Jakarta, CNBC Indonesia – In the past, it might have been thought that they were still small, but make no mistake, now they are already a quarter of a century old, those are people born in 2000.
If you were born exactly in 2000, you would be 23 years old now. Which phase are you in? Are you still in college? Fresh graduate? Or are you already in the first jobber phase?
Based on the theory popularized by Graeme Codrington & Sue Grant-Marshall, those born between 1996 and 2012 are called Generation Z.
Generation Z are the descendants of Generation X, or could also be the descendants of the Millennial Generation who married at a young age. Generation Z is often said to have similarities with the Millennial Generation, only they are much closer to technology and the virtual world.
It is not surprising that finally the article on Wikipedia states that this generation is also often called iGeneration, GenerationNet, or Internet Generation.
So what good financial planning looks like for them, here is the review.
Learn to manage cash flow
Some of those aged 23 years are people who have just escaped from the dependent phase of life. In financial planning, the dependent phase is the phase where we are not yet financially independent and we need someone to depend on for life, say our parents or guardians.
After passing through the dependent phase, a person will enter a new phase which is often referred to as first jobber.
Considering that financial planning is something that is not taught in school, quite a few first jobbers often talk about the difficulty of managing finances, saving and investing.
The main step that can be taken is to learn to maintain healthy cash flow. Make your best efforts, from any income you get, you should not spend it all.
There must be funds set aside at least 10% of income for savings.
Your first savings is an emergency fund
You may ask, why save if you are still single and have no plans to get married in the near future.
Know that, there are many urgent matters and disasters that can drain our savings. The disasters or things in question are layoffs, loss of income due to business risks, damage to work equipment, and so on.
Unfortunately, these things can come uninvited, meaning they can come at any time.
For this reason, it is very important to have emergency savings worth at least three times your monthly expenses.
Start collecting money for emergency fund savings from 10-20% of your monthly income. Once the funds have been collected, maintain their availability and do not use them for non-urgent needs.
Don’t just take insurance
In fact, apart from the disasters above, there are still other disasters that are more dangerous. Not only does it drain your savings, this risk could cause you to lose assets or force you or your family into debt.
Moreover, if it is not a disaster in the form of illness, accident, death, or loss of assets with very high prices, such as motorbikes or cars. That’s why you can consider buying insurance.
If you don’t have dependents, make sure you have BPJS Health whose contributions are paid regularly. If you have more income then consider buying inpatient health insurance.
You might think, now you get health insurance facilities from your workplace. Why buy insurance again?
When you no longer work at the current company, the facility will be revoked. And it’s not certain that you can get the same facilities when you work for another company, that financial protection could be lost.
The older you are when you start insurance, the more expensive the health insurance premiums you have to pay. Therefore, start at the age of 23 years, and choose the right product.
If you are offered another insurance product, know that for someone who doesn’t have dependents, health insurance alone is actually enough.
Buy life insurance if you are the breadwinner who covers the living expenses of the people in your family, which could be parents, brothers, sisters, and others.
Also know that don’t allocate too much money for insurance. Just allocate a maximum of 15% of your monthly income to pay premiums.
Know that you still have a long way to go
Those who are still 23 years old are certainly still far from retirement. But you can’t ignore this one matter.
In retirement, you are expected to have savings that can cover your living expenses until you die. With these savings, you can certainly live a relaxed life without having to work at an age that is no longer productive.
It is very important to start investing to accumulate retirement savings early. Invest regularly in stocks, stock mutual funds, mixed mutual funds or index mutual funds to build retirement funds.
Do this after you have emergency funds and protection, at least in the form of BPJS Health.
Increase your income so you can set aside more money for retirement funds. You can do this by pursuing your career, or by adding other sources of income.
You may have short-term goals such as buying assets, getting married, having children, traveling, and others. You can allocate money as early as possible for these financial goals, but always remember that long-term goals are the most important.
Control your lifestyle
The more luxurious your lifestyle, the more difficult it will be for you to allocate money for long-term investments.
Know that the money you spend on things you want, such as shopping for hobbies, clothes, traveling and other entertainment activities, will just disappear. And you won’t get rich with these expenses.
It’s not wrong to have fun, but never forget that you must have future retirement funds and other assets that can provide peace of mind in the future.
No need to compare financial achievements
There will always be people the same age or younger than you but more financially secure than you.
It could be that this person’s income is 2 or 3 times your income. Or maybe, he already has more assets than you.
Being busy comparing your own achievements with other people can have bad consequences in the long run. You may be tempted to do whatever it takes to get rich instantly, until you end up falling for fake investment offers and so on.
Know that everything requires a process, including your life journey from being a first jobber to becoming a successful person.
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