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PERSONAL FINANCE
INTRODUCTION

Puput Tri Komalasari, CFP

Fakultas Ekonomi dan Bisnis Universitas Airlangga

The greatest of evils and the worst of crimes is poverty...our first duty-a duty to which every other consideration should be sacrificed...is not to be poor

-George Bernard Shaw

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everything is uncertain and that there is nothing but uncertainty, is uncertain, too There is an age old saying that there are only two certainties in life, one is taxes, the other is death. In life, as in investing, accepting uncertainty and growing beyond it is something we all need to do. If it werent, no child would walk, no one would learn to drive, and there will be no businesses providing goods and services essential to our survival, needs and wants.

Data 100 orang diusia 65 tahun

Kaya Mandiri secara keuangan Masih harus bekerja Meninggal dunia Hidup tergantung pada orang lain

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BAGAIMANA GAYA HIDUP ANDA ?

DSSA Biokos

>1,5jt

Biokos, Dermacos

1jt1,5jt

Belia, Cempaka, Mirabela

500rb1jt

Marta Tilaar Group

< 500rb

Demographic market segmentation

< 500rb

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FINANCIAL PRESSSO TERRIBLE

PRODUKTIVITAS VS USIA

Penghasilan

Mobil

Deposito

Risiko Risiko: 1. Disability 2. Die too soon 3. Critical illness 4. Live too long

Rumah

Usia 22th Usia Produktif

Usia 55th

Usia 65th Usia Pensiun

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Tanggungjawab Pencari Nafkah

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Personal financial planning is important because it helps individuals to achieve financial independence. There is a trend to increased self-reliance.
Many employers are requiring that employees plan and

manage their own retirement accounts. Traditional pension plans are less common today.

There is greater economic uncertainty associated with job stability and investments. Therefore, financial planning is increasingly important.
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Helps you achieve goals and objectives Reduces fear, anxiety, and frustration Helps you honor God

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Many people study personal finance in order to achieve financial success. Financial success may not have the same meaning to everyone.

Some people think financial success is

accumulating a lot of money. Some people may define financial success by their ability to purchase goods and services.

In this course, financial success is defined as obtaining the maximum benefits from limited financial resources.
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Nellie Mae reports that the percentage of students with credit cards rose from 67% in 1998 to 78% in 2001. The average college student carries a credit card debt of $2,748 (Nellie Mae) According to the National Foundation for Credit Counseling, the number of Americans entering debt management programs has risen sharply over the last ten years.

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1. 2. 3.

How to Balance a Checkbook How to Read a Credit Report The Difference Between a Credit Card and a Debit Card

4. 5.

Ways to Save Money

How to Create a Monthly Budget

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When you go grocery shopping do you?

a) Create a list and stick to the items on that list? b) Go down the aisles and grab what you like?

When eating out do you?

a) Split an appetizer, order the most reasonable b) Order something from each menu item

entre, drink water and skip dessert? drinks, appetizer, entre, etc?

When going out on the weekend do you?

a) Pick up the tab for your friends? b) Split everything right down the middle?

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Nonfinancial goals
goals.

Family, children, education, religious, social, etc. Finances can affect your ability to attain these Financial independence is an important goal for

Financial goals

many people. Financial independence is defined as having enough income or resources to be selfreliant. One of the financial choices that we make is between consumption today versus consumption in the future. Researchers have found that most people, regardless of their income level, feel that they need 20% more wealth than they currently have.
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Economists suggest that satisfaction from current consumption increases but at a decreasing rate. Stated simply, people enjoy their current purchases but as they purchase more and more, their satisfaction decreases.
For example, the enjoyment that an individual experiences

with the purchase of their first DVD is greater than the enjoyment that the individual experiences upon the purchase of their 100th DVD.

At a certain income level, this explains why individuals are willing to postpone current consumption and save money. Saving money facilitates the attainment of financial and nonfinancial goals.
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The economic environment affects our ability to achieve our financial goals. Continuing Inflation
Price levels over the long-run tend to increase 13%

annually. Inflation must be considered in financial goals.

