How to Effectively Use the Kakebo Mobile App
A step-by-step guide to save and spend mindfully in order to achieve financial peace
Kakebo, a Japanese method of budgeting turned mobile app, is unlike any other personal finance app you’ve seen.
How so? Glad you asked!
If you’re anything like us, you know exactly what it is like to go about your normal day only to later be surprised by the ending balance in your checking account. The confusion, worry and anger that comes over you when you expect to see a certain amount leads you to validate each and every line item debited from your account. Expenses you swiped using your debit card or those you paid for using Cash App, Apple Pay or PayPal have eaten away at your pay check. Month over month the same patterns continue and you can’t seem to catch a break.
Kakebo helps you take back control of your hard-earned money once and for all!
There are plenty of finance apps out there that connect to your bank and credit card accounts and automate reports for you. That automation is very convenient, but what we have found is that it detaches you from reality offering you very little accountability and because of this automation people aren’t actually taking the necessary time to review their finances, create financial goals or even track their expenses. They are just as financially unaware as they were before.
The Kakebo method (sometimes spelled Kakeibo) is a unique journaling method that requires a little more work upfront to help you achieve financially mindfulness. Follow the guide below to start your journey towards financial peace.
By now, you have downloaded Kakebo from the App Store or Google Play. After going through the app tutorial and completing registration, you arrive at your home screen. You can always get back to this screen by clicking the home icon from the bottom toolbar. The Home screen provides you with a summarized view of your current balance, income and expenses to date and your budget card(s) once you set it up. In the center of the screen, you will find three (3) cards prompting you to log your income, create a savings goal and set up a budget.
Logging your Income
To build financial awareness, you need to know how much money you’re bringing home. You might discover that you’re making far less — or more — than you realized. This includes Earnings from your pay-check, rental property, bonus, gifts, returned purchase, or any other type of income.
There are two ways to log your income. The first time you use the app, you can click on the “Log your income” card from the home screen. This card will appear only once and will disappear after you start making your entries. The most frequently used way to log income is to click on the + button in the center of the toolbar and toggling the switch to “income”. Once you get to this screen, select your income category, enter the income amount and choose the proper date. The description field allows you to enter any notes, though it is not a mandatory field. Just beneath the description field is a link to “show more options”. When clicked, you have the ability to set this income as a recurrence, which could especially be helpful if you have a fixed income. Work more than one job? Click the “Save & Add New” button to begin entering your next income amount, or click “Save” and wait until your payday to add the next income.
Note: Income amounts will only be reflected in the current balance in the home tab on the day you select. If you enter a future date, it will not show until that date the transaction is set to occur.
Creating a Savings Goal
Let’s get into the habit of saving for things that are important to you. It’s never too early or late to start saving for a vacation, new car, down payment for a home, wedding, emergency fund or any big purchase.
There are two ways to create a savings goal. The first time you use the app, you can click on the “Create a Savings Goal” card from the home screen. This card will appear only once and will disappear after you start making your entries. The most frequently used way to create a savings goal is to clicking on the Monthly Goals button from the toolbar and then click on either the card in the middle of the page (if you haven’t yet set up a goal) or the + button on the top right corner.
Select your goal category and enter the desired amount you wish to save. Next, select the duration of months to achieve your goal. The description field is optional and allows you to enter in any notes. Click the “Save & Add New” button to begin entering your next goal. You will be able to track the progress you are making against all of your savings goals on this screen.
Creating a Budget
Creating a spending plan ensures you never overspend, prepares you for unexpected life events and helps you reach your savings goals. Budgeting your money removes the stress and puts you in control.
There are two ways to create a budget. The first time you use the app, you can click on the “Create a Budget” card from the home screen. This card will appear only once and will disappear after you start making your entries. The most frequently used way to create a budget is to click on the Monthly Goals button on the toolbar and then click on either the card in the middle of the page (if you haven’t yet set up a budget) or the + button on the top right corner.
Select a budget category, enter the amount for your monthly limit and then adjust the percentage if reached you’d like to be alerted. Click the “Save & Add New” button to begin entering your next budget. You will be able to track the progress you are making against all of your budgets on this screen as well as on the home screen.
Tracking your Expenses, Income and Savings
Now that you’ve logged your income, set a savings goal and created a budget, you can focus on your expenses. Forming the habit of recording an expense immediately after you transact allows you to be mindful of your spending and the progress you are making towards your savings goals.
There are two types of expenses: non-discretionary and discretionary. Non-discretionary expenses are mandatory, essential to your survival and those which you have no influence (mortgage/rent, groceries, utilities, childcare, debt payments). Discretionary expenses are those which you do have control over (dining out, leisure and entertainment, shopping). It is recommended that you begin with tracking your non-discretionary expenses so that you know what the remaining balance is to be used towards your savings goals and discretionary expenses.
Click on the + button in the center of the bottom toolbar. By default, the toggle is on Expense. Select your expense category and enter the transaction amount. Select the date of the transaction and enter any notes you wish in the description field. Select the “show more options” link, validate the expense type and set a recurrence (optional).
Contributing Towards Your Savings Goal
Click on the + button in the center of the toolbar. Toggle the switch to Savings. Select the Savings Goal you’d like to contribute towards, enter the contribution amount and confirm the date.
[Note: Be sure to manually transfer this money from your checking account into your savings account. Consider opening multiple savings accounts if you haven’t done so already. Bonus points to you if you’ve already automated your savings and are paying yourself first.]
Reflection
Reflection is a critical step in the Kakebo method because learning comes about not from doing, but from thinking about what we do. Being mindful (aware) of our financial habits helps you realize where you are, what you want, and what matters most to you. Kakebo allows you to track your daily spending wisely by recording your expenses and assigning them to a category.
The reflection screen which can be found on the bottom toolbar. At the end of the month, you review and compare your budget to reality. As you actively use Kakebo, you will gain insight into how you are spending and suggestions on how to improve your financial habits.
Kakebo is a platform that provides visibility into where your money is going thus making you more aware. By tracking your income and expenses and taking the time to reflect on how you are spending, you will become more aware of your financial habits and make decisions that align with your goals.
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Kakebo is for anyone looking to better manage their household finances, students who are starting their first job, or children who need a way to manage their gifts and allowance.
Kakebo adopts these simple, effective and proven century-old Japanese principles and transforms this method into a digital solution encouraging you to learn your spending habits, save for what’s important and regain control of your finances. Breaking long-held habits of any kind is difficult but not impossible. With a MINDFUL approach you can break away from bad financial habits and improve your personal finances.
Download Kakebo in the App Store and Google Play.
