How to manage household finances that you can practice

How to manage household finances correctly? Managing household finances is not a difficult thing if you know an easy way to execute it. The following is a guide on how to manage your household finances.

Why is it important to manage household finances?

As you know, household finances are very important. There is a study which shows that 24% of the causes of divorce in Indonesia are caused by financial problems. Honestly, this number is not a good number, because financial problems in the family can be avoided (even eliminated) if you know how to manage household finances properly.

You both have probably read and heard tips on how to manage household finances from the Finansialku.com website (or maybe other websites). I am Melvin Mumpuni CFP®, as a financial planner at Finansialku.com I see the problem is not what to do. The problems you and your partner are facing are

How to run it?
How to execute it?

before reading this article any further, I suggest: share this article with your partner.

Why should it be shared?


Because you and your partner are the main figures in family finances. It is important for both of you to know how to manage household finances.

Before discussing further how to manage household finances, I would like to know your comments or opinions:

What financial problems have been a source of fuss with your partner? What lessons did you learn from this incident?




I really appreciate and thank you for your time and willingness to leave your comments.

Noise in the Household, because of Financial Problems?
According to my experience as a financial planner, household financial problems occur due to several things:

Not consistent with shared commitment
Don't know what's right and what's wrong
Ineffective in communicating with partner


I will discuss one by one:

#1 Not Consistent with Shared Commitments
Have you both ever had a hard time holding back your cravings for a while? For example, an impulsive (sudden) desire to buy clothes, gadgets, smartphones, luxury items?

Many people are entangled in consumer debt or negative financial conditions, just because they have difficulty stopping their lust for a moment.

This is natural, because many people find it difficult to resist receiving “consolation” or “temporary gratification”. There is a research known as the marshmallow experiment about temporarily delaying gratification. What would you do if you were invited to join the marshmallow experiment? Can you temporarily postpone gratuities?

Marshmallow Experiment – Delayed Gratification
There is a scientific research conducted by Professor Walter Mischel from Stanford University. They observe or examine children's reactions to temporary gratifications. The way the experiment works is:

A child is left alone in a room and in front of him is a marshmallow.
The instructor explained that if the child could resist the temptation not to eat the marshmallow within 5 minutes, then the child would get more marshmallows.
How do you think the children will react to this challenge? Will the kids eat the marshmallows or will it last 5 minutes?

#2 Don't Know What's Right and Wrong
The second challenge or the second problem faced by every couple in managing household finances is not knowing what is right and what is wrong. Example:

The sentence set aside money to be saved and invested. What's wrong with that sentence? In English known as pay yourself first (pay yourself first). Many people have difficulty putting aside. Now try to start prioritizing your income to invest and save. Prioritizing means that you prioritize spending on investment before other expenses.
Were you taught by your parents: “Don't Go into Debt”? If yes, then you must know many entrepreneurs and people who got rich because of debt. The debt in question is productive debt, not consumer debt.
And so forth.

There are 6 points you should know about finances. I will explain in more detail about these important points, on another occasion:

Financial security: budget, financial records, cash flow, emergency funds and insurance.
Financial convenience and financial planning.
There are three sources of income and each taxation is different.
In the past: Income must be greater than expenditure. Now: Just spend your paycheck.
Saving is not enough, you have to invest.
Recognize the difference between assets (assets) and debts (liabilities).



What can I suggest to you?


So that you can know what is right and what is wrong in terms of how to manage household finances, you must improve financial literacy.

#3 Ineffective in Communicating with Your Partner
The last problem is ineffective communication with partners, especially regarding household finances. This communication problem occurs because you and your partner are not on the same page or at the same time. How can you communicate with your partner about household finances?

If you and your spouse and children are united in managing finances, then your family will be much more prosperous, peaceful and able to achieve financial freedom.

6 Ways to Manage Household Finances that You Need to Practice


  1. Have a budget and financial records (with the right priorities of course).
  2. Have an emergency fund, according to your needs.
  3. Pay off consumer debts and don't add new consumer debts.
  4. Buy insurance as needed, both in number and type.
  5. Have a financial plan, especially for medium and long term expenses.
  6. Increase both your knowledge of finance.

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