Easy Tips for Organizing and Managing Finances

Who doesn't know Ade Rai? Who would have thought that an ordinary person could turn into an extraordinary bodybuilder. The physique that he has shaped to make Indonesia proud in the international arena certainly did not appear in an instant. Training and hard work and discipline are certainly daily activities for Ade Rai.

Apart from training, managing a disciplined diet also played an important role in his success as a bodybuilder. Did you know, in finance it also takes practice and disciplined financial management in order to produce a strong financial condition? The exercises that we do are also similar to those of the monks, namely: gradual, focused, and consistent. So, to be able to form a strong financial condition, here are 5 tips that you can do:

1. Do it focused and specific

If you are trying to manage your finances for the first time, it may be too much for you to cover everything at once such as insurance, emergency funds, investments, debt management, inheritance, etc. To make it easier for us, we should focus on 1 or 2 things first.

Try to focus on our weaknesses first, for example if we are used to being extravagant then we focus first on reducing expenses, or if we don't have insurance even though there are many people whose lives depend on us then we focus first on life insurance, or for example we don't have any savings at all. then we focus on emergency funds and investments. Thus we can manage our finances more calmly and not be too burdensome for our daily lifestyle.

2. Do it gradually

Like exercise training, we can't drastically change our lifestyle in an instant. Like a person who has never exercised who immediately tries to do 100 push-ups, it is also impossible for us to save 50% of our expenses to allocate to investment and insurance.

Do it gradually so we can do it more calmly and comfortably. Don't put too much psychological pressure on yourself. Too much pressure will stress you out and give up halfway. If you can manage your finances comfortably then you will tend to be happier and motivated to do so in the long term.

3. Do it consistently

Sports experts say that to maintain physical fitness, regular and consistent exercise is needed. Likewise in finance we must manage our finances consistently so that our financial condition is always prime. All financial plans in the long term will only be achieved if done consistently.

If you have a plan to save for a retirement fund then do it until you retire, as well if you have a unit link then pay the premium until it is finished according to the policy agreement. Stopping halfway can result in your investment not reaching the target.

4. Take care of your cash flow

Cash flow consists of two things: income and expenditure. In spending, of course, you want to make your expenses as optimal as possible so that they are smaller than income. While in income you can do these three things.

First, try to increase your income posts to minimize the risk of reduced income. Second, try to make your total income grow each year at least as much as inflation. Third, always increase the investment portion every time your income increases. In addition, use this reference to measure the health of your cash flow: the maximum debt installment is 30% of income, the maximum insurance premium is 10%-15% of income, and the minimum investment top-up is 10% of income.

5. Always monitor the progress of your investment

This is the easiest thing to do but sadly the least. Many of us only do top-up investments but have absolutely no idea how the investment moves. They always assume that in the long term the value of their investment will definitely go up so that if it goes down they assume that the decline will only be temporary. It's not always the case though.

It should be realized that there is no investment product in this world that goes up forever. Even the 'safest' investments such as gold have experienced a period of stagnation for approximately 25 years before being able to penetrate higher numbers. So whatever your investment product, you should always monitor how it develops. At least do monitoring once a year and don't hesitate to change your portfolio if your investment doesn't go as expected.

Above are 5 tips to build healthy finances. Always remember that being 'rich and well off' is not only about capital, titles, jobs, or fate. Financial security requires focus, consistency, discipline, will, and hard work than anything else. So the conclusion is that everyone can become financially secure as long as we are all willing to put in the effort.