A quote from Arne Garborg reads:

“With money, it says you can buy everything, no, that’s not true (with money), you can buy food but you can’t eat it, you can buy medicine but not health. buy a soft bed but did not sleep; Buying knowledge but not being smart Buy luxury but not comfortable Shop for fun things that aren’t fun. have many acquaintances but no friends, but no servants, but no loyalty. Gray hair but no honor, have lonely days, but don’t buy peace. A shell of everything you can get with money. but not on point The essence of a shell cannot be bought with money.”

It means that money is still important in life. Although it can’t be used to buy everything we need. Money is the only tool used to accomplish these important things. And this tool must be handled appropriately. One way to manage your money well is through financial planning.

Understanding Financial Planning

According to the Indonesian Financial Planning Standards Institute (FPSB). financial planning or financial planning is an attempt to achieve one’s life goals through planned financial arrangements. The purpose of life is to go on a pilgrimage, send children to school, etc.

Instinctively, human desires abound, but not from the resources they have. These resources include money, time, effort, and ideas. For example, you want to have your own home. But the money you have now is not enough. Thus, economic activities in the world exist and humans interact with each other.

financial planning objectives

The purpose of financial planning is to increase the level of happiness or satisfaction in human life by allocating the above limited resources for unlimited human needs.

with good financial planning At least you know how much money it takes to fill these needs. the money you currently have and when that goal will be achieved. You will also have content you can use to assess the progress of your life’s goal-fulfillment process.

Who should do financial planning?

There are at least four economic actors: individual communities, families, families, corporations and governments. It is still recommended that each economic actor prepare financial planning.

From the actors of the company, for example, you know the accounting and finance team that compiles the company’s financial statements. at the government level There are some such as the State Income and Expenditure Budget Draft (RAPBN) and the Regional Revenue and Expenditure Budget Draft (RAPBD).

family household It is recommended to plan your finances as well. This is because a household includes at least two people with different personalities and needs. The individual is also important. financial planningBecause after all, each person’s needs and wants must be huge while his income is limited.

Benefits of Financial Planning for Individuals and Companies

1. Financial Allocation by Priority

by preparing and having a financial plan At least a person or a company can allocate the financial resources they have for the things they need.

These are sorted by priority. Therefore, the priorities take precedence. In this way, the money of the person and the company will not be wasted only on the unimportant desires.

2. Financial planning as an evaluation tool

because of the many desires and dreams that a person achieves Often a person will lose the direction and record of the dream because he is not focused. with financial planning documents How much money can we allocate to achieve the desire and see the success history of that desire? Therefore, he could not only directly imagine what would happen if the wish came true. but also taking clear steps to make it happen

In the corporate arena, this financial planning document can also be used to obtain additional funding from third parties. Be it a bank or an investor and can be used as a medium to assess the investment projects they are currently working on.

3. Suppress Anxiety

One of the advantages of collecting financial management documents is that it reduces individual anxiety. by compiling this document properly and with discipline A person can remember the indirect assets he has and how to obtain them for liquidation or exchange. so that it can be used to meet urgent needs

People with good financial management skills will also have emergency fund and or Insurance available when neededThe presence of an emergency fund and insurance can indirectly reduce anxiety about the future.

Why does financial planning have to be realistic?

In recent years, there have been rumors that a person will need to have billions of Rp. But is it true?

Good financial planning can help individuals and companies know how their financial decisions affect the life of an individual or company. Therefore, financial planning must be realistic.

In the case of billions of dollars that must be owned before the age of 30, for example, not everyone earns tens of millions of rupiah to save. Not everyone has enough intelligence to invest without being deceived. And everyone has different daily and monthly needs.

You can earn billions before you turn 30. However, with a current salary like UMR, of course you have to increase your working hours, reduce sleep, etc., which can ultimately compromise your own health. must be as realistic as possible

How do you plan your finances?

1. Set the priority level.

The first step is to determine the level of importance. In this case, we know two types: needs and wants. Needs are things that must be fulfilled to keep your life going. While demand is something that if you can please thank you, if not then no problem.

Priority needs are divided into three parts: basic needs; (Primary) Secondary and Higher Education Requirements Basic needs must be met first. before secondary and tertiary needs. On the other hand, if a crisis arises Demand for higher education and secondary education can be reduced.

If you are married and want to plan financially for your family Be sure to discuss priorities with your partner as well. Because it’s possible that your partner has different needs and desires.

2. Set time interval

One factor you should consider when setting your priority level is the time frame. Generally, the duration of fulfillment of these needs and desires is divided into three phases: short-term, medium-term, and long-term. this time is “Can be deferred” or “Cannot be postponed”

Home needs For example, a house or board is, in theory, a basic requirement. However, having your own home is a wish. And because you are not married or can still live in both parents’ homes. The need to buy or build a home can be categorized as a long-term fundamental need that can be postponed .

3. Make financial records

After the needs and desires have been recorded according to the level of importance and duration. It’s time for you to make financial records. These financial records include:

  1. How much money is needed to meet these needs and wants?
  2. When is your goal to meet those needs?
  3. What tools do you save for that need?
  4. Record daily income and expenses

There are now many technologies that you can use to create these financial records. From spreadsheet applications like Microsoft Excel to personal finance applications. with an application like this The financial management and assessment process will be easier for you.

4. Evaluating financial records

The final step in financial planning is assessment. Make sure you estimate how much you use for your daily needs. Pay off debt and credit for investment for this month’s emergency fund If there are posts that still need to be added or deleted. Please modify it for use next month.

Financial planning can be quite complex and requires a lot of discipline. Your present and future needs and desires can certainly be properly fulfilled.


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