In this article we will try to further explore how to arrange priority scale for expenses along with the amount of composition of each of these expenditure posts from our income. The preparation of the priority scale can be based on the potential risks that will be possible if we are does not allocate funds at the expenditure post. Here are 4 (four) types of expenditure posts that we are trying to compile based on the priority scale: 1. Main Priority: Expenditures for the Rights of God Almighty We agree that all religions teach that in essence what we have today is the fortune given by God Almighty. And from some of the fortune we must issue, to be distributed to those who need it with the aim of "cleaning" property. This expenditure post is certain, because there is a minimum limit that must be paid. For example, Muslims are obliged to set aside at least 2.5 % of their income while for Christians are required to set aside a minimum of 10 %. If you look at the perspective of religious views, this post should be made a top priority for expenditure because the risk is also very large if ignored. The percentage of income: 2.5 % - 10 % 2. Second priority: Expenditures on debt expenses We cannot deny that some of our current needs can only be met through the financing process or what we are better known as credit. For example buying a house. The survey results conducted by Rumah123 at the end of 2016, it is estimated that only 5% of the millennial generation can have a house in Jakarta on some of the remaining somewhere. This is because the price of property continues to increase from time to time. The average property price increase is 8% each year. On the other hand the prediction of salary increases issued by Korn Ferry revealed that the salary in Indonesia is estimated to rise 7.8%. However, after calculating the estimated Indonesian inflation rate of 4.1%, the real salary increase in Indonesia in 2019 is predicted to be 3, 7%. Based on these conditions, the solution that can be done by someone in order to have a house is through the installment of Home Ownership Credit (KPR). Well ... if we have debt bills or installments, then this expenditure post is the second priority after alms. This expenditure post has the highest level of risk if ignored. Because it has a financial impact (fine, interest), psychologically (billed), it can even have a legally impact (demanded). Related to credit, in addition to needs such as home purchases, it should also be done only for things that are productive not consumptive. Do not let all or most of our salaries run out just to pay installments The percentage of income: maximum 30 %3. Third Priority: Expenditures for future financial purposes We certainly have many financial goals in the future, ranging from marriage costs, children`s school fees to retirement preparation. So that all these financial goals can be achieved, then we must allocate a portion of our income from now on in investment instruments that are adjusted to the expected period of time. Expenditures for the future are the third priority and take precedence before routine expenses or monthly living costs. The percentage of income: Minimum 10 %4. Fourth Priority: Monthly Routine Expenditures Kitchen shopping, father or child pocket money, transportation, electricity bills, water and telephone and entertainment are examples of routine expenses that are carried out every month. This is a expenditure post that most people provide the most allocation, where based on the survey results it is found that they spend 70 % or more of their income every month. When in fact the expenditure posts are very flexible in number. The nominal can still be reduced by frugality or it can be no maximum limit if you obey lust. Many ways can be done so that we can adjust the amount of allocation for this expenditure post. For example kitchen shopping can be reduced by compiling a varied menu, it does not always have to be filled with meat protein. Father or children`s allowance can be reduced by bringing food for them so there is no need for snacks, transportation costs can be reduced by choosing more to use public transportation than private vehicles. Saving water, electricity and telephone use can be reduced so that the bill can be reduced. As well as portions to fill weekends outside the home such as watching cinema, to malls or recreation areas can be reduced once a month replaced with quality time at home by creating various kinds of activities carried out together. And when viewed from the risk of the risks the smallest (if not done will not be fatal) compared to other expenses involving third parties. For this reason, this post is the last priority, aka waiting for the rest of the other expenditure post. The percentage of income: 50 % - 60 % So after knowing the scale of priority expenses and allocations, let`s be wiser in managing our expenses. Congratulations to invest! September 30, 2019 PT Danareksa Investment Management http://reksadana.danareksaonline.com Photo by Niels Steeman On Unssplash