Finance is a term for matters relating to the management, creation, and study of money and investment. Finance is something that must be faced by all circles, including public finance, finance in a company, and personal finance. Along with the development of the times, the financial needs will certainly increase. For that as humans who have intellectuals, we must be smart to be able to manage finances or finances. Basically, in life, a person makes a financial decision because of three things including how much should be used each period, whether there is an excess of income and how that excess can be used for investment, and how to mark consumption and investment (Widyati, 2012: 90). To be able to achieve financial prosperity, a person needs to have good and healthy financial knowledge, attitude, and implementation. Therefore, it is important for someone to start realizing the importance of financial literacy.
As the younger generation, students will not only face increasing complexity in financial products, services, and markets, but they will also bear more financial risks in the future than their parents (Lusardi, 2010). In managing financial problems, many students learn from mistakes after trying or trial and error, but this has not been able to make them financially smart economic actors. Therefore, the importance of financial literacy must be understood by students from an early age. Financial literacy occurs when individuals have a set of skills and abilities that make them able to utilize existing resources to achieve goals (Widyati, 2012: 91). Financial literacy is needed to avoid and be able to overcome financial problems that will be faced when managing them. Managing finances can be done from a small scale first, such as managing personal finances. Meurut Warsono (2010) managing personal finances can be seen from four things, namely:
1. Use of Funds
The source of funds owned by each individual can come from anywhere. However, the problem is the management or use of the money. The allocation of funds must be based on priorities. The priority scale is made based on the necessary needs but must pay attention to the percentage so that the use of funds is not used up for daily consumption only. The percentage of fund allocation is 70% for daily consumption, 20% for savings, and 10% for investment.
2. Determination of Fund Sources
Everyone should be able to know and determine the source of the funds they have. Sources of funds can be obtained from parents, donors, or scholarships. Sources of funds can also be obtained from various businesses. By determining the source of funds, someone knows and looks for other alternative sources of funds as a source of financial income to be managed.
3. Risk Management
In managing finances, of course, we must also have good protection to anticipate unexpected events that are not desirable. Events such as illness, urgent need, and so on. One thing that can be done for protection is to take insurance. Insurance is divided into various types including life insurance, health insurance, education insurance, and others. However, in terms of choosing insurance, of course, we need to pay attention to the needs that we need in the future and of course, choose a place to do insurance in a safe and reliable place as well as being registered with the OJK (Financial Services Authority).
4. Future Planning
The future is something that everyone will aim for. Therefore, it takes a mature financial plan to meet it. By planning for future needs, we can prepare investments from now on. There are various kinds of investments that we can make. Such as investment in precious metals, buildings, and land/land, mutual funds, and so on. However, whatever type of investment we make, we must pay attention to the needs and security. Because currently there are so many groups that offer fake investments where they offer a lot of money, we must always be careful and vigilant before investing. Make sure that the investments made are under the auspices that can be accounted for, such as the OJK.