How To Maintain Finance With A Pattern 40-30-20-10

Head of AAJI Insurance Literacy & Inclusion Department. (Photo: Doc. AAJI)

JAKARTA - Good financial planning needs to be implemented from an early age so that you can get used to controlling finances and be able to prepare protection for the future.

One of them is by applying the 40-30-20-10 pattern. As stated by the Head of the AAJI Insurance Literacy & Inclusion Department, Antony Japari, in his statement quoted on Sunday, February 27.

Antony shares cash flow management tips which are divided into four parts. The first 40 percent of income can be used for daily needs, including for food, clothing, transportation, credit, electricity, water and other needs.

Then 30 percent for productive installment needs, such as house and vehicle installments, then 20 percent for future needs which is divided into emergency funds, insurance and investment.

"The last 10 percent of course did not forget to be allocated for donations and helping other family members in need," he said.

Head of AAJI Student and Student Literacy, Cicilia Nina also added that the millennial generation needs to pay attention to a strong financial foundation. This foundation is divided into five parts, namely maintaining cash flow by checking the finances that have been issued or called financial checkups, then creating positive cash flows, and having savings for unexpected needs.

Second, the millennial generation needs to be prepared to face future risks, especially health risks, this can be prepared by having health insurance and life insurance.

"The third foundation, the millennial generation must be disciplined in financial spending by reducing the portion of debt as much as possible, and the last two foundations are preparing an emergency fund and having long-term financial planning with investments," said Cicilia.

Based on data from the 2019 OJK Financial Literacy and Inclusion National Survey, Indonesia's financial literacy index has only reached 38.03 percent and the financial inclusion index is 76.19 percent.

This figure is still considered relatively low. The percentage of insurance literacy in the financial literacy index also only shows 19.40 percent and the inclusion index percentage only reaches 13.15 percent. This makes AAJI strengthen its commitment to help improve financial literacy and insurance so that life insurance protection can be felt more broadly by the community.