I Tried Japan's 100-Year-Old Envelope Method for 30 Days, by Japanese Living Secrets on YouTube. 15 min 7 s.
- Video length
- 15 min 7 s
- Time to do it
- 20 minutes
- Difficulty
- Easy
- Steps
- 10
What you need
Steps
Get four paper envelopes and write one label on each: essentials, optional, culture and extra. These are the four Kakeibo categories you split your money into.
Add up your take-home pay for the month. Divide it across the four envelopes and write the amount on the front of each one.
Fill essentials first: rent, food, utilities, transport and every bill you must pay. Most people go wrong by leaving this envelope too thin.
Put a fixed amount in optional for eating out, treats and shopping. When that envelope is empty, you stop spending there until next month.
Set money aside in culture for books, courses, hobbies and days out. This is the envelope that keeps the system worth doing.
Drop a small amount into extra for repairs, gifts and surprises. Even a little cash here stops one shock bill from wrecking the month.
Pay in cash from the correct envelope and write the amount on the back. Watching the paper get thinner is the whole point of the method.
Before you buy anything, ask one question: which envelope pays for this, and is there enough left in it?
Do a five-minute review once a week. Check what is left in each envelope and plan your spending for the days ahead.
If you are starting from nothing, begin with $20 and four envelopes. Run the habit for a month, then scale up to your full income.
Tips and common mistakes
Never borrow from the essentials envelope to cover optional spending, because that is how the method falls apart.
Keep the envelopes somewhere you see them every day, not hidden in a drawer.
Adjust the amounts after your first month so they match what you really spend, not what you guessed.
Withdraw cash once a month rather than topping up envelopes mid-week.
Questions
What are the four Kakeibo categories?
Essentials, optional, culture and extra. Essentials covers bills and food, optional covers treats, culture covers learning and hobbies, and extra covers surprises.
Do I have to use cash?
Cash works best because you can see the envelope emptying. If you rarely carry cash, use four labelled accounts or a notebook instead.
What happens when an envelope runs out?
Stop spending in that category until next month, or move money across from optional. Never take it from essentials.
This guide was drafted from the video's details and general task knowledge. It has not been checked against the full video. Check the video and relevant product instructions before following a procedure. Report a correction.
