Could this Japanese technique cut your spending by 35%?

At the start of a new year people often look to new ways to help them save.

Kakeibo is a Japanese money saving technique gaining momentum in Australia, helping some cut their spending by 35 percent.

Effie Zahos from Money Magazine told Weekend Today how the method can help you save.

TODAY: What is Kakeibo?

EFFIE: Kakeibo translates to “household finance ledger”. It is a traditional japanese journal filled with spreadsheets where users are encouraged to write down their spending. The books are also filled with affirmations and inspirational messages to motivate you in your money-saving goals.

TODAY: How does it work?

EFFIE: The book encourages users to sit down at the beginning of each month and plan out the following four week’s finances. The difference between your expenses and income will show you how much money you have available for the rest of the month.

The method also asks users to set monthly goals: for example, bring your lunch from home every day then answer the following four questions:

1) How much money do you have?
2) How much would you like to put away?
3) How much are you actually spending?
4) How can you improve on that?

TODAY: What are the four spending categories?

EFFIE: Expenses need to be broken down into four categories:

Survival – which covers food, transport and all things medical
Optional – which covers takeaway, shopping and restaurants
Culture – which involves books, music and movies
Extra – which is for things like gifts and repairs.

TODAY: What are some more modern ways to save?

EFFIE: There are many great helps to help you keep track of your spending.

Pocketbook is a free budget planner targeted to Australians. It links your bank accounts, credit cards and loans and then keeps track of your spending and breaking it down into categories such as groceries, bills and travel.

The Mint App offers tips to help you budget and reduce your spending. You can also use the free app to pay your bills. It will even send you alerts if there are any unusual charges.

The Goodbudget App uses the envelope budgeting method where income is distributed to spending categories each month and paired with a savings plan. Technology also allows you to share the budget with other people and saves five years of financial history.

* In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.