The Single Best Thing I’ve Done for my Personal Finances

Once upon a time, not so long ago, money worries would keep me awake at night.

Not all the time but sometimes. I didn’t spend more than I earnt but I didn’t really save either.

If a big unexpected cost came up, cue stress and sleeplessness.

Until this.

I bought a Kaikebo.

Which is what exactly?

As the name suggests, it’s Japanese. It’s a system for managing money.

Essentially you set a budget and savings goal at the start of each month and then track all of your spending.

It change my life.

Taking My Financial Power Back

That might sound dramatic but it certainly put me in control of my spending in a way I never had before.

I diligently recorded my expenditures for three months. If I missed a day I went back and filled it in. I checked against my banking apps to ensure I missed nothing.

As part of the Kaikebo system, you create your own categories to allocate the spending against. The beauty of creating your own classification is they can align with what’s important to you. For me, this meant food spending with friends went under ‘Social’. Deliveroo, when I was too lazy to cook, went under ‘Food’ which was separate from ‘Groceries’.

Social spending wasn’t an area I wanted to cut back on as my friends are super important to me. But seeing how much I was spending on food outside of my allocated grocery budget was eye-opening, to say the least.

It really put it into perspective that one Deliveroo order, so maybe two meals at a stretch, was the equivalent of half a week’s groceries. Ouch!

Knowing that doesn’t stop me having Deliveroo occasionally. It empowers me to think twice about whether that’s how I want to spend my money.

Budgeting meant I understood how much of my salary was accounted for by rent and bills and debt payments. Knowing what I had left over each week and month changed how I viewed random purchases.

I used to buy new boots after payday not realising that most of my discretionary income for the month was now gone. No wonder things got tight at the end of the month. Not anymore.

Related: Consistency: Unlock A More Successful Life Every Day

Moving Beyond My Kaikebo

Three months of using my Kaikebo gave me many, many more examples of how my spending decisions changed based on the knowledge gained.

Over time I started to systemize my financial decisions, so it was easier to do the right thing.

What this looked like were separate bank accounts and automatic payments. I set myself some budgets and financial goals. Budgets for travel and experiences, goals around paying off my student loan.

From the budgeting part of using my Kaikebo, I knew what my monthly expenditures were so I set about allocating the rest of my salary to these budgets and goals.

Plus some spending money that I was free to do whatever I wanted with. I knew if I didn’t build some slack into my system I was more likely to break it. It’s all about knowing yourself so you can make decisions that work with you, not against you.

The last step was to set up automatic payments for the day after payday. Every month my money disappears into these buckets. I no longer have to think about what I can and can’t afford. Wanting to book flights? It’s simply a case of whether there’s money in my travel account or not.

With internet banking, various financial apps and tools it’s never been easier to systemize your financial habits. Sometimes though, the old-fashioned ideas work best. When I’m having a particularly tight week, for whatever reason, I get my budget out in cash. I find it much easier to manage physical cash when I’m being conscious of dollars and cents. Or pounds and pence as the case may be.

Once I had systems in place to support my financial goals, I stopped tracking my spending. Habits don’t need to be forever. When they’ve served their purpose, taught you what you need to know, it’s ok to relinquish them.

But! Only if you’ve learnt the lessons. It needs to be a conscious decision. This habit is no longer contributing to my life. I’ve grown beyond it. Replaced it with more sophisticated habits or systemised it. That needs to be the thought process.

It can’t just be skipping one day turning into never completing your Kaikebo again. Remember I tracked my spending for three months, two weeks won’t cut it. The longer you go, the more you’ll learn and the more the lessons will stick. If in doubt, keep going.

Personal Financial Empowerment

It’s been nearly a year since I started on this journey. Since then I’ve been about to afford a new visa for the UK, flights home, unpaid time off work while still traveling and going to West End shows.

Using a Kaikebo has really shown me that I can afford anything I want. It’s simply about being clear about what I want and making my spending reflect those desires. New boots are great and all but when flights are the same amount of money, I pick the experience of travel.

There’s something so satisfying about being in control of my finances. Of being able to make informed decisions. That unexpected expenses are no longer a source of stress, I can handle them.

I said using a Kaikebo changed my life and based on the changes in how I feel about money, it certainly has.

And it will for you too.

Tell me, what tools do you use to manage your finances?