These are 4 Strategies to Manage Finances After Fuel Prices Rise

These are 4 Strategies to Manage Finances After Fuel Prices Rise
These are 4 Strategies to Manage Finances After Fuel Prices Rise

Officers fill fuel oil (BBM) into a tank at the Cikampek BBM Terminal, West Java, Tuesday (8/9). Smart Investors need to implement several strategies so that they can continue to invest after the increase in fuel prices which will have an impact on rising inflation. (BETWEEN PHOTOS/Rivan Awal Lingga)

Bareksa.com – The increase in the price of oil and other major world commodities directly or indirectly affects the increase in the cost of production and services in various sectors, and also increases the inflation rate.

The cost of subsidies and compensation that continues to swell and erodes the state budget (APBN) has forced the government to reduce subsidies for fuel oil (BBM), by increasing fuel prices in early September.

In the midst of this condition, Smart Investor We need the right financial strategy so that household operations are not disrupted and investments for the future continue to run smoothly.

Freddy Tedja, Head of Investment Specialist at PT Manulife Aset Manajemen Indonesia (MAMI) shares strategies for Smart Investor who invest in mutual funds. According to him, there are four things that can be done Smart Investor in investing after the increase in fuel prices.

1. Reduce recreational and consumptive expenses

In a short time, the increase in subsidized fuel prices will have an impact on household finances, because the increase in production and logistics costs at the producer level will be channeled to consumers in the form of price increases.

The first thing you should do is reduce expenses that are recreational and or ‘can still be deferred’, for example going to cafes or malls. However, if income cannot be increased, then the only way to keep household finances healthy is to reduce spending on unproductive items.

Smart Investor need to reduce lifestyle without reducing the need for living. You need to eat three times a day, but you don’t need to always be in a restaurant, right?,” said Freddy (23/9/2022).

2. Reset cash flow and disbursements

Never use an emergency fund post for recreational needs, or just to keep your lifestyle the same as in the era of low interest rates. Emergency funds, if forced, may be used to cover the surge in the cost of primary expenditures, such as monthly food and transportation expenses.

At the same time you should immediately start getting used to resetting cash flow from salary/income and also resetting primary expenses.

“For the time being, there are two things that can be done, namely reducing the amount purchased or looking for a substitute with a lower price, so that the quantity/volume remains the same,” said Freddy.

3. Don’t sacrifice the future

In general, investment activities are carried out to meet future needs, such as funds for retirement needs and children’s education funds. To meet these long-term needs, it is necessary to avoid a reduction in investment posts.

“Remember, pay yourself first; Set aside some of your current income for yourself in the future. If the current price of various needs feels expensive, especially in the future. So, manage expenses and still set aside some of your current income to use in the future,” he explains.

4. Always take advantage of investment opportunities

Unlike the previous period, the increase in subsidized fuel prices this time did not cause excessive anxiety. According to Freddy, when the discourse on the increase in subsidized fuel appeared, this policy was actually welcomed by market players. This can be seen from the inflow of foreign investors during last August, after the last few months recorded outflows.

“Amid the impact of rising subsidized fuel prices, plans to increase interest rates by the Fed and Bank Indonesia, as well as external pressures, Indonesia’s financial market remains stable, supported by supportive macroeconomic conditions,” Freddy explained.

The stock market still provides attractive investment opportunities in the long term. According to Freddy, Indonesia’s more solid macroeconomic conditions accompanied by growth in corporate profits which are expected to grow at a healthy pace are expected to encourage stock market movements, especially when global sentiment has improved. The cyclical factors related to the economic recovery supported better corporate sentiment and fundamentals for the stock market.

Meanwhile, the bond market showed resilience amidst various challenges. High real yields were able to sustain bond market stability, even as the US Treasury fluctuated again. The normalization of BI interest rates amid aggressive global tightening has supported the bond market and the rupiah exchange rate. Sentiment will be more positive when inflation rates, especially in the United States and Europe, have reached their peak.

“Asset diversification is the right strategy for investors in realizing various financial goals in the future. Which portion is bigger, whether in stocks or bonds or in the money market, will depend on the risk profile and the target time for the use of the funds,” he said.

Money market-based mutual funds are: money market mutual funds, bond based is fixed income mutual funds and stock based like stock mutual funds, index mutual funds and mixed mutual funds.

Recorded until now there are 13 mutual fund products Manulife Aser Manajemen Indonesia available at Bareksa, of these various types. These include equity mutual funds Manulife Mainstay Stock who managed to book 31.95% cash in the last 3 years (as of 22/9/2022) and Manulife Greater Indonesia Fund with a return of 22.3% in the same period.

For fixed income mutual funds Manulife Indonesian Government Bonds II Class A with a cuan of 18.13% and for money market mutual funds, namely Manulife Dana Cash II Class A . Mutual Funds with a yield of 11.94%.

Source: Bareksa

To be known, mutual funds are a place to raise funds from the community of investors (investors). The collected funds will later be invested by the investment manager into several investment instruments such as stocks, bonds, or time deposits.

Mutual funds are also defined as: an alternative investment for the investor community, especially small investors and investors who do not have much time and expertise to calculate the risk of their investment.

(AM)

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The article is in Indonesian

Tags: Strategies Manage Finances Fuel Prices Rise

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