Budgets Revealed: 3 Office Workers

Three highly successful mid-twenties women with overseas degrees share their budgets with LiveOlive. See how much they earn, how they save, spend and plan to achieve their goals. 

Ida, 26

Ida has an MBA from the UK and works for a multinational oil and gas company. She earns more than Rp 10 million per month and gets a total of 16 months of annual salary. From her income, she invests 25% in mutual funds. She allocates the rest for her daily needs and yearly goals. “I took a financial planning course so I can manage my money better,” Ida said.

Besides her daily needs, Ida also plans for yearly expenses such as overseas holidays, car maintenance and trips for the homecoming exodus ( mudik). Ida now has some funds in time deposits and investments in precious metals. “I plan to use my investments for my pension fund and as down payment for an apartment,” she said.

Goal: Buying an apartment. The value of her investments in mutual funds' now covers about 70% of the down payment.

LiveOlive comments*:

It's really good that Ida is saving and investing at least 25% of her income. Her strategy of using investments to save for a down payment for an apartment is also smart. Ida just needs to make sure that she has an emergency fund of at least 6 months of expenses. Based on her claimed expenditure of Rp 7.5 million per month, she needs at about Rp 45 million kept partly in a savings account and the rest in one or three month time deposits. Since Ida is under 30, it is good time to consider getting critical illness insurance, since it will be cheaper.

Nala, 26

Nala works as a lecturer at a private university in Indonesia. She graduated from University of Bradford in the UK. As a lecturer, she earns around Rp 6 million per month. “Sometimes I get Rp 1.5 to Rp 2 million side income but it is not fixed,” said Nala.

She saves about 35% of her income. “My expenses is the remaining money I have after savings,” Nala said. To discipline herself, she distributes her money to different accounts right after receiving her salary. “I separate the budget for shopping and socializing from my daily expenses such as food and transportation. I also separate them from my savings,” she explained.

Nala does not have any investments apart from her savings. “I want to invest. If I have the money, I would love to invest on a landed house,” she said.

Goal: Saving for her wedding. She has already reached 50% of total estimated cost.

LiveOlive comments*:

Nala gets a gold star for saving her income before spending it on anything. She also separates spending money from her savings. Nala just needs to make sure she is putting her savings in a time deposit so it earns higher interest. There is no need to wait until she can afford a house before she starts investing. Nala can start small, even Rp 500,000 per month, with mutual funds or unit linked products.

Since Nala has extra income that is variable, she can allocate at least 50% of that extra income for investments or saving for goals (getting married). The rest, can be used for fun –she is young, now is the time to enjoy life!

Luki, 25

Luki graduated from University of Illinois Urbana Champaign in the US. She works as an analyst in a foreign consulting company in Indonesia and earns Rp 25 million monthly. Although she saves, Luki admits that she doesn’t have a fixed monthly allocation. However, her current investment portfolio includes Rp 50 million in time deposits, some unit linked products, and Rp 100 million worth of Islamic Bonds ( sukuk) due in 2018.

“I spend 50% of my total income to pay for my parents’ apartment mortgage,” she said. On top of that, she has a rusunami (subsidized apartment) for herself that she is still paying a mortgage on. “Every month, I set aside 10% of my income for tithing and mortgage payments, and the rest will just go with the flow.”

Although she already has some investments, Luki admits that she still wants to invest on precious metals and real estate. “I don’t have the (liquidity) money and the time to manage it, so I haven’t started investing,” she said.

Goal: After paying off her apartment, she wants to buy a house. Currently she has not started saving for that house mortgage.

LiveOlive comments*:

Life insurance is key for Luki since she seems to be supporting her parents. The insured amount should consider her parents' age and how much financial support she provides to them. Considering her income level and depending on the lifestyle she wants, Luki can consider the following budget allocation:

  • 40% for basics (food, transport, utilities)
  • 10% for church contributions
  • 30% for savings and investments (including mortgage payments)
  • 20% for fun (shopping, travel, etc.)

Her monthly mortgage payments for her parent's apartment as well as her own are on the high side at 50%. She needs to keep it to about 30%-35% of her monthly income. Luki seems to be heavy on property –parent's apartment, rusunami + possibly another one), so needs to think of diversifying to other investments. However, Luki needs to ensure that she has an emergency fund before she invests further.

*Note: LiveOlive’s comments are based on information shared by interviewees. Portfolio yield may vary according to fund performance. Some names and identifying details have been changed to protect the privacy of individuals.

Read also: 5 Money Strategies You Should Have in Place by 30

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