How to Make Financial Planning during the Pandemic Period

By Adi Permana

Editor Vera Citra Utami

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BANDUNG, – Financial literacy is one of the soft skills that everyone must have. However, most Indonesians don’t have it. This matter was discussed by lecturers from the ITB School of Business and Management through a webinar with the theme of “Financial Literacy 101: Build your wealth through financial planning”, on Tuesday (23/6/2020). Financial literacy is a person’s ability to conduct good financial planning. The webinar raised three topics, which are the Financial Planning Process, Personal Financial Statement, and Ratio Analysis, also Cash Flow and Debt Management, in which these topics were delivered by three different speakers.

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The first topic was delivered by Dr. Subiakto Sukarno M.B.A., RFA, QWP, CFP. According to him, the first step to conducting good financial planning is to set goals, which in this case is related to welfare. “Planning is carried out because of the various risks in our lives, such as the occurrence of COVID-19 right now,” said Dr. Subiakto.

Dr. Subiakto explained statistical data shows that life expectancy of Indonesians is around 70 years old. This tends to increase compared to the past because health facilities are now increasingly sophisticated, education and knowledge are also increasingly developing, facilities and infrastructure are more adequate, and followed by other supporting factors.

He compared, “If someone can live up to the age of 90 years and retire at the age of 60 years, then there are 30 years that must be faced by that person, so it is very important to conduct good financial planning,” he said.

The financial planning process begins by writing down all the budgets we have. Before that, we need to set some aside for emergency funds, such as funds for sickness, layoffs, and others. Next, we need to set goals, starting from the short term (like tuition fee), medium-term (like transportation fee, home payment), and long term (pension fund). Followed by managing the existing surplus and allocate it for investment.

The scope of financial planning also includes inheritance planning, personal planning such as taxes, risk management planning, and other planning like making foundations, raising the pilgrimage for parents, and other things that would make us happy and prosperous, which these need to be in accordance with the original purpose of making financial planning. Lastly, the final step is to conduct an evaluation every year.

Personal Financial Management

On the next topic, Ahmad Danu Prasetyo, S.T., MSM, Ph.D. explained about Personal Financial Statement and Ratio Analysis. He mentioned that there are four steps in recognizing a person’s financial condition, which is by knowing the income and expenses, knowing the list of assets and liabilities, conduct financial health checkup or check the financial health conditions, and knowing their current risk profile. Furthermore, there are two types of instruments required to prepare personal financial reports, namely income statement (cash flow) and assets & liabilities report (balance sheet).

Meanwhile, Dr. Sylviana Maya Damayanti delivered the cash flow and debt management topic. “Cash flow management can be started from simple things such as saving and recording shopping bills because the essence of cash flow management is to record,” said Dr. Sylviana. After recording what income and expenses have increased or decreased, then check the financial health condition by calculating income minus expenses and analyze whether there is a deficit or a surplus.

If there is a surplus, it doesn’t mean we can shop more, instead it can be allocated to be the investment or emergency fund. Good financial planning should be followed by one’s financial priorities, which are obligations, needs, and wants.

During this COVID-19 pandemic, according to Dr. Sylviana, most of the community experienced a decrease in income, but some experienced an increase in income by taking advantage of pandemic conditions, like mask businesses. “However, during this pandemic situation, Indonesia still survives with the cooperation spirit so that many donors donate,” said the SBM ITB lecturer.

Reporter: Ahyar (Metallurgical Engineering, 2018)

Translator : Wendy Anastasia Yeoda (Management, 2017)