Digital Planning Platform to Facilitate Financial Literacy and Independence

Today, financial independence is often the talk of the public, especially the younger generation in Indonesia. Financial independence itself is defined as a condition in which a person is not burdened with consumptive debt and has a passive income source that can meet daily needs and desires.

Everyone has different benchmarks when it comes to financial independence. One thing is certain, to achieve this goal, good financial planning is needed. The use of technology such as financial records and investment platforms aims to make it easier for people to achieve financial goals, but not a few are still not familiar with effective financial planning.

Sribuu COO and Co-Founder Nadia Fadila revealed that the phenomenon in the fintech industry in the past five years was a focus on inclusion. Company fintech compete to invite people to use digital platforms such as electronic money, introduce banks online, and facilitate access to investment.

"According to OJK data, 80% of Indonesians already have access to banking. However, the level of financial literacy is still 30%. There are still problems that we can solve. tackle in the future as [platform] fintech. How can people use various accesses according to their financial intelligence," said the woman who is often called Dila.

Departing from this phenomenon, Sribuu wants to facilitate and help direct the younger generation to be able to have good financial planning in order to achieve their financial goals, of course assisted by the use of the latest technology.

Literacy along with inclusion

Before entering the era of technology, people did financial planning manually by taking notes in books. Then, as the times progressed, they switched to using the Spreadsheet application. Currently, users are increasingly facilitated by the presence of an AI-based financial recording platform that can provide personalized recommendations based on the user's track record and preferences. This recommendation did not escape the review of certified financial advisors.

In addition to simplifying the financial planning process, technology platforms also contribute to improving financial literacy in the community. Sribuu, for example, actively provides education related to financial literacy through social media and articles in the application.

For outreach, companies start as a community and want to expand their reach. One of them is through collaboration with more than 30 campuses in more than 10 cities with the Sribuu campus ambassador program.

When the pandemic first broke out, many people began to care about their financial health. More and more people are interested in knowing more about investment, insurance is accompanied by increasing traction on many financial instruments. However, with different backgrounds, responsibilities, and income for each person, there is no one specific formula that can be applied to all. Here, financial literacy is needed in deciding the appropriate instrument for effective financial planning.

Financial planning cycle

In the #TuesdayStartup discussion that took the topic "Road to Financial Freedom: Exploring the Role of Technology in Achieving Financial Freedom", Sribuu Business Development Achmad Farhan Noor explained the stages that must be passed in an effort to achieve financial goals. The first thing to determine is the target timeframe for achieving financial independence and how much it will take to get to that point.

After setting goals, the cycle begins with determining budget which are divided into categories. One of them is the allocation for savings, here you can start to see if there are investment instruments according to the risk profile that can be used to achieve goals more quickly. Then, start carrying out daily transaction recording. For financial independence, it usually has a long period of time, therefore evaluation is needed at intervals to ensure that it remains on the right track.

In carrying out this cycle, it takes a lot of commitment. In addition to having to be diligent in recording expenses, you must be able to refrain from spending more than budget already set. As a technology platform, the focus is on helping to simplify the process, as well as reminding, but commitment comes from each individual.

Farhan added, "On average young people now have expenses that are about 10-20 percent greater than their income. Only about 10% can buy one of the most important accesses, namely a house."

Various digital platforms offer easy access to banking services. On the one hand, this has a positive impact in encouraging inclusion, but if it is not used properly it can also be misleading. One of the obstacles in achieving financial independence is debt. "In short, debt should not be greater than 30% of total income," said Dila.

One thing that is interesting is that financial planning can be applied by everyone, regardless of having a steady income or not. Dila revealed, there are also Sribu users who are freelancers (freelancer). According to him, it is very important to have an emergency fund of at least 6-12 months of monthly expenses for unpredictable conditions.

Protection before investment

Because literacy is still minimal, Farhan also mentioned the frequent occurrence of misconceptions. Before setting financial goals, there are two things that are no less important to have first, namely insurance and emergency funds. These two things are for protection, when this has been fulfilled, then you can only use investment instruments.

"There are many conditions where there is no direct investment protection. When there is a critical situation, without emergency funds, the investment must be disbursed," he said.

One of the topics that often appears in discussions related to financial planning for the younger generation is the existence of generations sandwich. This generation interpreted as a condition when a person must meet the needs not only for himself, but also for two (or more) generations -- above and below. The choice is how to set good allocations for both needs and wants. If there is a shortage, then there must be awareness to seek additional income.

Regarding investment instruments, Sribuu is currently developing a community to accommodate certain financial goals, along with educational efforts from the investment side. However, integration with investment instruments is not yet available in the application.

Some time ago, Sribuu managed to pocket early stage funding from Beenext and some angel investors. This funding is said to focus on developing more personalized financial recommendations and technology Advisory help users achieve financial goals.

Since it was fully operational in early 2021, Dila revealed, the biggest challenge, apart from financial literacy, was the absence of a system open banking OJK regulated.

Apart from Sribuu, similar applications that are also popular in Indonesia, including my finances, Pay OK, PINA, Finoo, Moni, Xettle, Finku, New (Fazz Financial Group). Some of them have won the trust of investors in the form of obtaining fresh funds.

"Don't be afraid to start dreaming of achieving financial independence. Understand the reality, then set goals. Build a strong commitment to financial planning. Many are afraid when talking about financial planning. Start small, the important thing is to start first," Dila concluded.