In life everyone certainly has goals to achieve. Some people want to have enough capital to start a business. Some want to be able to help meet the needs of parents. Some others want to be able to have their own house and car someday. When talking about goals, there will be no end, especially since everyone's goals can be different.
However, one thing applies to everyone. To be able to achieve a goal, having a certain amount of money is required. For example, if you want to have your own house, you have to save money. And, the most basic way to ensure you have money to save is positive cash flow.
Cash Flow Management Tips from Philip Mulyana
Positive cash flow means that the money coming in is more than the money going out. According to financial planner Philip Mulyana, the easiest way to ensure cash flow stays positive is to track expenses and do budgeting.
“Keeping track of expenses and budgeting are the most important things to do, even though many find them boring. In fact, both are the main foundation in personal finance," Philip said during the Cash Flow Therapy, a webinar held in collaboration with Bank Jago in the #KumpulJagoan event.
Furthermore, Philip said, keeping track of expenses can increase your awareness to avoid overspending. “By tracking our expenses, we will know how much money we have spent, for example, on snacks. We also know when it's time to put the brakes on spending. Maybe people will think we are stingy. It’s fine because what we need to consider are our long-term goals, what we really want to achieve in the future.”
According to Philip, when recording expenses, another thing that is no less important besides recording is categorizing expenses. "Why? Because you need to be aware if you want to spend money. It's like there's one more layer of awareness. The problem is not how much money we have or how much money we are willing to spend. The main concern is ensuring a healthy cash flow.”
Illustration of expense category in the Jago application
“After being able to be disciplined in tracking expenses properly, the next step will be to budget better. Afterwards, we just have to stick to the budget to reduce expenses,” Philip explained further.
Why is budgeting done after consistently tracking expenses? "After we are aware of our shopping habits and the categories we usually spend a lot of money on, we have to do budgeting. When budgeting, we will allocate funds or provide rations for each category of our expenses," Philip answered.
One other tip that according to Philip is important in personal financial budgeting is that you don't need to be too strict. “Sometimes we have allocated this amount for online shopping, but it turns out we need more money. No problem, maybe the budget can be increased a little in the next month. But, review first. Maybe the online shopping budget can be added by taking budgets from other spending categories.”
“Budgeting is for the long term. If you go overboard, you can't enjoy life. In the end you can't stand it, your financial planning may be ruined. For spending that is a bit too much, the budget can be reduced little by little, don't cut it drastically."
Ensuring Healthy Cash Flow With Jago
Philip admits that keeping track of expenses and budgeting can be boring, especially after a few months. Philip finds himself greatly helped after using Jago, a financial management application that is supported by the power of the digital ecosystem and owned by Bank Jago, a digital bank in Indonesia.
“Using Jago when spending money, I no longer need to take notes of expenses manually. When recording expenses, what we need to record is not only the nominal, but also the vendor and the category of expense.”
"Jago automatically records all expenses and the vendors when we transact through the application or the Jago Visa Debit Card. Expenses are also automatically categorized by Jago. However, if we feel the category is not right, we can change or adjust it ourselves,” Philip shared his experience using Jago to ensure a healthy cash flow.
Meanwhile for budgeting, especially for those just starting out, Philip suggested that the budget for 1 month be divided into 4 different weeks to make it easier. There are also several ways to divide the budget, you can divide it equally or divide it based on habit. For example in the 4th week the budget is bigger because you need to pay the water and electricity bills.
Philip relies on the Pocket feature, which is also in the Jago application, for practical budgeting. The Pocket allows you to create up to 40 Pockets. So, for initial budgeting like Philip's suggestion, you can create 4 Pockets. 1 Pocket for a week's budget. You can rename each Pocket to make it easier.
Illustration of budgeting with the Pocket in the Jago application
For payments that you usually use cash, such as shopping at supermarkets or buying gas, from now on, you can switch to the Jago Visa Debit Card.
“The Jago Visa Debit Card can be linked to a Pocket. For easier expense tracking, link your weekly Pocket to the physical debit card. As soon as the week changes, you simply link the card to the next week's Pocket. It's much easier to do budgeting this way,” said Philip.
To love budgeting even more, Philip reminded us not to forget to use the Spend Analysis feature. This feature details the total expenses as a whole and also per category.
"We can see which categories of expenses we can save more. This is awesome, you can keep on reducing expenses. Data can be obtained without us having to do manual recording. Hassle free and time saving.”
Together, we can be jago at cash flow management by applying some of the great tips from Philip Mulyana above. With the Jago application, you can more practically make transactions and save according to your way, with the people closest to you.
The Jago application can be downloaded here for those who don't have it yet.
