“Frugal Living” And Economic Growth

KONTAN/Baihaki

“Frugal Living” And Economic Growth

Monday, 17 Mar 2025

Frugal living or a frugal lifestyle is currently being widely discussed, becoming a trending issue, especially among young people, generation M and generation Z. The total of these two generations reaches 47 percent of the total population of Indonesia in 2023.

This frugal lifestyle is interpreted as an effort to spend only on essential needs. The motivation can be due to limited income, because you want to invest, or because of savings so you can buy valuable goods that are considered to be able to provide existence or known as FOMO (fear of missing out).

The phenomenon of social media is increasingly influencing the lifestyle of the younger generation. When the world faced the Covid-19 pandemic that began in early 2020, there were many changes in the social and economic lives of the community.

Governments in many countries, including Indonesia, have restricted people's mobility. In Indonesia, it started with the Large-Scale Social Restrictions (PSBB) policy on May 4, 2020, followed by the Community Activity Restrictions (PPKM) policy on January 11, 2021, which was then revoked on December 30, 2022 after the pandemic began to subside.

The effects of these social restrictions have made young people increasingly rely on their online social relationships. All online activities make the list of needs different. Buying a house and buying a car are no longer primary needs because there is a behavior that doesn't want to be bothered among this young generation. The flexibility of this lifestyle is very popular with young people.

A frugal lifestyle is actually common and was also carried out by previous generations. However, frugal living in the 2020s has a different concept along with structural changes due to the effects of the pandemic which relies heavily on the use of social media.

The use of gadgets for economic and social activities based on social media which is very intense in carrying out many economic transactions, changes the preferences of Gen M and Gen Z in consuming, including the goods purchased, lifestyle and perceptions of social relationships.