Managing finances isn’t just about saving or avoiding impulse spending. Often, when you receive additional income, such as a holiday allowance (THR) or bonuses, the temptation to spend it immediately becomes a challenge. This is where a financial management strategy becomes essential. One widely discussed concept is frugal living. Unfortunately, many people misunderstand it, assuming that frugal living means being stingy and sacrificing quality of life. In the reality, this concept is about managing expenses wisely and efficiently without compromising your quality of life.
Basically, frugal living is the art of managing finances to build a strong financial foundation. Applying frugal living principles can also help anticipate future financial risks by preparing essential financial components such as emergency funds, retirement savings, protection, and investments. This way, you can ensure that your finances remain secure and well-planned for the future. Additionally, here are some tips you can apply to manage your THR funds or bonuses using the frugal living concept:
- Understand Wants and Needs
- Build Sustainable Financial Security
- Investing in Skill Development and Capacity Building
- Prepare for Protection Early On
One key aspect of frugal living is understanding between wants and needs. Before making a purchase, try resisting the urge to shop for at least three days. Ask yourself, “Is this something I truly need, or just a want?” This habit helps you use your money more wisely, avoiding unnecessary spending on consumable items with short-term value.
Use your THR funds for expenses that strengthen your financial foundation, such as building an emergency fund. Ideally, this should cover 3–6 months of expenses. The remaining funds can be allocated to long-term investments like mutual funds, gold, or deposits. It's not just about saving money but ensuring financial stability and peace of mind for the future.
Beyond minimizing unnecessary expenses, your THR or bonus funds can be used to enhance your assets, one way is by enrolling in courses or training relevant to your career or business. This is a valuable investment that can open up greater earning opportunities in the future.
Frugal living is about making the most of your finances, including ensuring long-term protection. One way to do this is by having life insurance as financial security for your family in case of the unexpected loss of the primary provider. This way, life insurance serves as a long-term investment that aligns with a smart and prudent lifestyle.
To address protection needs, BCA and BCA Life have collaborated to introduce BCA Life Heritage Protection, a traditional life insurance product offering financial security for up to 99 years with a sum insured of up to IDR300 billion. Here are the key benefits:
- Death or Life Benefit: 100% of the Sum Insured up to the age of 99
- Terminal Illness Benefit: 20% of the Sum Insured or up to IDR3 billion
- Additional Sum Insured Benefit
- Policy Loan Benefit: Up to 80% of the guaranteed cash value
- Policy Redemption Benefit
For more information, consult a BCA Life Financial Advisor at the nearest BCA Branch Office or visit bca.co.id/proteksiheritage.