Indonesia, 31 Oct 2024 - Managing finances is not an easy task, whether its your personal finances or your family finances. This is especially true in Indonesia where the " sandwichgeneration ” phenomenon is prevalent. The term is given to a generation that has to support three generations at the same time, namely their parents, themselves, and their children (or younger siblings).Kadin Indonesia ’s data that shows that in 2023, there were 66 million micro, small and medium enterprises (MSMEs) in Indonesia. These MSMEs contributed 61 percent to Indonesia's gross domestic product (GDP).1. Analyse the current financial condition of yourself and your family Who says members of the sandwich generation can't run their own business? With consistent and detailed financial planning, it's not impossible that we can also grow our business! However, before you make financial and business plans, it is important to understand the financial condition of yourself and your family down to the smallest detail. You can start by recording all income and expenses, identifying sources of debt, to calculating your debt-to-income ratio. With this comprehensive understanding, you can make better financial decisions and plan your business more realistically. debt to income ratio formula. First, add up all of your monthly debt payments, then divided the sum by your gross monthly income. Lastly, multiply by 100 percent. Ideally, the debt to income ratio should be below 35 percent, indicating a healthy financial condition and making it easier for you to apply for a loan/credit/ installment from the bank. While a ratio of 36-49 percent is still acceptable, you need to stick to your strict budget and be more disciplined with your expenses. If your debt-to-income ratio has reached 50 percent or more, you should consider ways to increase your income or reduce debt before starting a business!
2. Create and monitor a financial plan Once you get a complete understanding of your financial condition and your family’s finances, it is important to create a financial plan and monitor the plan to achieve your financial goals. The SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) method is one simple way to set effective and measurable financial goals.3. Separate your business and personal finances One of the crucial steps to take when starting a business is to separate your business and personal finances, including by using two different accounts. This way, you can prepare your financial statements for the two accounts more neatly, facilitate financial evaluations that will help you make decisions, and facilitate tax calculations.4. Difficult but necessary: set boundaries with family When dealing with family and loved ones, your first instinct might be to help them as much as you can. Mutual assistance and helping each other is important, but setting boundaries is equally important!Family Financial Planning ” published by the OJK recommends that you allocate a maximum of 40 percent of your salary for household needs and 10 percent for children and education, or 50 percent of the salary for household needs. This is to ensure that you still have enough funds to prepare for the future, whether for your personal or business needs.5. Continue to develop your financial management skills As your business grows, you need to be wiser in managing your business finances. To keep multiplying your profits, you must continue to enrich yourself with knowledge such as budgeting, debt and asset management, investment strategies, and determining your priorities. Attending classes or seminars is one way to continue to hone your growth mindset and present interesting ways to align personal, family, and business financial goals. You will also learn to set up emergency funds for your family, children's education, and allocate funds for self-rewards to reduce financial stress and conflict. opportunity as they allow you to meet other MSME players, exchange insights, provide mutual support, and even work together in the future.Mona Monika said, “Financial literacy and inclusion are important aspects of national economic development. We also believe that financial literacy should start from our immediate environment, namely ourselves and our families, before expanding to a wider scope such as the businesses we build and society. Therefore, with the ' spark' or passion to support a more inclusive Indonesian financial ecosystem and assist people in planning their finances for a prosperous future, Bank DBS Indonesia also supports the government's efforts throughout the Financial Inclusion Month (BIK) 2024 through various activities. All these efforts are in line with Bank DBS Indonesia's third sustainability pillar, Impact Beyond Banking, in line with our vision to be the 'Best Bank for a Better World'.”[END] About DBS DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.“World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 16 consecutive years from 2009 to 2024.PT Bank DBS Indonesia is licensed and supervised by The Indonesian Financial Services Authority (OJK), and an insured member of Indonesia Deposit Insurance Corporation (LPS).www.dbs.com.
