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It’s easy to feel disconnected from your finances when you spend money with the swipe of a card or the tap of a button on your smartphone.

But when you’re mindful of where your money goes, you can cut down on unnecessary spending and put more cash toward your savings goals.

Kakeibo, the Japanese budgeting method, attempts to help people become more cognizant of their spending habits and improve the way they manage money.

Here’s how it works.

What Is Kakeibo?

Kakeibo — pronounced “kah-keh-boh” and sometimes spelled “kakebo” — is a money management style that has been around since the early 1900s. The word translates to “household financial ledger.” Hani Motoko, who is known to be Japan’s first female journalist, helped bring kakeibo to the public eye, making it popular among housewives who manage their family’s finances.

Though this budgeting method has been around for over a century, it has seen a resurgence in popularity — particularly in the Western world — as more people embrace minimalism, mindfulness and KonMari organization.

Budgeters looking to straighten out their financial lives the way Marie Kondo taught us to tidy up our living spaces need to look no further than kakeibo.

5 Steps to More Mindful Spending With Kakeibo

Kakeibo stands apart from other budgeting methods by combining reflection and journaling with common money management practices like categorizing expenses and tracking spending.

Step 1: Get a Household Ledger

One thing that’s important to mention about kakeibo is that it’s intended to be done on pen and paper — hence the “household ledger” translation. Physically writing down your spending gives you a more tangible sense of where your money is going rather than using an app that records your expenses for you.

While several kakeibo budgeting journals have been published in the last few years — like Fumiko Chiba’s “Kakeibo: The Japanese Art of Saving Money” — you don’t need to buy a guided journal to get started. A plain notebook can serve the same purpose.

Step 2: Reflect on How You’re Spending Money

If you’re setting up your own kakeibo journal, start each month off by reflecting on the following four questions:

How much money do you have available? How much would you like to save? How much are you spending? How can you improve?

Jot down income you’ll have coming in during the month and subtract fixed expenses that you’re obligated to pay — like your rent or mortgage, utilities and minimum debt payments. The money you’re left with is your available funds for the month.

Step 3: Set a Savings Goal

From that amount, decide how much you want to put aside for savings. Think about what you’re saving for and why you’ve set that goal. Are you on track to reach your desired amount or do you need to find ways to reduce your expenses or bring in more income?

Step 4: Track Your Expenses

After putting aside money for savings, log your spending in your journal as it occurs. Using the kakeibo method, you’ll keep track of the type of expenses using four broad budget categories:

Needs: This would include groceries, clothing and medicine. Wants: Factor in expenses like gym memberships, dining out and spa services. Culture: Buying books and attending festivals would fall under this category. Unexpected or extra expenses: This could be things like car repairs or an emergency vet visit.

As you record your spending, write about why you made each purchase and how you felt. Were you feeling rushed or stressed as you were shopping? Were you giving into retail therapy because you were having a bad day? Did you buy something just because it was on sale, even though you have no room for it at home? Did you feel glad that you bought something you’ve been waiting weeks to buy?

Step 5: Reflect on Your Spending Habits

In a way, you can treat your kakeibo journal like a diary. Exploring your feelings about spending money can help you get to the root cause behind poor habits — like overspending when you’re pressed for time or when you’re out with friends you want to impress. Ideally, you want to feel happy about the way you spend your hard-earned cash.

At the end of the month, you’ll total up your spending in each of the four categories and reflect on how you’ve managed your money. You might want to do mini check-ins at the end of each week.

Ask yourself: Did your actions align with your financial goals? What were your successes and failures? Think about how you can improve going into the month ahead.

Benefits of Tracking How You Spend Money With Kakeibo

If you want more control over your spending, the Japanese art of kakeibo is a great budgeting style to try versus other budgeting systems for the following reasons:

Kakeibo doesn’t apply percentages to saving money.

You don’t have to follow set budget percentages. How you spend your money is truly a reflection of your unique financial goals.

Kakeibo’s categories make sorting monthly expenses easier.

You don’t have to stress about organizing your spending into rigid budget categories. Kakeibo’s four categories are pretty broad, but they paint a good overall picture of where your money’s going.

The Japanese method of kakeibo emphasizes deliberate spending.

Using pen and paper also helps you stay aware of how much cash you have available to spend at all times. And knowing you have to record your spending at the end of the day may make you think twice before giving in to an impulse purchase.

Kakeibo’s small changes can make a big difference.

Embracing mindfulness in your daily routine through kakeibo can help you reduce nonessential purchases and trim weekly spending. Ultimately, the money kakeibo saves will set you on the right path to reaching your saving goals.

Nicole Dow is a former senior writer at The Penny Hoarder. Kaz Weida, a senior writer at The Penny Hoarder, contributed.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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