Adopting Frugal Living in the Digital Age: A Smart Lifestyle for Millennials

Indonesia’s younger generation faces a range of financial challenges, from rising education costs and managing independent living to societal pressures to keep up with a consumer-driven lifestyle. Additionally, the government’s plan to raise VAT to 12% next year, as outlined in Law No. 7 of 2021 on the Harmonization of Tax Regulations (HPP), could potentially further intensify financial pressures.

Despite these obstacles, there’s an opportunity to take charge of personal finances through frugal living—a financial approach that has gained popularity on social media. Frugal living offers not only cost-saving benefits but also encourages thoughtful and value-driven financial decisions. By embracing technology, streamlining digital subscriptions, and prioritizing sustainability, young people can lead a more efficient lifestyle without compromising their enjoyment.

Understanding Frugal Living: Smart, Not Stingy

According to the Ministry of Finance, frugal living derives from the word “frugal,” meaning economical, and “living,” meaning life. This lifestyle emphasizes making wise spending decisions, focusing on needs rather than wants, and maximizing the value of every financial outlay.

Financial planner Mohammad Andoko from Oneshildt Financial Planning, as reported by Liputan6, explains that frugal living is different from stinginess. Frugal living means aligning spending with priorities, while stinginess involves avoiding necessary expenditures even when they are beneficial. By practicing frugal living, young people can focus on meaningful priorities like experiences and sustainability rather than accumulating non-essential possessions.

Practical Steps to Embrace Frugal Living

1. Leverage Technology for Financial Management

Leverage free budgeting apps to track expenses and plan budgets. Additionally, take advantage of discounts and cashback offers on online marketplaces for essential expenses. Many platforms now provide attractive deals for digital payments on purchases, top-ups, or bill payments.

2. Streamline Digital Subscriptions

Review your current digital subscriptions. Are all those streaming, music, and premium services necessary? ? If not, start prioritizing frequently used services to reduce costs. Opting for free versions or shared family plans can further reduce expenses.

3. Embrace Sustainable Practices

One key principle of frugal living is prioritizing quality over quantity. For example, investing in a durable pair of shoes is more cost-effective than frequently replacing low-quality ones. This principle also applies to reusing or upcycling items and maintaining what you own to extend its lifespan.

4. Explore Affordable Entertainment Options

Entertainment often drives unnecessary spending. Instead, explore budget-friendly alternatives, such as attending free community events, enjoying outdoor picnics, or hosting movie nights at home with friends. These activities can offer the same enjoyment without straining your budget.

Frugal living offers numerous long-term benefits, particularly for young people navigating financial challenges. It enables better control over spending, helps achieve financial independence faster, and reduces the stress associated with debt and consumerist pressures.

Additionally, frugal living promotes environmental sustainability by curbing overconsumption. Simple actions like monitoring expenses, reassessing needs, and prioritizing quality empower young individuals to achieve financial stability while living a more meaningful and sustainable life.