How to better manage Personal Finance?

Sangram Chavan
Published in
3 min readJan 18, 2021


“Kakeibo” translates to “household account book.” It’s a notebook where you write down your income and expenses. In 1904, Kakeibo emerged and became popular thanks to Japan’s first woman journalist. Hani Motoko, who was marketing it to a wider audience.

The Japanese are pro in personal finance thanks to Kakeibo. The Japanese had this method of writing up a budget long before any finance applications or automated tables existed. No apps, no technology, no equations that are complicated. That’s the point: you rule out anything that’s not important and concentrate on your routines and choices.

Source : Pinterest

The Four Kakeibo Expenses Pillars

  • Needs, Survival expenses
  • Wants, Optional expenses
  • Cultural expenses
  • Unexpected, Extra expenses

To draw up a Kakeibo style budget, you’ll need notebooks a big and a small one. You’ll use the big one to write down your income, and plan expenses and savings. Small, you’ll need to carry with you to record all the expenses you make.

Some benefits of kakeibo are:

  • By dividing spending into four different buckets, this simplifies financing.
  • It encourages realistic monthly savings goals.
  • It pays attention to present, past and future.
  • It encourages saving small amounts daily rather than occasional big sums.
  • 🎉 small achievements.

Work out a system of penalties for yourself. You can “punish” yourself financially for bad habits like skipping the gym or having an argument with a partner or friend. The writing process activates the part of the brain that lets the information pass directly into memory. Writing makes the process personal. We internalize everything we write by hand; it becomes more important to us.

50/30/20 Budget Rule

Senator Elizabeth Warren popularised the ‘50/20/30 budget rule’ (sometimes labelled ‘50–30–20’) in her book, All Your Worth: The Ultimate Lifetime Money Plan.

According to this thumb rule:

  • 50 percent of the earnings after tax should be used towards necessities.
  • 30 percent of the money should be spent on luxuries or wants / desires.
  • 20 percent money should be saved and invested towards your financial goals.

(EconomicTimes, 2005)

When budgeting, consider focusing on the big-ticket items. Then while setting savings goals, be specific about your plan to help you get there. Avoid high-interest debt and loans for items that will quickly lose value. Consider taking steps to help reduce your taxable income. Avoid insurance for expenses you can pay for out of pocket. And finally, consider investing for retirement.

FIRE: Financial Independence, Retire Early practitioners suggest, spend a lot less than you earn and invest or save the rest in order to reach financial independence and maybe even retire early.

In the 20s,

  • Establish your financial foundation : Emergency fund 3–6 months worth expenses (job gap, car breakdown, etc) payoff dets.
  • Participate in a retirement plan : 15% saving goal
  • Consider investing in assets like stocks : Risk rewards — Index funds low risk

Sticking to a financial plan is critical from the standpoint of long-term financial well-being. However, to build memories for a lifetime, it is equally necessary to spend a reasonable amount of time and money with our nearest and beloved ones.



Sangram Chavan

Entrepreneur and Tech Geek love to contribute to cause and faith in Karma