When I compared the Japanese “Kakeibo” budgeting method to Dave Ramsey’s financial approach, the results were stark. My month-long experiment revealed a clear winner in terms of both ease of use and long-term sustainability. As an entrepreneur juggling multiple responsibilities and limited time, finding a budget strategy that worked with my hectic lifestyle was crucial.
The two approaches cater to different mindsets, but what surprised me most is how Kakeibo addressed not just my spending habits but my overall attitude toward money. Let’s dive into what makes these methods distinct, and why Kakeibo proved to be a game-changer for my finances.
Breaking Down Kakeibo: Simplicity and Mindfulness
Kakeibo, often described as Japan’s traditional household ledger method, focuses on mindfulness. Developed over 100 years ago, it remains popular for its simple yet reflective design. At the start of each month, you write down your projected income and expected fixed expenses, such as rent or utilities. Then, you allocate funds for savings and discretionary spending.
What sets it apart is the intentional questioning involved. You ask yourself: How much can I or do I want to save this month? The method also breaks spending into four categories: survival (like food and housing), optional (leisure or entertainment), cultural (books or classes), and extra/unexpected costs. Everything is tracked by hand, often in a notebook. This physical interaction creates a stronger mental connection to money, reinforcing conscious spending.
Results with Kakeibo
By keeping a physical log of every expense, and categorizing them, I found myself questioning many small purchases. Before buying a fancy coffee, I’d genuinely consider if it added value to my day. Over a month, I saved 23% of my income, higher than the 15% I typically aim for.
But beyond the numbers, the clarity about “why” I spend was refreshing. As an entrepreneur constantly surrounded by tools and systems, this analog, tactile approach felt grounding.
The Downside?
Kakeibo’s manual aspect could feel tedious for those unused to writing by hand, especially in a world dominated by apps. However, this drawback is also its strength, it forces active participation.
Dave Ramsey’s Approach: Structure and Discipline
Dave Ramsey’s system shines for those who struggle with financial discipline. His method revolves around a “zero-based budget,” where every dollar is assigned a purpose, leaving no room for random spending. Additionally, the cash envelope system ties specific budget categories, like groceries or entertainment, to actual cash. When funds run out, you’re done spending.
Ramsey also emphasizes paying off debt through the “snowball method” (starting with the smallest debts to build momentum). For entrepreneurs juggling loans or credit, this approach might resonate.
My Ramsey Experience
Initially, I found it strict but effective. Separating finances into envelopes made spending limits tangible. Seeing the funds deplete was a clear motivator to avoid unnecessary shopping sprees or eating out. However, by the second week, the rigid nature started weighing on me.
As someone whose schedule varies unpredictably, needing to adjust envelopes on the fly felt stressful. There’s also no reflection built into the method, it’s purely transactional. In the end, I saved around 18% of my income, but the process felt like a chore.
Comparison Statistics: Kakeibo vs. Ramsey
I tracked my performance across both methods carefully. Here’s how they stacked up:
| Metric | Kakeibo | Dave Ramsey |
|---|---|---|
| Savings Percentage | 23% | 18% |
| Emotional Impact | Reflective, calming | Stressful, rigid |
| Ease of Use | Medium (manual effort) | High (structured setup) |
| Long-Term Likelihood | High (sustainable) | Medium (requires high discipline) |
While both led to more intentional spending, Kakeibo felt empowering, while Ramsey’s approach felt restrictive.
Using Kakeibo: A Quick Start
The beauty of Kakeibo lies in its simplicity. Here’s how to get started:
- Set Financial Goals: Decide how much you want to save and allocate funds for main categories: essentials, optional, cultural, and unexpected.
- Track Daily Spending: Write down every purchase, no matter the amount. Use a notebook or digital spreadsheet if you prefer.
- Reflect Weekly and Monthly: Look back and ask: What purchases brought me joy? What was unnecessary?
