Every human certainly needs money to fulfill needs and wants, so every need and want can be fulfilled with financial management. Financial management is an action to achieve future financial goals (Bank Indonesia 2013). Financial management includes the management of personal finances, family financial management, and financial management of a company. It is an important part in overcoming economic problems, whether individual economic issues, family, or company. It will give many benefits for us, but not all financial management will work well. Bad financial management will make a bad impact too. On this occasion we will explain about what the benefits and the impacts of financial management.
Financial management gives benefits for us. First, helping to make our real financial picture in daily life (Budisantoso and Gunanto 2013). With the right financial management we can know in detail our net income finance. Once we know the net income of our finances then we can determine expenditure appropriately to meet our daily needs. That way, our finances become more organized and will minimize the risk of waste in shopping.
And then the second benefit is to anticipate unexpected financial risks in the future (Budisantoso and Gunanto 2013). We never know what will happen in the future. Does our company suddenly suffer a loss and then go bankrupt or we suffer pain that we never expect before that requires a lot of medical costs or suddenly we are fired by the company. All the bad things could happen to us at any time. Therefore, we need to anticipate the unexpected financial error. We could save our money, so when we suddenly need money, we don't have to be confused or borrow money.
Despite the benefits, it turns out that financial management can cause a bad impact too. The bad impact occurs due to bad financial management. The first impact of poor financial management is behaving extravagantly. In poor financial management we can not distinguish between needs and wants. The desire will continue to exist and there is no limit to it so we always spend the desire with the money we have. It is very bad for our finances. If it continues it will lead to the habit of extravagant behavior in our financial expenses. It should be prevented from the start if you do not want to cause even worse effects. The right way to not behave extravagantly is that we must be able to separate between needs and wants and also we should be able to refrain from spending any desire but more prioritize to meet the needs first.
The second bad impact is having lots of debt. This can happen because we do not have good financial planning. Removing or even spending money with bad planning is a sign of inability to manage the right finances. If we don't have any financial planning and we don't know how much or for what we spend our money, then it will waste our money. For that we need to add insight and knowledge about how to manage finances properly, often saving for the long term, saving in spending, etc. It should be applied in order to avoid debt
We can conclude that good financial management will give us good benefits. However, if we can not manage finances well it will cause bad impacts for us. This can be prevented by adding insight and knowledge of financial management so that we are not wrong in determining expenditure, and also we must refrain from behaving wasteful.
References : Bank Indonesia.2013.Buku Panduan Guru Ekonomi SMA / MA Muatan Kebanksentralan.Jakarta
Budisantoso and Gunanto.2016.Cara Gampang Mengelola Keuangan Pribadi dan Keluarga.