“When you write down your purchases, put each of them under a corresponding category. For Kakeibo, there are four different groups that your finances and spending are allocated to: needs (e.g. food), wants (e.g. a takeaway or new clothes), unexpected expenses (e.g. a car repair) and cultural purchases (e.g. trip to the theatre or a new book).
“The idea behind the different categories is that it ensures users of the technique are assigning money, that is left after necessary expenses, for things that align to their goals. It also simplifies your finances by putting them into four clear groups, making it easier to recognise where you spend the most money.”
Finally, when it comes to the Kakeibo savings method, if Britons are hopeful to secure success, they will need to take action by calculating the money they have spent and saved once they reach the end of each month, preferably according to the aforementioned categories.
They will then need to add together to deduct the amount of their total budget which was first established in Kakeibo step number one. This draws the entire savings journey together into one cohesive plan to push Britons towards their financial goals.