Persistent Business Cycles

Instability in the economy creates uncertainty that must

be considered in financial goals (job stability, emergency reserves, etc.).

Continued Instability in Financial Markets A High and Selectively Rewarding Tax System
The tax system rewards and punishes certain behaviors.

We will review these in greater detail in Chapter 4.

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Planning is the key to achieving all goals especially financial goals. Life-cycle planning is the phrase that suggests that financial planning is a lifelong process.
People experience different phases in their life such

as career development and family formation, retirement, etc.

Major financial planning areas

The different phases of life impact the importance

of the various components of financial planning. At different phases, different financial planning areas increase or decrease in importance.
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Financial planning is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a home, saving for your childs education or planning for retirement.

Consumption and Savings Planning Debt Planning Insurance Planning Investment Planning Retirement Planning Estate Planning Income Tax Planning Career Planning

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Life-Cycle Phases Young adult (1825) Family formation (2635)

Financial Planning Areas Consumption and savings; career Consumption and savings; career; debt; insurance; income taxes Investment; retirement; income taxes Investment; retirement; estate Estate; income taxes
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Family development (36 49) Family maturity (5060) Retirement (60?)

Decision making is a complex process because there are usually multiple choices with differing attributes. There are two economic concepts that are helpful in financial decision making.
1 Marginal Analysisinvolves the analysis of the changes in

important variables

Example: choosing between a public and private university; the public university costs $15,000 per year whereas the private university costs $40,000 per year. Does the private university provide benefits that compensate for the additional $25,000 ($40,000$15,000)? 2 Opportunity Coststhe benefits given up when one

alternative is chosen over another Example: putting money in a savings account rather than investing in the stock market. The opportunity cost is the higher return that could potentially be earned in the stock market.

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First, build a supporting foundation.

Give time and attention to building a career, buying adequate insurance, buying a house, and building cash reserves

Then invest in secure investments.

Long-term savings deposits, government

securities, and annuities

Gradually take greater risks.

High quality stocks and bonds, real estate

Avoid very risky investments until you are secure at the lower levels.
Growth stocks, gold, undeveloped land
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A financial planner is a professional who helps clients create, maintain, and execute a financial plan. The best known credentials are the CFP. Whether or not you need to hire a financial planner depends on the answers to the following questions:
How much time are you willing to spend managing your How complex is your financial situation? How much do you know about each of the aspects of

finances?

Depending on your answers to the questions stated above, you may need to hire a financial planner to assist you with all or part of your financial management.
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financial planning?

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The 2001 Jobs Rated Almanac's choice of financial planner as the number one career in America has awakened people to the benefits of this rapidly growing profession.

FINANCIAL PLANNING PROCESS

1. Establishing and defining the clientplanner relationship

6. Monitoring the financial planning recommendations.

2. Gathering client data, including goals.

5. Implementing the financial planning recommendations. 4. Developing and presenting financial planning recommendations and/or alternatives

3. Analyzing and evaluating your financial status

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In Indonesia:
Certified Financial Planner (CFP) Chartered Financial Consultant (ChFC) Registered Financial Planner - Indonesia (RFP - Indonesia), issued by FPAIndonesia

FPA Indonesia is a membership Association for professionals in financial services in Indonesia. FPA Indonesia is non-profit and independent.

The public is looking for a planner who has demonstrated a commitment to competency, and financial professionals want an established certification that sets them apart in a globally expanding financial planning profession As a CERTIFIED FINANCIAL PLANNER practitioner, you can energize or revitalize your career, whether as an entrepreneur or in a large firm, by leveraging the knowledge and prestige associated with the world's most recognized financial planning certification. You will be equipped to provide truly personalized services to clients and maintain high levels of financial planning professionalism and expertise.

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Your Expertise and Credibility as a Financial Planner is Instantly Communicated. Your Career and Professional Development Opportunities Are Enhanced You Become a Coach and a Problem Solver Your Clients Are More Satisfied Your Earnings Reflect Your Personal Status You Have Tested Yourself Against the Best, and Met the Challenge.

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