Kakeibo MethodThe household ledger
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The household ledger

Savings target · AUD

Save A$1,000 in 36 months

Saving A$1,000 in three years means A$27.78 a month, A$6.41 a week, or A$0.91 a day. Here is where that comes from in a kakeibo ledger.

A$1,000 in 36 monthsAUD · three years
Every monthA$27.78for 36 months, or A$30.00 as a round standing transfer
  • Every fortnightA$12.82
  • Every weekA$6.41
  • Every dayA$0.91
  • Entries to make1096 days
What it costs a dayUnder the line
A$0.91

Money stops coming out of discretionary spending alone at A$50 a day, where the rule is drawn. This target sits below it.

A figure this small per day is below the threshold most people notice money leaving at. That is an argument for automating it on payday and never thinking about it again.

Three years is long enough that the plan should be automatic and boring. The interesting work is making sure the money sits somewhere it is not casually spendable.

Against an income

What this asks of your income

The ladder simply runs the division backwards: A$27.78 a month is twenty percent of A$139, ten percent of A$278, and thirty percent of A$92.59. Find your own income on it and you know what you are asking of yourself.

  1. 10%A$278 a month take homeA$250 left to live on
  2. 15%A$185 a month take homeA$157 left to live on
  3. 20%A$139 a month take homeA$111 left to live on
  4. 25%A$111 a month take homeA$83.33 left to live on
  5. 30%A$92.59 a month take homeA$64.81 left to live on

The dark slice is A$27.78, the same money on every rung. What changes behind it is the pay packet it has to come out of, which is the whole reason a savings rate is a better question than a savings amount. The marked rung is twenty percent.

Where the money comes from

Which envelope pays for it

Kakeibo sorts spending into four envelopes rather than dozens of line items, and that is what makes a question like this answerable.

  • Survivalwhat keeps the lights on: rent or mortgage, groceries, power, rego and fuel, insurance
  • Optionaltakeaway, subscriptions and the shopping you would not miss
  • Culturea course, a gallery membership, books
  • Extrathe irregular hit: car repairs, a wedding gift, the vet

A$27.78 a month, carved

  • Optional100%A$27.78

Total moved to savingsA$27.78 a month

Splitting it across Optional alone keeps the target inside discretionary spending, which is where kakeibo does its best work. Optional is takeaway, subscriptions and the shopping you would not miss, and the ledger will tell you which line it actually is within a couple of weeks.

Small targets are worth taking seriously because they prove the mechanism. The habit built here is the one that carries a much larger number later.

The method, against this number

The four questions, against this target

The method is four questions asked once a month, in that order. Here they are with this page's numbers in them. The long version of each, with the reflection prompts, is in the four questions guide.

  1. 01How much money do you have?Everything that lands in the month, before anything is committed. The plan below only works from a real figure rather than a remembered one.
  2. 02How much would you like to save?A$27.78 a month, or A$30.00 if you would rather set a round standing transfer and finish early.
  3. 03How much are you spending?Recorded by hand, in four envelopes, as it happens. This is the part that makes the A$1,000 possible, and the part every method skips at its peril.
  4. 04How can you improve?Answered once a month for 36 months, in writing, against the running total rather than against a feeling.
If the plan changes
A different targetSave A$2,000 in 36 monthsA$55.56 a monthA$27.78 a month more than this pageA different horizonSave A$1,000 in 24 monthsA$41.67 a monthtwo years instead of three years, and A$13.89 a month harder
The same target on every other horizonA month, then a day
Every other target on this horizonA month, then a day

A$0.91 a day is under the A$50 a day line, which is where a target stops being a spending question and becomes a housing, transport or insurance one. On three years you could carry A$54,787 before crossing it, so there is A$53,787 of room in this plan.

The same target in another currency

$1,000 in 36 months$27.78 a month, written for the United States£1,000 in 36 months£27.78 a month, written for the UK

Or work from your own figures in the save an amount by a date calculator, and start from the method itself in what is kakeibo.

Common questions

How much do I need to save each month to reach A$1,000 in 36 months?
A$27.78 a month. Set it to A$30.00 and you arrive early with a small cushion, which is usually worth more than the exact figure.
What is that per week and per day?
A$6.41 a week, A$12.82 a fortnight, and A$0.91 a day across roughly 1096 days.
Which kakeibo category should the money come from?
Start with Optional. On this target it carries about 100 percent of the monthly figure, which is A$27.78. The ledger tells you the specific lines within a fortnight.
What happens if I miss a month?
The shortfall spreads across what is left. Missing one month here adds about A$0.79 to each remaining month, so it is recoverable, and the monthly reflection is where you decide whether to absorb it or move the date.

A$27.78 a month is arithmetic. Holding it is the ledger.

Kakeibo works because you write the spending down as it happens and read it back once a month. The app does the totals so the writing down is the only work left.

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The Kakeibo app showing a monthly budget with income, expenses and a savings goal in progress