3 Smart Ways to Manage Family Finance with a Democratic System

At the end of June 2018, Indonesia had just celebrated a democratic party at the Regional Head level. How come? The General Election Commission (KPU) even set the 27 June 2018 as the day of the regional head election for 171 regions in Indonesia.

This democratic party should be a reflection for each of us to practice it in our daily activities, including in managing family finances. Why, what is the connection between a democratic party and family finances?

 

Definition of Democracy

Former US President Abraham Lincoln once revealed that democracy means the government of the people, by the people, for the people. This means that each individual has a similar role in the sustainability of a country. Everyone has the same rights and obligations, and rights and obligations must be carried out in tandem. In addition, because individuals in a democratic system have an equally important role, each individual has the right to channel his opinion in the sustainability of the country. Another distinctive feature of democracy is the existence of transparency or openness to everything that happens in a country, and every individual can access information that is entitled to be known. In short, the democratic system is often concluded as a free, but responsible system.

 

Smart Managing Family Finance with a Democratic System

Smart Managing Family Finance with a Democratic System

After briefly knowing what the definition of democracy is, let’s start trying to apply it to family finance. Sounds weird? What if we try to examine one by one first of each component contained in the definition of democracy.

 

Have the same rights and obligations

Although at this time you and your partner both provide a source of income for the family’s cash flow, it is better that both parties share the same portion in managing expenses and family savings. Give the same portion in making financial decisions so that management is easier. It’s good if a husband and wife open a joint savings account for financial flows in the family.

Remember both you and your partner have the same portion in making decisions for financial affairs, meaning that both you and your partner must also learn to respect their will. For example, your partner has a particular hobby that requires a certain amount of money. Given you and your partner have the same rights, meaning you also have to respect the decision. Of course these expenses also cannot be done arbitrarily, your partner should explain in detail what the money is used for and calculate whether you and your partner make it possible to spend money in supporting the hobby.

 

Free to express opinions

Free to express opinions

When you want to apply the smart way to manage family finances with a democratic system, you can also practice freedom in expressing opinions. You and your partner have the same rights regarding what items they want to buy and which are not necessary. If you and your partner already have children who are teenagers, there is no harm in trying to involve them in decision making in family finances. Of course, getting involved in things that are more crucial isn’t it. For example, you and your partner want to buy a family car, let the children contribute their opinions. Let them know how much budget you have and what needs are mainly from the car you want to buy. By involving children, usually they can feel more valued and indirectly know the mindset needed when making a decision to buy an item.

 

Transparency

Transparency

Smart managing family finances with a democratic system can also be applied with transparency. That is, both you and your partner should be open to every expenditure that is made every month. This honest and open nature certainly can be applied when you and your partner plan to apply for credit in any form.

Not to mention if one of you has a financial problem concerning the family’s financial condition, of course openness will be very necessary. In addition to functioning to strengthen the family’s financial foundation that must continue to be honest with each other, accumulating personal financial problems that have an impact on family finances only makes matters worse. When one of the couples is entangled in a debt, for example, there will usually be a tendency to keep the debt problem against the couple secret. Even though it is constantly closed and keeping a crucial problem like this, debt will accumulate more debt and it is increasingly difficult to overcome it because it is too afraid to try to be transparent to partners. If only it were more open, it was not impossible that the couple would help you in overcoming financial problems so that you were freed faster from debt.

Cultivating the habit of being free to take responsibility for transparency is actually also useful for a child’s mindset. If you already have children in your teens and your mindset is mature enough, you can invite them to have a discussion so that they can see first hand the family’s financial condition. It is not impossible if you invite children to save money together so that financial conditions can recover soon. You also can involve children to freely express opinions in saving family expenses.

After knowing the points above, it turns out that applying smart ways to manage family finances with a democratic system is not too strange. You can practice it with a partner, or with a child. Invite each family member to participate, besides being able to make families more sensitive to financial conditions, you can also educate children early on in managing their agr finance more readily in the future.

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