The Secret Money Saving Rule I Learned In Japan

Here's how the Japanese save so much money. They use a traditional budgeting system called Kakeibo, which translates to “household finance ledger."

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0:00 How I discovered this…
0:42 The Japanese Budget System
1:29 How to use the Japanese Budgeting System
8:11 The 2 other factors that helped the Japanese save more money

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[Moonstruck]

What worked the best for me was to set a savings goal upfront and treat it as a fixed expense.

[vijayakumartc]

One simple rule: whatever you desire to buy, just postpone it for two days. If you still feel strong about it, buy. Most of the time you won't.

[floydchusset]

My most important money rule is Never Put All Your Eggs In One Basket. As a 9-5er, I made more than twice my income last year from only stocks and freelance developing. I also experiment with a couple of other things. It's way harder to make money plans when it's coming from just a source No Matter How Well It Pays.

[actorsinsider]

Funny, my mom, whose Japanese, was always in charge of the finances. She was obsessed with keeping track of every single penny.

[DarkshiftGaming]

I think this is the best order to ask yourself the self questions. It's provides more straight to the point.
1. Can I afford it?
2. How did I come across it?
3. How do I feel about buying?
4. Will I actually use it?
5. Can I live without this item?

[teams]

I started saving for retirement immediately out of college. It started with my second paycheck. Took a few weeks to get the paperwork processed. I started at 6% and increased every year almost. By the time I retired I was at 30%.

[chaoticsynthesis]

Income - Spending = Savings

To make Savings go up, you can do the following:
- Increase income
- Decrease spending
- Do both

That's really all there is to it, and all that will ever be.

[BSGSV]

I must be Japanese lol. It is good to be able to put a cool name (Kakeibo) to this practice, but it also known by a Western term: "pay yourself first". I am retired now, but from college days, I never used a budget. I simply knew my income, my fixed expenses, and prioritized saving first before spending on "electives". Frugal life was part of being a poor student. But it stuck when I started working. I never spent more than I made because of this. By the latter part of my career as my salaries increased, I was saving over 30% per year. Even though I was living in a big house, driving a BMW and eating out when I wanted, my annual burn rate was well under my direct deposit amount. This meant I had after tax money that could be dumped into savings as well. A big part of keeping all of this on track was Tracking Expenses. I would randomly take a swatch of months and go to my spending account statements and do an analysis of what I spent on what categories. I did a full year analysis a few years before retiring. This meant I knew EXACTLY how much I spent in every area and how much attention I needed to pay to special areas (or not). When I told people I don't budget, they thought I was being lazy and irresponsible. The reality was that once you max out retirement withholdings and dump extra cash into savings, you are FREE to live and spend because you have already established safe boundaries. I retired early with an ever increasing net worth.

[barbarar]

Before buying something you could ask yourself how many hours you have to work to buy it.
Or sometimes I will remind myself that instead of buying a coffee at work I could use that money and buy a coffee on vacation instead.

[twizack]

Setting aside saving first is the best way to have money saved. I send my savings to a separate account in a completely different financial institution. I never see it so it keeps growing. I just got a raise so watching this video gave me the idea I should probably increase the amount I set aside.

[resterAnonyme]

I asked my Japanese wife of more than 20 years where your Kakeibo was, she laughed and said your my Kakeibo.

[christopherstewart]

One suggestion that I think could help people achieve their savings goal: if your goal is to save 10% of each paycheck, as soon as your paycheck hits your bank, move 10% into a different account (perhaps a money market account at a brokerage firm, which pays a higher interest rate than a savings account at your bank - ideally within a Roth account) rather than leaving it in your checking account. It is easier to not spend money if the money isn't in your account to begin with. Another suggestion is to save up for a purchase and buy when you have already saved the required amount, rather than put the purchase on a credit card now and pay it off over time. At least occasionally, you will find that by the time you have saved the required amount, you no longer want the item anyway.

[marosuke]

A regular viewer of your channel here, and as a Japanese, Oh my goodness I was not expecting to see Kakeibo pop up here! 😂And you even created an English version for ppl to have! Absolutely, its a tried and true way to save money👍

[planetmartay]

Love this! I'm always soaking up tips to save more money. One thing that has helped me is to say, "does this align with my money goals?" It can be something as small as a box of cookies that are on sale. Sure, it might only be a few $, but those unnecessary purchases can add up!

[Eye_Witness]

I thought I was already doing a pretty good job on my budgeting. This is a step further with more detailed accounting of where you spend and how much. I discovered my biggest monthly expense is on utilities. I chose the option to pay a monthly average so that I could budget the utility expense easier. The second thing I noticed was that I spent too much on impulse items and household items such as utensils, gadgets and tools. I like the idea of deducting your savings amount at the first and then holding the rest of your expenditures to your budgeted amount. Keeping your receipts and writing everything down, then categorizing it as he said, is a major key to your success. Great video. Thanks, Vincent.

[minas.]

I use to have a Japanese style journal called kakeibo it’s a financial planner and budget tracker. I lost it while out running errands one day, and it wasn’t in my porch when I got home but it was great for goals and setting up savings. I’ll have to get one again. I love how savings is the before thought! Pay yourself first!

[georgekatsinis]

This is brilliant.
So much GREAT INFORMATION to unpack in a short video.

[muffemod]

Stop wasting electricity with your lamp on during the day.

[nyhtzev]

Asking your employer for a larger proportion of your income to be in the form of a bonus is not a good suggestion. Bonuses are often not guaranteed. Reducing your monthly wage in favour of a bonus could reduce life assurance payouts, reduce redundancy payouts etc. Not a good suggestion.

[Amayzun]

This was a good video. Love how you explained everything and spoke calmly. Financial talk stresses me out & I've been trying to get my knowledge up in this area. Your video was very helpful. Thank you