Young People Need to Manage Their Finances

FARID BAGASKARA

Hundreds of young people came to the Joyland Festival at GBK, Jakarta, on Saturday (5/11/2022).

JAKARTA, KOMPAS — Financial arrangements are increasingly needed for young people nowadays. In fact, not many young people have planned their yearend holidays. They mostly focus on saving and investing. Even if they decide to take a vacation, the funds have been prepared for a long time.

Financial expert, Greget Kalla Buana, when contacted on Tuesday (27/12/2022), agreed on the importance of managing finances for young people and the public in general. The expected economic slowdown next year should be well anticipated by properly managing their finances.

According to him, it is important to apply the spirit of “starting with why”. These three words, he said, must be instilled in the mind so that spending habits are not reckless. This mindset can also help one manage finances better, because one is able to distinguish between needs and wishes.

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“If you get a raise or bonus, do not immediately improve your lifestyle, but instead save and invest. This is what I practice. Unfortunately, nowadays, when people get a raise, their lifestyle also goes up so that they can follow the trend. In the end it looks as if nothing has changed," he said.

For example, some like to follow the yearend vacation trend. Some people choose to use their credit card to pay for tickets and accommodation. For example, Paskah Widarani (32) used a credit card to pay for her yearend holiday to Yogyakarta for five days. Even though she used a credit card, Wida acknowledged that she had to think about the installment.

"Weekend holidays are usually spontaneous, because it depends on workload. If the trip is more than three days, the budget for the trip should be planned properly," said Wida.

KOMPAS/RADITYA HELABUMI

The audience, mostly young people, enjoyed music at the Joyland Festival 2022 at the Gelora Bung Karno Softball Stadium, Jakarta, Friday (4/11/2022).

Dominika Sintia (26) often uses a paylater application to buy tickets and book accommodation. The total bill could amount to between Rp 1 million (US$64) and Rp 2 million. "In the past, I activated the paylater to buy tickets, especially when I hadn't been paid. I activated the paylater so I could go to my home town, but I paid it after the payday," said Sintia.

However, recently Sintia has chosen to break away from this borrowing habit. As using this payment method was easy, it put her in a lot of debt.

Planning

Based on the results of a Kompas R&D survey conducted on 13-15 December, most young people are aware of the importance of living frugally.

As many as 41 percent of respondents aged 17-23 did not have any plan to take a vacation. Likewise, for the 24-39 age group, up to 58 percent did not have any plan for vacation at the end of the year.

The respondents who planned their vacation were mostly those who intended to spend their holiday abroad. They prepared the funds for the trip in the range of between Rp 3.1 million to Rp 5 million.

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This relatively low spending was possible because all the bookings had been made in advance. Yupita Jevanska (26) chose to save in advance according to financial rules, namely 30 percent for saving and 20 percent for fun, which includes holidays.

Thanks to her savings, she could even pay her own trips to Bali and Thailand. Historical tourism is her main interest, not shopping and culinary. Of course, she stayed in a hostel and used public transportation.

According to Greget, such habits must also be followed by other young people in order to achieve goals with good financial management. “Money is a means to meet our needs. We need budgeting and planning as well as increased financial literacy. If you understand it, financial behavior will be more controlled so that it can be more efficient and used according to our needs, not our wishes," said Greget.

This article was translated by Hendarsyah Tarmizi.