Jakarta, IO – For most people, the month gets scarier as it progresses further and further from payday. More days in a month means that their finances thin out, and their buying power likewise decreases. People generally can afford to eat fancy food at the start of the month, only to degrade into eating instant noodles by its final days. They can patronizes businesses up to twice a week in the first two weeks of the month, only to laze around the house, sleeping and watching Korean dramas on Netflix, by the end of the month.
And that is about venturing around to eat; what about the other two basic needs of clothing and shelter? Most of us would rather ignore such basic needs, instead spending money on traveling or watching a concert, a bad way to allocate our money, one that results in our being unable to take care of our daily needs properly.
We need to upgrade our financial management knowledge, in order to be able to enjoy the fruits of our labors, without getting consumed too much by debts and bills. It is something that we all can do, but not many know how to.
According to the blu by BCA Digital survey performed in August 2021 on respondents aged 18-34 years of age, 61% claimed to be familiar with the topic of financial management, but they are unable to explain it properly, let alone to practice it in their daily lives. The same survey further notes that 34% of respondents are actually confused and don’t know how to manage their own finances! This is sad, as financial management is a basic skill, like cooking your own meal or dressing yourself. Like everything else, it will be fine if you just dare to sit down with yourself, face the situation, and start with the basics.
In fact, managing one’s finances is not that hard. The first thing to do is determine what the money you earn will be used for. This is where the SMART principles of “(S)pecific, (M) easurable, (A)chievable, (R)elevant, and (T)ime-bound” come in. Let’s deal with it in more detail:
1. Specific
First of all, you need to be specific in determining your financial purpose, i.e. what you need to pay for with the money you earn. Start with covering basics of food and working expenses, utilities (water, electricity, internet, cellphone, home phone), household staff, taxes, insurance premiums, school fees, and instalment payments (house, car, motorcycle, or whatever you bought on credit).
After deducting these important expenses, then you can calculate how much is available for travel, eating out, clothing and jewelry, and other “fun” purposes.
2. Measurable
How much money will it take to reach your goal? Make sure that you know. There is a price for everything under the sun, whether it is a bowl of spaghetti or a pair of party sandals or a trip to Spain. Find out how much it will cost you, exactly.
3. Achievable
Now that you know how much money you will need to get what you want, to do what you want to do, the next thing to see whether or not it is achievable. With the amount that you earn, can you do it? Is it something that you can actually do or get, or do you need to give it up? If you believe you can achieve it, how will you do it? Make an action plan – a plan that you really will do and just do it – otherwise it will stay nothing but a daydream.
4. Relevant
Now look again at the financial goal that you want to achieve. Is it relevant to your current lifestyle and future plans? Ask yourself these important questions: (1) how important is this goal for your life plan? (2) What alternatives do you have? (3) How skeptical or sure are you that you can achieve this financial goal?
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5. Time-bound
Set a time target: how long will it take you to achieve this financial goal? Is it more of a short-term (1-5 years), or a long-term goal that will take literally at least a decade?
Duardi Prihandiko, BCA Digital’s Head of Marketing Communications, reminds us that financial management is a basic ability that everyone needs to have. “blu by BCA Digital is designed as a financial buddy. We are #SiapJadiPegangan or #ReadyToBeReliedOn by the sobatblu, our beloved users, in managing their finances. We also facilitate the sobatblu in performing their various banking transactions with features like bluSavings for savings, bluInvest for investments, and bluInsurance for different kinds of protection,” he explained. (des)