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Many Indonesians will remember 2020 as the year people lost jobs and businesses failed, resulting in millions of families falling into poverty because of the economic impact of the Covid-19 pandemic.

Poor habits in managing money can lead to serious financial problems in the family. And the situation can be made worse if an unexpected economic shock strikes. That is why for households that run without a financial plan, the pandemic has increased their financial vulnerability. Indeed, the pandemic has ruined people’s finances around the world. But Indonesians can recover quickly from the Covid-19 economic hardship by adopting sound household financial practices and habits.

To recover quickly from the Covid-19 economic shocks and build a more resilient financial base, families need to rethink their financial planning for 2021. They say that two heads are better than one, and now is the time to apply each other’s strengths in the family for financial security.

In many Indonesian households, women manage the family finances because they know the family’s needs and prioritize spending. Therefore, the best results can be achieved if the husband and wife put their heads together to discuss family finances.


It Is Best To Live Within Your Means

Overspending habit is a significant cause of financial ruin in many families. Trying to keep up with other families on material possessions can quickly drive you into overspending and irresponsible borrowing to make up the difference between your expenses and the money you make. It would help if you resisted the temptation to overspend.

For a prudent family financial planning, you will need to make a budget. You should clearly outline the expenses and income. It is best to live within your means, which means your expenses should not exceed the money you make. If you can keep your expenses below the money you make, you can save and invest in attaining financial security quickly.

Preparing a budget can help you track your expenses and keep them within your means. That way, you can protect against irresponsible spending that can drive you into debt and make your family financially vulnerable. Therefore, you should strive to prepare a budget for your family finances in 2021.

When budgeting for family finances, you may want to rule out borrowing to cover living expenses. Instead, it would be better to borrow toward purchasing an asset that will make you money and expand your income.

Save Instead Of Borrowing For Purchases

Once in a while, families will face financial decisions that require big spending. While you may borrow to finance a big purchase like buying a house or car, it is best to have a saving plan. Further, saving is the best way to ensure financial security for your family.

Life is full of uncertainties, and many of the life emergencies will require financial solutions. If you have saved up some money, you can live more confidently.

If the Covid-19 economic disturbance has taught us something, it is that saving is essential. As people lost jobs and businesses collapsed, families turned to their savings to survive. Families with big savings experienced fewer economic shocks than those with little savings or no savings at all. Therefore, you should have a savings plan as you enter 2021.


Invest In Expanding Your Income

As you think about the 2021 financial plan and Covid-19 recovery, investing should be part of that plan. For a family pursuing financial security, investing is as good as saving.

Investing can boost your income and allow you to meet your family’s living expenses more comfortably and give your children the best education you can afford. With an investment, loans taken to develop the family financially can become more manageable.

There are many investment opportunities across Indonesia. Unfortunately, the low level of financial literacy is still holding back many Indonesian families from identifying the right investment opportunities and taking advantage of them to grow their wealth.

Finally, marriages can be more peaceful, and family development can be quick with proper financial planning. If the Covid-19 pandemic ruined your family finances or you would like to build a more substantial financial base for the years ahead, then living within your means in 2021 and saving and investing should be your top priorities.

They say the best time to plant a tree was 20 years ago. The second best time is now. Therefore, start taking steps to financial freedom now.

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