Sunday 31 December 2023

Welcome the New Year 2024, let`s remember again, the importance of financial planning


Welcoming the new year 2024 which is only a matter of hours away, we need to make positive changes, one of which is doing better financial planning.

By doing good financial planning, we can have a good future too.

Please note that planning for the future is often associated with various risks at every stage of life, especially in terms of financial preparation.

Not a few people think that there will be unexpected expenses caused by various factors such as changes in lifestyle, work, health and mental conditions, friendship environment, and so on.

Especially for those who already have dependents or have a family, financial preparation for the future needs to be given more careful attention.

The results of the Empowering Aspirations 2023: Financial Preparedness in Asia survey released by Prudential show that 64% of Indonesians have concerns about how they will meet their future needs if something bad happens in the future.

Regarding the importance of preparing emergency funds, a survey entitled Adult Financial Literacy 2020 revealed that only around 9% of Indonesians can survive more than six months using emergency funds if they lose income, and as many as 46% only have one week to survive.

The remainder, namely 18%, have one month to survive, 6% for three months, while 22% do not know whether they have an emergency fund if they lose their job.

Without good and thorough financial planning and preparation, a person will be at risk of experiencing difficulties, especially if something happens and impacts the family left behind.

This means that financial planning and preparing the availability of emergency funds at every stage of life is a must.

Here are a number of reasons why we need to do financial planning:

1. Nobody Knows What Will Happen in Tomorrow No one can know for sure what will happen to us and our family in the future. In fact, our lives tomorrow may be very different from today.

This can happen, for example, due to losing a job, experiencing a disaster, suffering from illness, and so on. Having sufficient financial reserves will certainly be very helpful in difficult times like these.

2. Constantly Changing Lifestyle As we get older in our productive years, our income from work will automatically adjust. When income increases, there will usually be adjustments in various things including lifestyle.

For individuals who are married, of course this change includes costs for children who are also getting older. The amount of emergency funds that need to be prepared should follow developments in increasing income and lifestyle.

3. Worry Free When You Are No Longer at Productive Age Everyone wants a peaceful life, both at a young age and in old age.

However, productive age does not last forever. If someone has planned and prepared finances, it will create calm or peace of mind in life.

Therefore, productive age must be utilized as well as possible to plan the finances needed when we are no longer productive.

4. Achieving Financial Goals Planning finances can help us identify and achieve financial goals, such as buying a house, children’s education, or a dream trip.

Organized financial planning, including preparing valuable legacies for the family, is an investment for a future life that is calm and free from anxiety.

Not only for ourselves, but also for our family or the people we love.

Make sure to complete our financial goals with protection solutions, so that our family’s financial plans can still be achieved if a risk occurs to us.

5. Have a Valuable Legacy for the Family If something suddenly happens beyond our control, for example death, the family life we ​​leave behind will continue. Good financial planning, including the investments we have had, will be a very valuable legacy for them.

What should we do to start preparing financially and have a valuable legacy while achieving blessings? Check out the following tips!

1. Setting aside income Do you still remember when we were little, our parents bought us earthenware piggy banks in the shape of chickens or jugs? We are taught to save, set aside some pocket money every day so that we can make our dreams come true, for example buying the shoes, bag or bicycle of our dreams.

Just like when we grow up, setting aside a portion of our income will be very useful in the future.

2. Maintaining Health by Adopting a Balanced Lifestyle The phrase ‘health is expensive’ is felt when we suffer from illness.

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