According to Kamus Besar Bahasa Indonesia (KBBI), merdeka means being free or the state of not being enslaved. Our nation has been free from colonialism since August 17, 1945. What about us as individuals? There are many freedoms that we can achieve, one of which is financial freedom.
Financial freedom can be interpreted as a situation where you no longer need to worry or be afraid of your financial condition. You can fulfill various needs of daily life, as well as your lifestyle.
At the same time, you have enough assets not only for tomorrow but also for the future. These assets can be in the form of savings, investments, etc. Every Jagoan can reach financial freedom. Keep in mind, financial freedom is not the same as having unlimited wealth.
And, the meaning of financial freedom, according to certified financial planner Annisa Steviani, does not have to be the same for everyone. When interviewed by Bank Jago, Annisa explained that everyone should ask themselves.
“Reflect first, what kind of financial freedom do you want? There are those who already have enough passive income to meet their needs and lifestyle, but still want to keep working. Some have enough passive income without working anymore. There are also those who define financial freedom by having a deposit or owning 5 houses.”
So, what should be done to achieve financial freedom?
We Can Achieve Financial Freedom, Here's How
To achieve financial freedom, in general, there are a number of phases that we need to pass. “Being able to enjoy financial freedom at the age of 30 is a minority. Most people go through the struggling phase first. This is usually when we just get our first salaries, maybe we still need the help of our parents.”
“After that, there is the surviving phase where salaries have started to rise and we are no longer dependent on other people. Then in the maintaining phase, there are no consumptive debts. All needs can be met properly without the need to go into debts. The last phase is the building phase. In this phase, we are ready to face an emergency and start looking for ways to add assets. Not even working, we can meet all needs," Annisa explained.
Now for real steps to realize financial freedom, you can start by doing the following things:
1. Determine the life goals you want to achieve
To be able to move with certainty, you need to first determine the goal. Therefore, in terms of financial freedom you need to determine your life goals or financial goals you want to achieve.
What is a life goal? For example, at what age do you want to retire? How much money do you need to be able to live a worry-free retirement? Is having a house important to you? If so, when would you like to have it?
Another important thing to remember is that your life goals don’t have to be the same as someone else's. Some people want to own a private car, but some feel comfortable using public transportation. Determine the life goals that you think are important to you.
2. Make careful financial planning
When your life goals are clear, you can start making careful financial planning through budgeting. You can separate various expenses into their respective posts. Start with priority spending first. Examples of priority expenses are bill payments, food and transportation.
In addition to priority spending, savings is also important. If you want to reach financial freedom, then of course you must have sufficient savings to eliminate anxiety, stress or anything negative related to financial matters.
Careful financial planning can help you control the use of money so that there is no more overspending.
Separating the budget is synonymous with having many accounts to be better at managing finances. But, you don't have to worry about having trouble monitoring expenses if you have accounts everywhere. Not to mention the incurring admin fees.
With Jago, you can have up to 40 accounts, all of which can be monitored in 1 application. Each Jago Pocket that you create comes with its own Pocket number. The Pocket Number is the same as the account number. The cool thing is, you can have 40 Pockets without paying monthly admin fees.
3. Clean up your finances
No less important, cleaning up finances can make you one step closer to being financially independent. What does it mean to clean up finances?
If you have unpaid debt, you can find a way to pay it off immediately. Especially if the debt arises because of a consumptive lifestyle, FOMO and various other reasons that make the debt fall into the category of consumptive debt, not productive debt.
4. Have both short-term and long-term strategies
To be able to win something, you must have a strategy. It's the same when you want to win financially, that is financial freedom.
The short-term and long-term strategies are closely related to savings. If next week something unexpected happens and you need a lot of money to deal with it, what will you do?
If you have an emergency fund, then it's safe. You can immediately dip into your emergency savings. Therefore, it is important to apply short-term strategies such as building an emergency fund.
Then, for a long-term strategy, you can invest or save money in a place where you will not be tempted to spend it. Because, money will be used to meet long-term goals, which will only be fulfilled maybe 10 or 20 years from now.
Deposits can be your choice when applying a long-term strategy. In the Jago application, you can save money in the form of a flexible deposit in a Locked Pocket. Flexible because you can save money from as little as Rp 100 thousand, lock it from as short as 14 days and add money to your Locked Pocket whenever you have more funds.
However, because you are saving money for a long-term goal, you can lock the Pocket longer for up to 1 year. After that, you can extend the locking period of your Pocket for up to 1 more year. Then another year, then another year. This is to ensure that the money is safe from being used inappropriately, for example, being used for online shopping.
And, do you know that your Jago Pocket can be linked to the mutual fund investment application Bibit? Those of you who are interested in investing in mutual funds will find it easier and more practical to plan long-term finances. Free top up fees, free from the hassle of switching applications and the Auto Top Up feature are some of the benefits that you can get from the digital ecosystem created by the Jago and Bibit collaboration.
There is a trick for those of you who save in the Saving and Locked Pockets. If you want to be hassle-free from transferring money to savings and at the same time ensuring your savings are always filled consistently, you can take advantage of the Autosave feature.
Jagoans, reaching financial freedom does take time. But, that doesn't mean it's impossible. Jago always accompanies you in your every step of realizing financial freedom. It's a relief when you can be free from financial burdens and financial anxiety.
The Jago application can be downloaded here for those who don't have it yet.