Indonesia's economy continues to grow, creating more and better opportunities for women in the workplace. According to Statistics Indonesia, women's labor force participation rate was 53.41% in August 2022. But despite their important role in the workplace, unfortunately, the same report shows women still earn less than men, with the average wage for women at IDR 2.59 million, compared to men’s at IDR 3.33 million. Many of them are working mothers and some are single mothers trying to make ends meet for their growing families.
This month, we not only usher in a new year but also celebrate Mother’s Day in Indonesia every December 22. While it is no secret that working mothers are amazing at juggling many different roles and responsibilities, this time of the year is a good opportunity for them to reflect on the past and look toward the future. Inevitably, some of the future goals will involve financial wellness. In the spirit of heading into Mother’s Day, here are some of the financial resolutions working mothers can set to start fresh for the new year.
Over the past year, we have seen how low-to-middle-income working mothers have been using our platform to relieve the financial burdens that arise from the waiting periods between paydays. Being able to withdraw a portion of their already-earned salary through wagely helps them pay for their children’s educational needs, buy groceries, and meet unexpected expenses on time. Today’s rising cost of living and uncertainties highlight an opportunity for employers to provide meaningful and impactful financial wellness benefits every working mother deserves.
- Tobias Fischer, CEO of wagely
1. Review your 2022 spending and reset for the coming year
How do you plan for the future if you don't even know where you are today? Have a fresh look at your spending habits over the past year. Did you get a pay raise or promotion? Did you add a new member to your family or has your kid just started school? Were there any significant expenses this year? Go through your bank statements or your financial records and then see what you did right and what you look forward to doing better next year.
2. Breaking out of the cycle of debt
Debt can be a significant obstacle to reaching your financial resolutions. According to OJK, the total number of non-performing personal loans from P2P lending reached IDR 4.54 trillion as of October 2022, to which women contributed around IDR 2.23 trillion. Go through your budget and decide how much extra you can put toward your debt. Paying everything immediately will help you get out of debt faster. Don’t let penalties for late payment and interest build.
In recent years, many employers have offered wagely to their workforces as a benefit. Through this earned wage access app, employees can see how much salary they have earned up to that date and withdraw a portion of it anytime needed before payday. This helps employees avoid irresponsible borrowing habits from illegal online lending. A Financial Health Survey with over 3,500 employees having wagely shows that 29.15% of employees said they have no debt, while 53,33% have manageable debt. Only 3,41% have far too much debt.
3. Start saving for an emergency
Over recent months, we have seen heartbreaking news about layoffs and hiring freezes. An emergency fund is important even if you think your job may not be at risk. While no one wants to think about bad things happening, preparing for the unexpected can bring peace of mind. The size of your emergency fund will vary depending on various aspects, but putting aside 3 to 6 months' worth of expenses is a good rule of thumb. Remember that proverb: “Prepare your umbrella before it rains”.
4. Level up your financial literacy
The latest report by OJK shows that women's financial literacy index score this year for the first time was higher at 50.33% compared to men at 49.05%. Hooray! Expanding your financial knowledge is one of the best resolutions you can make for yourself. Suppose you find it difficult to learn from hundred pages of a book. In that case, you can go to your social media and learn from #wageducation, a comic strip series by wagely to help employees understand the fundamentals of money management in an easy and appealing manner.
5. Stop lifestyle inflation and live below your means
It doesn’t matter how much money you make if you keep spending all the extra money to upgrade your lifestyle. Sure, it is fine to treat yourself after getting a raise or a bonus. But when it becomes uncontrollable, you might experience a phenomenon called “lifestyle inflation”. Always focus on your financial goals and why you are making the effort to control your spending. Living below your means doesn’t mean sacrificing your quality of life. It is a great way to improve your financial wellness and give you more financial freedom in the future.
Anyone that has ever made a new financial resolution knows how hard it is to keep. But just because most can't do it doesn't mean you can't. At the end of the day, it all comes down to consistency and how dedicated you are. So, let’s make the most of these next 12 months and put in the hard work to make it happen. Happy Mother’s Day!