Want To Save Money For Property Purchase? This Japanese Technique Could Be Of Help
Are you planning to buy a property for years, but have not been able to save enough amid the many expenses that keep on cropping up every month? You might just need a better saving technique. Try Kakeibo.
This 114-year-old money-saving technique has it roots in Japan. Introduced by Japanese journalist Motoko Hani in 1904, the technique is now translated into a book, too. This technique lets you record where the money goes and help you become more organised.
The technique that literally translates to household account book, lets you save 35 per cent more than what you have been saving so far every month. Higher savings help you achieve your home-buying goal much faster.
How does it work?
The technique is simple and makes you think. All you need is to sit with your Kakeibo or the household account book at the beginning of every month and start filing in certain details.
To begin with, split your monthly expenses into four:
Survival: Apart from the basic of food, water and shelter, there are other utilities you pay for every month, too. This includes electricity, water, mobile phone, healthcare and transportation bills.
Optional: These are occasional expenditures we make. This includes buying new clothes, going out for dinner and planned vacations.
Culture: The expenditure you will make for your entertainment. This includes movies, books, concerts, and other experiences.
Extra: These are your unplanned and sometimes unexpected expenditure and may or may not come up every month. These include birthday gifts or sudden breakdowns at home that need repair.
Once you fill these four, get ready to answer four questions:
How much money do I have this month?
How much I want to save?
How much will I spend?
How can you improve on that?
Now, begin to calculate how much money you have by deducting the fixed monthly expenditure from your monthly take-home pay. Next step is to set a savings target, and deduct this money from what you have right now. This will give you the money you have left to spend, while you keep away the money you want to save. Using the handbook, keep a track of progress on a weekly or a monthly basis and see whether or not you have achieved your target.