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Jakarta, – Increased monthly expenses due to the many agendas in the month of Ramadan, can create instability in income and expenses. This can lead to a net cash flow deficit in a month, which has the potential to drain savings, can this be forgiven?

A monthly cash flow deficit occurs when your total expenses exceed your income. Let’s just say, in a month your total income is IDR 10 million, and if your expenses reach IDR 12 million, then there will be a cash flow deficit of IDR 2 million.

To overcome this excess spending, it will reduce the value of your savings.

The question arises, is this understandable because everyone’s expenses in the month of Ramadan will increase? And is there a smart way to watch out for spikes in personal spending in the holy month? Here are the answers.

As long as it is a necessity, it is still understandable

Ideally, most of the expenses that must be met are obligations and necessities, while a small portion are desires.

When that’s what happens to your expenses, then the negative cash flow that occurs in our finances is still understandable.

Next month when you receive your paycheck, you can live a little more frugally to keep your expenses in check. This can be done by cutting a certain percentage of your expenses related to lifestyle.

But if it’s the other way around, of course it indicates you’ve gone too far in satisfying your desires.

In the following month, you are also required to fast to spend money for your desires, or it is very likely that you will also have to reduce spending on basic needs.

The smart way to deal with spikes in expenses in Ramadan

Preparing for these expenses by saving is one of the most effective ways to be aware of this is by saving in advance for Ramadan needs.

You can prepare it six months before Ramadan arrives, or a year before if necessary.

Let’s just say, every Ramadan your expenses will increase to IDR 15 million. So in a year, you can allocate Rp. 1.25 million to anticipate this.

Additional income can certainly help you reduce your financial burden in the month of Ramadan. Because with additional income, you can save a larger amount of money each month.

What is the solution if saving Rp. 1 million a month is difficult?

Just allocate as much money as possible that you can save every month for this need. If indeed you can only allocate say Rp. 300 thousand a month, then in a year there will only be Rp. 3.6 million collected.

You also have two choices, use the THR money to make up for the shortage of spending on Ramadan Day, or reduce spending on Ramadan carefully.

Even though it can be used for anything, it’s a good idea to use THR money for productive things, for example, to ease your debt burden if you have one, increase emergency fund reserves, pay zakat, buy insurance, and invest.

The wise solution is to limit Ramadan spending first, and use a fraction of the THR money to cover your Ramadan needs.

Let’s just say, you will limit your Ramadan expenses to 30% of your total monthly salary and THR.

If in a month your salary is Rp. 10 million, and you will receive THR for one salary, then your total spending for Ramadan is a maximum of Rp. 6 million.

If there is an excess of THR funds, you can allocate it to the productive things mentioned above.

[Gambas:Video CNBC]

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