Kakeibo, a household accounting book, and the practice of recording and monitoring income and expenditures in a physical notebook, traces its origins in Japan to 1904, and to Hani Motoko, its inventor. The kakeibo method forces one to think about one’s needs, spending and motivations, leading to an increased ability to save. (1, 2, 3)
Financial Wellness
The fundamental difference with existing personal financial planning is that “Financial Wellness” does not begin with money, but with an understanding of Wellness and the associated attainment of longevity and the 100-year life.
Without having wellness at one’s core, money worries can flood in. Surveys usually find money to be the number one cause of stress. With wellness the core focus, money becomes a facilitator, in fact just one of many facilitators. Fortunately, a wellness regime only requires a modest amount of money
Financial Wellness & Savings
In an environment of the 100-year life, we postulate that after education, people will be working from age 25 to 80 followed by 20 years of leisure.
Whilst working, we recommend saving 20% of one’s after-tax income.
In contrast to the conventional study-work-retire cycle, the new typical life will include one or two career reinventions involving changing industries (as well as working for multiple different companies during each career phase). Career reinventions will involve perhaps 1-3 years of retraining, repositioning.
To facilitate the above financial resources are needed not just for the 20 years after the age of 80, but also during the career reinvention periods.
For more, please see the 17-page Financial Wellness paper here.
References.
- CNBC: I tried ‘Kakeibo’: The Japanese art of saving money—and it completely changed how I spend my money, by Sarah Harvey, published January 2020
- Credit.com, Kakeibo: The Mindful Japanese Budgeting System, published August 2021
- Japan Times: Kakeibo: Turning a dull aspect of Japanese life into social media gold, published January 2020
