It is undeniable that managing money through financial planning or implementing financial planning for those of us who are part of millennials and Gen-Z is an important thing. The rising cost of living is one reason that makes sense. 

Especially when the COVID-19 pandemic entered Indonesia in early 2020, which touched almost all aspects of life; of course, this also affected everyone's finances, including millennials. This is also in line with what is stated in the presentation of the survey results by the Financial Services Authority (OJK); the millennial generation aged 25-44 years is the generation with the most financial impact. 

Of course, to address this, we need to understand how financial planning is. Here we present the entire presentation!

Is it Financial Planning 

Financial planning can be interpreted as a planned financial management process to achieve one's life goals. The purpose of one's life must be different. Some want controlled living expenses or want to achieve financial freedom in the future. 

Reporting from Schwab, eight components must be included in financial planning. They are goals, wealth reports, budget and cash flow plans, debt management plans, retirement plans, emergency funds, allocations to insurance, and inheritance plans. 

So, what is the importance of financial planning?

Let's imagine if, at this time, we spend money without doing reasonable control. Impulsive buying, wasteful, prioritizing wants over needs, and not being wise with the money that comes out every day will hurt your finances, and of course, there will be no precise future planning. 

The role of financial planning is what will help you to put the brakes on it all. Because again, of course, we all have a life goal that we dream of. You can consciously consider any expenses that impact the initial plan by implementing financial planning. 

3 Ways to Make Financial Planning

1. Seeing and evaluating the financial condition

The first step that must be done is to see the personal financial condition. Because the finances of each individual will be different depending on the conditions they experience, people who are married to people who are still single certainly have different needs, as well as people who only finance their own lives with people who participate in family finances will have other conditions. 

Next, calculate the postal income each month you receive, and see how much expenses were spent in the previous month. If there are no urgent expenses, you should evaluate them, so they don't happen in the future. 

2. Setting financial goals Financial

Goals can be short or long term. For example, if you want to buy a laptop, you can determine how much money will be set aside to achieve short-term goals. 

In practice, you can apply various methods of allocating money. One of them is the 50/30/20 formula method created by Elizabeth Warren. 

The distribution includes: 50% of the income is set aside as operational costs, such as food costs, transportation, daily necessities, and electricity or water costs. Then, 30% fulfil other desires, such as instalments, paying insurance, entertainment, or self-reward. 20% of it is used for savings, emergency funds, and investments.

3. Review your finances regularly

After you make the posts, don't forget to record your expenses each day. Now there are also several applications that you can use to help with record-keeping by the budgeting plan that has been made. If so, see if there is overbudgeting or not. If so, you should adjust as needed in the following month. 

So, for more details, you can watch a video discussing financial planning for people in their 20s on the BNI Life YouTube Channel with Jonathan End, guided by Iyas Lawrence below.

BNI Life Corner | Ep.1 Jonathan End: 4 Tips for Financial Planning in Your 20s

Complete Financial Planning with BNI Life Plan Multi Protection Plus

Yep, as mentioned above, one of the components that must be included in financial planning is insurance allocation. Because one of the benefits of this insurance will be protection for yourself if you are faced with the risk of a health condition one day. One of the insurances you can choose is the BLPM Plus product from BNI Life. This unit-link-based life insurance will provide two benefits, namely death and investment benefits.

As the saying goes, prepare an umbrella before it rains, and register yourself as early as possible with insurance from BNI Life Plan Multi-Protection Plus! Premiums start from IDR 200,000; check now!