- Adjust as Necessary: Make small changes to hit your goals without feeling like you’re depriving yourself.
Common Mistakes to Avoid
- Skipping Daily Tracking: Letting expenses pile up without daily recording defeats the mindfulness aspect.
- Ignoring Reflection: The process works best with honest end-of-month evaluations of what worked and what didn’t.
- Over-categorizing: Four simple spending areas are enough; don’t complicate things unnecessarily.
Insights for Entrepreneurs
As someone managing startups across borders, I’ve realized that money management for entrepreneurs requires striking a balance between control and flexibility. Unlike personal budgeting, where consistency reigns, business owners thrive in adapting their strategies to demand. That’s why something like Kakeibo, with its focus on self-reflection and adaptability, suits entrepreneurial thinking.
By observing where money is allocated, patterns emerge. For example, I found I was spending significant amounts on business lunches for new connections. While valuable, cutting back by even 20% freed up cash to reinvest in other growth efforts, like digital advertising.
If you’re building a business or freelancing, understanding where your money goes, without inflexible rules, can be transformative.
Takeaway
Kakeibo is a powerful option for those looking to not just save money, but also rebuild their relationship with it. It’s particularly effective for entrepreneurs who value mindfulness and need budgeting systems that adapt seamlessly to their unpredictable lifestyle.
On the other hand, Ramsey’s method is great for straightforward, short-term results, especially if you need to tackle debt or rely on discipline to keep finances in check.
For me, the winner was clear. By asking the right questions rather than dictating rigid outcomes, Kakeibo became more than a budgeting tool, it was a form of self-care, helping me make financial decisions that align with both my entrepreneurial goals and personal values.
FAQ
1. What is the Kakeibo method for budgeting?
The Kakeibo method is a Japanese budgeting system that emphasizes mindfulness, self-reflection, and categorizing expenses into essentials, wants, culture, and unexpected costs. Learn more about Kakeibo
2. How does Dave Ramsey's budgeting approach work?
Dave Ramsey’s budgeting method includes zero-based budgeting, assigning every dollar a purpose, and using cash envelopes for spending categories to limit overspending. Explore Dave Ramsey’s system
3. Which budgeting method saves more money?
Based on a comparison study, the Kakeibo method saved about 20% more of the author’s income compared to Dave Ramsey's approach. Discover the comparison
4. Are Kakeibo’s principles applicable to entrepreneurs?
Yes, Kakeibo’s flexibility and reflection-focused approach make it suitable for entrepreneurs, helping them understand spending patterns and allocate funds effectively. Learn why Kakeibo suits entrepreneurs
5. What are the disadvantages of the Kakeibo method?
Kakeibo’s manual tracking can be tedious for individuals accustomed to digital tools but reinforces mindfulness through active participation. Understand Kakeibo’s challenges
6. Who would find Dave Ramsey’s method most useful?
Ramsey’s system works best for people struggling with debt, as it integrates strict discipline and clear financial structure to promote repayment and savings. Discover Ramsey’s debt-saving strategies
7. Are there apps based on the Kakeibo method?
While Kakeibo traditionally involves manual tracking in a notebook, some modern apps integrate its principles for tech-savvy users. Explore Kakeibo-inspired apps
8. How does Kakeibo help with mindful spending?
Kakeibo emphasizes reflecting on spending habits and questioning purchases, helping to identify unnecessary expenses and cultivate financial awareness. Understand Kakeibo’s mindfulness focus
9. Why is Kakeibo considered sustainable?
Kakeibo promotes long-term financial health by encouraging consistent reflection, adaptability, and a positive relationship with money rather than imposing rigid constraints. Find out why Kakeibo is sustainable
10. Can Dave Ramsey’s method lead to burnout?
Yes, Ramsey’s strict financial discipline and rigidity can sometimes feel overwhelming, especially for individuals with unpredictable schedules. Explore Ramsey’s potential drawbacks
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.