Reevaluating Family Financial Plan

October 14, 2010

We recently committed to a very good habit, creating family financial plan and sticking to it :D. It's not like we didn't care about saving before, we always did, but we never put a lot of thought into which saving goes to what, which one is for paying kids' tuition, which one is the vacation fund and all that. We also didn't look closely into investment. So anyway we began to manage it carefully.

 - The first thing we did was to determine where we stood financially. 

 - We checked if we have any debts, we counted our assets, savings and calculated our expenses. 

 - We calculated our emergency fund (Ligwina said for a family of 2, the safe amount is 12 the times of our monthly expenses, though I think it's a bit conservative it's better to have more than less). 

- We calculated how much money is needed for the kids education, all the way to universities (of course we factor in the inflation and all). The numbers obviously turn out to be ugly, but it's an eye opener and at least it helps us to plan better. And if the number one on the priority list is checked, it'll give us a sense of accomplishment and ownership because we know we're gonna do with them. 

- After that, we jumped into investment and bought a few Reksadanas that we put on regular installment. We tried forex too. Financial plan, like business plan and other plan has to be reevaluated and revised as needed, especially when there is a change in the income, be it an addition or a reduction. Or maybe there is change in plan because you no longer want that big house in Menteng and want to buy a property in Bali instead..:D..or maybe wanting to add a Hajj fund or something. 

Tonight, I'm revising our family financial plan because there's quite a few of things going on. First, Oki just recently received a job offer that will give a pretty little boost of income. But, like what almost happen in everyone, when there's an increase in income, there's usually an increase in the expense too somewhere. Since his office is going to be in Kebon Jeruk area, there's no way we can only use one car. Another car is needed and thankfully it is partially supported by the company. But there still be addition to our monthly expenses like for gas, car insurance and then the yearly expenses like tax and stuff. We also recalculated the school tuition because we want to put the kids into a better school and that school obviously has twice price tag than the other one. But we figure it doesn't hurt to try, if we don't end up achieving it at least we have enough for the second pick. It's always better to fall short from an A++ plan that it is to accomplish a B plan, right?

For universities, our plan is based on the US universities, so the kids can pay resident's fee and maybe apply for a financial aid when needed :D. For this one, I'm not sure if we should invest in IDR or USD. I think I'm just gonna save in USD. You know what's mindboggling? For Jehan 4 year university in Kansas University (excluding the living cost) is only going to cost 1/4 of her 3 year of high school. That's how crazily expensive good schools are in this town. So yep, this is what I'm gonna do tonight. 

Well I'm halfway done actually, total for Jibran elementary - universities is IDR 4,000,000,000. Jehan is gonna be more expensive because the inflation will be higher. Oh I'm so having fun with numbers, can't you tell? :D. And I'm pretty sure once I have calculated everything, the number we can invest every month will not be enough for all of these tuition fee. If that's the case, I'm sticking to the previous school :D

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