The main problem of a family that is always there is usually about finance. Could be due to lack of money, excess money, or because of confusion about how to manage money for people whose income is mediocre, while the needs always exceed income.
But the estuary of it all, the key word is how to manage family or personal finances with smart, careful and the best. Because the problem of managing finances does not look at the poor, middle or rich.
Because any group can manage their family’s finances. If you are able to manage your family’s finances then you can say that 50 percent of them have succeeded and succeeded in financial terms.
Managing family finances well is one of the keys to family success. The management of family or household finances is more complicated than managing personal finances because it involves many people, namely husband, wife and children.
If the management of household finances is running properly, then fortunate family members. However, if you are wrong in managing finances, be prepared to experience financial problems until the end of the month.
Whoever is responsible for managing family finances, whether his wife or husband, he is in charge of managing expenses, ranging from operational funds to credit card installments, children’s school fees, holidays, social or religious assistance, to snacks outside the home. The ‘treasurer’ of the family is encouraged to be more creative and careful in this matter, because the sustainability of the household depends on how smart they are in managing money.
Family Financial Management is the “Art of financial management carried out by individuals or families through others to achieve goals that are efficient, effective and beneficial, so that the family becomes a prosperous family and a prosperous family.
Management or management of family finances is a necessity that cannot be bargained anymore, because managing family finances has broader implications because not only oneself involved, but wives / husbands, children and maybe even parents and in-laws.
According to Rhenald Kasali, PhD, financial matters are not only the affairs of mothers who are daily believed to be “financial ministers” as well as “domestic ministers”.
The husband as the head of the household, the giver and life partner must equally understand how to manage his money so as not to fall into the trap of “living today” (in Elvyn G. Masassya, Jakarta, 2004, xvii).
Therefore in the management of family finances there needs to be “openness” between husband and wife, so that each individual does not blame or suspect each other, and each must trust each other in trust and discipline.
Management is an art, so each individual or family has their respective arts in managing family finances. However, basically management activities include POAC activities, i.e
1. Planning: Planning is a process for presenting family goals and creating appropriate strategies for achieving goals.
2. Organizing: Organizing is the process of ensuring that the preparation is in accordance with the objectives of resources and the environment.
3. Actuating: Actuating is an action taken in the context of an effort so that all planning and goals of the family can be achieved as expected.
4. Controlling: controlling is the process of controlling a family to maintain financial conditions.
Financial planning is important, especially for families to achieve a prosperous family. On the other hand, there are many people who do not have definite targets, including in financial planning in an effort to improve themselves and their families, while everyone needs clear targets to help improve family welfare by means of financial planning.
Managing family finances is important, because family finances in quantity and quality can be of maximum benefit to families to achieve a prosperous family that is sufficient materially and spiritually, and all family members can develop their potential according to their talents, abilities.
Managing family finances means managing all income or revenue both routine (continuing) and incidental (intermittent) and routine (continuing) expenses and incidental (intermittent) expenses.
The use / expenditure of money / funds must not exceed the receipt of money, the source of funds can use debt, but watch out debt can be a savior god but can be disastrous.
When there is excess funds can be done by investing or being reached as depositing themselves for the future or retirement, but watch out and be careful with “bulging investments”.
Good family financial management, when the use of funds must be adjusted to all available sources of funds in a balanced manner according to plan and utilization, between realization and targets should be appropriate and realistic, and periodically it is necessary to reflect and introspect on family finances, this will all have an impact in, which finally can achieve a prosperous family that is the desire of all people / families.
There are 6 ways to manage household finances so that income and expenditure are balanced, even saving or investing for the future. These methods include:
1. Calculate all income
The initial step in managing household finances is to add up all the income earned, from monthly salaries, overtime pay, additional income, to investment returns. The aim is to find out how much funding can be allocated for each need, namely primary, secondary, and tertiary needs.
2. Arrange priority expenditure plans in a month
After calculating income, write down the household expenditure plan from the most important alias priority. Starting from spending on food and drink, transportation, paying utility bills, water, rental housing, debt or credit card installments, and other routine costs.
3. Allocate for savings, insurance, and investment
Set aside 25-30 percent of total income for savings, insurance, and investment. For example, 10 percent for savings, 5 percent for health insurance premiums, and 15 percent for investment.
All three have their respective benefits. Savings can be used to buy a house, pay for unexpected needs, and others. While health insurance is protected, and investments are beneficial to rotate, so it does not run out. In fact, many people choose investments to double money.
If you are a beginner, choose a small capital investment, low risk, but the maximum profit, such as gold investment, mutual funds. Now there is also fintech peer to peer lending (p2p) funding.
4. Prepare a reserve fund
The need for this one is no less important. Allocate a budget for reserve funds or emergency funds. This reserve fund is used for urgent purposes. Reserve funds are free, meaning you can set aside anything for this post.
In this case, you need a commitment not to disturb the reserve fund if there is no urgent need until the end of the month. Unless you want to use this fund for investment.
5. Differentiate your needs and desires
If you have allocated money for important budget items above, and it turns out there is still money left, then you can allocate funds for secondary (support) and tertiary (luxury) needs, such as shopping for clothes, cosmetics, shoes, traveling, buying a cellphone , or other expenses.
But remember you must see the need. If you really need new shoes, because the old ones are already broken, then you can shop. Do not get hungry eyes, frantically shopping for a moment’s desire.
6. Keep Debt Ratio
To keep financials stable, don’t be in a mess, keep your debt ratio. Try no more than 30 percent of your main income. Because if more than that, then your income is only used up a month to pay the debt repayments. Or you are forced to cut other postal budgets so that you are ‘saved’ from the debt pile. Therefore, not only do a healthy life, but also maintain a healthy debt ratio of a maximum of 30 percent.