Healthy finances is something that can be realized and enjoyed by everyone. To achieve healthy finances, there are many ways. One of them is by setting financial boundaries. What are financial boundaries and how do you set them?
Financial Boundaries for Healthy Finances
Boundaries are the limits we set for our own good. In life, for example, there are people who limit themselves from consuming excess sugar to maintain health. When it comes to finances, there are also boundaries that can be set. The main goal is to realize healthy finances.
Although the main goal is financial health, setting financial boundaries has many benefits. Financial boundaries help protect money. Because, only you can protect your own money, no one else.
With certain boundaries, money is no longer used carelessly, but has a clear purpose for use. When money is used properly, you prioritize your needs and financial health as well as mental health.
How to Set Financial Boundaries
1. Set clear financial goals
First, you need to set clear financial goals. What do you want to achieve in the next 1 year? What about the next 5 and 10 years?
The financial goals must be clear. So, if for example you say you want to start saving, but you stop there, this isn't clear enough.
If you want to start saving for retirement, you need to have an idea of what you will do after you retire. Do you want to just live a comfortable life while taking care of the grandchildren? Do you want to start traveling the world? The first and second objectives of course require different amounts of funds.
After that, you can calculate how much you will need once you retire. From there, you can calculate how much you have to save every month so that when you retire, there will be enough funds.
Likewise when you want to have your own house. When would you like to be able to buy a house? Is it in 10 years? What kind of house would you like to buy? In which area is the house located? You also need to consider several other factors when it comes to buying a house. Find out the price of your dream house and then calculate how much money you need to set aside every month so that in the next 10 years, your dream can come true.
2. Make a budget, prioritize needs and financial goals
Now, it is clear about the financial goals to achieve. So that all financial goals can be realized, real action is needed. Next, you can make a budget.
Of course, you first need to prioritize needs such as paying monthly bills and buying daily necessities. Then, after you have allocated the budget for each need, you can allocate the remaining budget for financial goals.
It is also important to prioritize financial goals over wants that are more likely related to indulgence and entertainment. But, that doesn't mean you can't have fun and enjoy life. You can still enjoy self-reward, but the frequency can be reduced.
This is what is meant by financial boundaries. You set boundaries and realize what is more important and needs to be prioritized. Only with this awareness can you achieve healthy finances.
3. Be assertive and communicate clearly when needed
In order for the boundaries you have set to work as they should, you must be firm and communicate clearly when needed.
For example, a friend chooses a fairly expensive restaurant for eating out. But, when it’s time to pay the bill, they suggest splitting the bill evenly. In fact, because you have set boundaries, you only order a drink and a dessert.
Previously, you didn't have a problem with splitting bills. However, not this time and not next week because you have financial goals to achieve. This is a situation where you have to be firm and communicate why you don't agree on splitting the bill.
At first, you may feel bad for them. However, a firm attitude and communication help you follow the financial boundaries.
Manage Finances Using the Jago Application, Easy and Practical
Jagoans, are you ready to set financial boundaries to enjoy healthy finances? You can use the Jago application to help you manage your finances.
Want to separate needs and financial goals as well as budgeting? You can use the Spending Pocket and Saving Pocket features. For 3 financial goals you can create 3 Saving Pockets. Have more financial goals? You can create more Saving Pockets.
Want to monitor expenses to make sure they stay within the budget? Every transaction through the Jago application and the Jago Visa Debit Card will be automatically recorded and you can monitor it at any time.
Want to see the total decrease or increase in spending (also by spending category) between the current and previous months? You can take advantage of the Spend Analysis feature.
There are many more features that you can enjoy after creating a Jago account. For recurring and timely payments you can use the Plan Ahead feature. For automatic savings you can use the Autosave feature.
What are you waiting for? The Jago application can be downloaded here for those who don't have it yet.