“If you can not control your emotions, you can not
control your money”
–Warren Buffet.
I’ve read
books, attended workshop and talk show,
done my own little research and number crunching,
conversed with friends, I even passed Level 1 FRM some years ago after my MBA, yet my attitude toward money remained
stagnant, not going anywhere. It’s like money and I don’t relate; that it is just a complementary element of my life. Absolutely absurd
because on the other side, between hubby and me... it’s me who made plans a
lot, spent a lot, regret a lot. I always say planning is halfway to good life. I always make
excuses that the hike in our spending accounts was
also to meet other’s needs:
socials, gifts, emergencies, including unlikely-paid
receivables. So every once in a while (most probably during
tax report period), I whine again and again that we don’t manage it smartly.
The basics? That, I got the points:
- Don’t spend more than you earn (I knew it since I was about 7 yo when my allowance was practically zero Rupiah).
- Everything that doesn’t generate profit, go into “Liabilities” side (kitchenwares, shoes, wardrobes, gadgets, make ups I only used once in a blue moon).
- Keep the total debt at the max 35% of your take home pay.
- More investing, more zakat and infaq and less consuming (we invested more in “faith, happiness, books, experience”, we don’t let ourselves be materialistic animal :p).
- There is a factor called real inflation that will make me more likely than not to think over about sending my kid abroad for college (at first I thought about US colleges with their 35 grands tuition fee per year and other 25 grands for living cost. Then I fainted and woke up considering Europe which give more G-to-G scholarships, then Australia, and now maybe... Singapore won’t be a bad idea at all. I’ll say to Miss K: It’s near home, it has great universities and parks, and jogging paths, and it comes with multicultural aspects, right? But if you insist in going to dad’s university at Depok campus, we’ll welcome the idea as well).
- Unit link is no good, better to separate investment from insurance.
- The ads say, somehow, mutual funds will resolute all your financial planning problems...IN THE LONG TERM (that’s the keyword... if you invest wisely and long enough, you’ll get the result alright).
- We need emergency fund (a.k.a. idle money) about 6-9 times our monthly expenditures.
- How we plan to live as retirees with some grandchildren 20 years from now? Never too early thinking about our pension fund plans and our little K’s wedding funds, don’t we?
Those things linger in my mind in the last 5
years. But not really doing some real action with plausible strategy, except
opened traditional saving accounts for Miss K, took home-and-car refinancing,
and closed our unit links accounts to pay for our pilgrimage’s down payment. Good but not enough.
So
this time I try to think about people with financial success. And I mean real
people in my life, not Warren Buffet, not some celebrity mommies, not top business women, not someone I didn't know in person.
It’s not hard for me to
seek a real person with real result to look up to. I remember how my mother was
the “financial planner” in my family. My parent were both government employees
with low-to-moderate fix income so she managed it very carefully. No single
Rupiah went in and out without her consent. She was a natural treasurer that
kept the cash flow balance. My dad had little (if not no) power or bargain
in this matter. In her own quiet way, my mom set the vision for my family’s
financials and made sure my bro and I were well provided and supported for our
education.
When I told her about
school amenities and class activities that cost something, however pricey it
was for our financial condition, she always said, “Okay, we’ll keep that in mind. Don’t worry, we’ll settle them down in
time.” And we indeed settled them down just in time, including school
tuition et al for my cousins whom she believed would make a difference with
their own futures. When I asked something out of that primer lists, she would
say, “Let’s think it over in some more
time. See if we really need it.” Most of the time, the last kind of replies
would end up with nothing. If we kids didn’t talk about the dolls and toys and
other items that we asked anymore after some time, then probably they were not
important enough to be bought.
If we talked about
consumption with my mom, it meant good and healthy food (didn’t necessarily
come with variation, if you know the truth), education fee, decent yet minimalist
homewares and wardrobes, transportation costs, and some stocks for family gathering (I mean in-house gathering,
not so much on traveling idea, that’s why we didn’t travel often).
