Adopting Frugal Living in the Digital Age: A Smart Lifestyle for Millennials
Dec 02, 2024
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.
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