, these small expenses will help you understand how much they impact your savings. This will also help you understand where wasteful spending is occurring.

4. Divide expenses into different categories
Divide your expenses into four categories: essential expenses, desires, entertainment expenses, and unexpected expenses. This will help you understand where spending is essential and where you can cut back.

5. Review the budget at the end of the month
Simply recording your expenses isn't enough. At the end of the week or month, review your spending and whether you've met your savings goals. If you're spending more on online shopping or eating out, try to reduce them next month. So, if you save ₹5,000 per month, you'll save ₹60,000 per year. If you save ₹10,000 per month, you could end up with ₹100,000 in savings by the end of the year.