Finance Management During Hard Times

It is undeniable that the Covid-19 outbreak greatly affected the finance management of many people. With the ‘new normal’, the current condition forces everyone to reorganize their finance management to survive amid hard times.

Finance management during a pandemic is a big challenge for anyone. To delve more into this topic, CoHive held an insightful discussion through CoLearn Online, titled “Balancing Worship & Finance Management during Ramadhan.” Inviting Dima Djani, the CEO and Co-Founder of ALAMI Sharia, an Islamic fintech company engaged in the P2P (peer-to-peer) field. This dialogue moderated by Indah Rahdiani (Senior Event Management Associate CoHive). Some interesting points can be learned from this webinar about financial management.

  • Understand the basics of financial management

In managing finance, two things need to be comprehended; there are, income and expenses. Due to the Covid-19 outbreak, the profits from various employment sectors will undoubtedly be decreasing, both active or passive income. Active income categorized as salaries and dividends for people in the business. Meanwhile, passive income is divided into shares, bonds, and P2P (peer-to-peer). Declining income results in reduced ability to spend, because people will tend to prioritize their primary needs above the rest.

There are three major types of expenses that people need to know, necessities, wants, and savings. Reflecting on the current situation, we may find many people removing the second category from their expenses. However, it is not a wise step to make. According to Dima, avoiding your wants to skimp your costs will impact make someone get burned out more quickly than before. Thus, to keep the expenses be on the right track, Dima comes with an expenditure scheme, which are necessities (65%), wants (5%), and savings (30%). By doing so, people can focus on their primary needs but still fulfilling their wants in the right amount. This percentage can certainly change, according to the economic conditions of each.

  • Allocate income for personal interest

Furthermore, Dima divides the purpose of money allocation into two groups, private and public. Investing in yourself has a massive ROI (return on investment) value because it can provide the necessary knowledge and expertise needed in the future. On the other hand, the personal investment made by increasing self-productivity at home. For instance, establishing an office space for working from home.

Apart from that, you can allocate the income to take online courses, share assets, and conduct funding through P2P lending (peer-to-peer). Dima makes ALAMI Sharia an example of a P2P platform for financing with a secure system, following Islamic law and transparent.

Read: Jakarta’s Large Scale Collaboration to Fight Covid-19’s Economic Impact

  • Allocate income for public interest

As for the public interest, the funds may allocate by opening a new venture and making a charity. Dima explained that there are many differences of opinion regarding the benefits that can be received by doing a charity. However, Dima believes that charity has a very high-profit value as it can give back to many people in need.

To date, there is no certainty when will this pandemic meets its end. Therefore, it is strongly recommended to prioritize financial arrangements and a good system of fund allocation.

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