5 Steps to Begin Your Financial Planning Now
“If you fail to plan, you plan to fail.”
That is what Donny Justin, founder of financial blog pundireceh.com and financial education enthusiast, said during NGUPAS, a webinar for teachers presented by ruangpengajar.
He added that it is important that we plan out our finances. That way, we can learn to be discipline and to evaluate the stability of our financial condition. Additionally, with financial planning, we can envision our own financial goals, and this is true for anyone in any profession.
During NGUPAS, Justin shared that financial planning is the evaluation of your current financial condition and the planning to achieve your financial goals.
Justin emphasized that we can do our own financial planning. In fact, kids, at such a young age, sometimes are already responsible for their own financial planning, like managing their allowances so they can save money and buy their favorite toys. That said, of course teachers can plan their finances on their own. It’s just that as we grow older, the more complex the finances become; there are liabilities, investments, insurance, and so on.
Lucky for teachers who joined NGUPAS, Justin shared with them several mandatory and actionable steps to create a financial plan:
1. Check the following items and determine your financial health:
a. Total assets vs liability
b. Existence of health and life insurance
c. Risk level of losing income
d. How many people are financially dependent on you (including parents, wife, and children).
2. Create your own target
a. Short, mid, and long-term targets.
b. Create a backup plan.
3. Create a plan
a. Come up with a monthly budget.
b. Add your earning power, may be a side job or create your own business.
4. Execute, and always remember your targets!
5. Evaluate! Remember to check periodically, maybe once every six months.
Justin also advised that before you implement your long-term financial planning, it is better if you start executing your short-term plans. Starting from cash flow, income, expenses, liabilities, emergency fund, and insurance management. Remember to continue making the mid-term and long-term plans as well.
In the webinar, Justin gave teacher-specific items that might go on their financial plan. Justin suggest that for ruangles teachers, who teach face to face, they can put into transportation expenses into their plan. On the other hand, for ruanglesonline and ruangbelajar Plus teachers who teach only, they can put gadget expenses into their plan, such as purchasing smart phones, laptops, and others.
For mid-term planning needs, maybe one can plan for postgraduate costs and marriage costs. For long-term planning, maybe start budgeting expenses to buy a house.
Once we make a plan, we need to trace them, Justin added, and here are his tips on how we can do so with a little help from Microsoft Excel:
1. Categorize and record expenses everyday
2. Create a graph every month. This will help you easily trace which kind of expenses should you reduce the following month.
3. Gradually adjust and minimize your expenses. That way you can transition to more efficient monthly expenses.
4. Arrange financial priorities by determining your wants and needs.
5. Check and recheck. Look for substitute goods with better specifications based on your preference.
Justin further suggested that creating a contingency plan is crucial. Here are 3 ways we can prepare a Plan B, in case our first plan doesn’t go smoothly:
1. Emergency fund: avoiding financial risks from as illness, urgent needs, and job loss.
It is important to remember that the amount of funds you should save for an emergency fund is equal to your total expenses for 6–12 months. You can save emergency funds in high-liquid and low-risk investment instruments, such as fixed deposits, government bonds, and money market funds.
2. Insurance: avoiding the risk of dying at a young age and hospital admission fees, since we don’t know exactly how much the fees will be charged if you have health insurance.
3. Testamentary: avoiding the risk of sudden death
At the untimely death of a loved one, their assets are scrambled in court, during which the assets are frozen and families could experience difficulties liquidating those assets to support their daily needs
All in all, Justin concludes that there is no better word than start, and that is true with finances.
Now that you know financial planning starts from ourselves, let’s try to make a short term plan and achieve your financial goals!
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We hope you learned new insights from this article about NGUPAS, a webinar series specifically designed to equip teachers for the challenges of today and tomorrow.
If you are interested to be a part of the community and passionate about teaching, register yourself or your colleagues and friends in ruangpengajar by Ruangguru!