When she
talked about investment, she would talk about growing people of our extended family
to be financially independent through education and fostering approach, then
maybe sparing some money to acquire one or two property to prepare our
college fund. That was it, not much but enough. With that simple formula they afforded some
best extracurricular courses during our high schools (best English courses,
good basket ball club for me and best art prep school for my bro), sent us to good
private colleges in Bandung, and had my wedding party a bit more blasting than
I expected (aside from proudly dispatched
half dozen of cousins into their better and bright futures).
Our family was not
debt-free, though. When I was in primary school, early each month my parent
took us to visit a nice old lady who lived in a very big beautiful house in
Cipaganti area. We didn’t know who she was then since she was not family member.
All we knew was that she was okay. She always welcomed us with her big warm
smile and offered us cookies and candies. After some chit-chat, my dad usually
put down a white envelope in the table and pushed it toward her with a sentence
full of deep gratitude. It lasted over years. Now I know that the nice old lady
was their “godmother” who lent them some money to build our house when I was a
baby. Since then, they had paid back their mortgage religiously every month until
all was settled.
Then a new era came, we
never made monthly visit again to the old lady except for holiday. My mom
became the treasurer of the credit cooperative in her office and she was
keeping the log strictly to everyone, herself included. Some people came to our
house to borrowed some money from the cooperative. She never complained a thing
about this business but I could see –from the number of people who came
periodically to settle their payment compared to people who only came once to
pick up the money they borrowed– that some people were not as eager to pay the
debt as they were to get it. My mom burdened the default risk, but she smartly
made some connections with the HR manager of the foundation they were working
for, so my mom would short cut their monthly salaries after the “observation”
period was over. She used to say that she knew which people would turn into
success or failure by knowing their behavior toward debt/money. This stuck in
my head since she was seldom wrong about it.
So it’s time for me to
start because the right time is NOW. Better late than never. I get some help
from Prita Ghozie’s “Menjadi Cantik, Kaya, & Tetap Kaya”, Ligwina’s
“Membangun Masyarakat Indonesia yang Kuat”, and Panji + Diana Sandjaja’s “Make
Your Own Plan”. I followed articles from www.ngaturduit.com as well as Robert T. Kiyosaki and Suze Orman’s website. I read some cool
mamas’ blogs to flourish my financial literacy. I talked to some insurance
agents, marketing staff of investment firms and banks (I’m still amazed by how
little they know about the products they’re selling), a fin-planner wanna-be,
property developer, in laws, and close friends. I’m so excited by the
variability and possibility that I can make use of from their experience and
suggestions. For the time being, we decide to go on our own and not engage in
some formal and fee-based financial advisory.
We’ll thinking about term
insurance as protection since we are both the breadmakers of the family; also car
insurance since it was ended when the car loan was closed last year and there
is little chance that we could afford to let Miss Livi go in a short while. We
don’t plan to take anymore debt and wish to tap our credit card balance at
minimum since a lot (I mean almost all)
lists with the card resulted from dining out, shopping little this and that at
the malls, and other alluring life style spendings.
We’ll consider some from a
variety of investment baskets for us to put our fresh eggs in: gold, mutual
funds (seriously... this is the only hope
for us that Miss K would go abroad... except maybe we will ‘encourage’ her to
pursue some scholarships, haha), and maybe manage to get a small property
to generate income to cover the debt. We’ll figure out how to build our
emergency funds and construct our retirement “Decent yet humble life” plan later
on.
My target is that by the
end of 2014, we will have a sound financial plan for my family with a clear
policy and steps regarding debt (credit cards, employee loan, cooperatives
loan), investment, insurance, and consumption. I don’t think the LV tote I’ve
had an eye on for a long time will match into this financial plan (*sinking
heart*).
I also want to introduce my girl to the basic of the personal finance
(that the money doesn’t just come out of the ATM by itsef and the credit card can
be AWESOME as well as AWFUL). I will tell Miss K that our financials –i.e. how we
earn and spend– confirm our profiles, resemble our objectives and priorities in
life, and be evidence of how well we make our decisions, be it big or small.
I am so thrilled by this huge
project. Wish me luck to be a mommy who’s doing good with money!
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