IPB University Lecturer Shares Tips on Managing Finances After Eid Using the 50-30-20 Rule

Eid is often followed by a surge in spending that can potentially exceed a family’s budget. In addition to purchasing items for the holiday, another common challenge is unexpected expenses that can deplete funds and disrupt a household’s financial stability.

Dr Wita Juwita Ermawati, a lecturer in the Department of Management, Faculty of Economics and Management (FEM) at IPB University, shared several tips for managing finances during Eid.

She advises every family to calculate total spending during Eid and review their current financial status. “It’s important to check if any financial categories have been disrupted, savings have been depleted, or even if new debt has emerged,” she said.

According to her, resuming savings after Eid is a crucial step to restore financial stability while keeping planned financial goals in mind.

Dr Wita explained that the first step is to identify daily routine needs as well as non-routine needs in the short, medium, and long term, such as children’s education costs, healthcare, and vacation plans. Afterward, each need should be prioritized based on urgency and aligned with income capacity.

She also encouraged families to set future financial goals, such as funds for weddings, religious pilgrimages, or investments. In her view, having sufficient savings is crucial to avoid debt, especially in emergencies. She also urged against relying on online loans (pinjol) as a quick fix.

The 50-30-20 Rule

When managing a budget, Dr Wita recommends using the 50-30-20 rule, where 50 percent of income is allocated to basic needs, 30 percent to wants or debt payments, and 20 percent to savings.

If routine expenses exceed income, she suggests that families review non-essential spending categories and consider seeking additional income.

With disciplined budget management and annual financial evaluations, Dr Wita believes that post-Eid financial issues can be minimized. Such evaluations are also crucial as a foundation for the family’s financial planning in the coming year to ensure financial stability is maintained. (dh) (IAAS/WSG).