THE PRICE OF KEEPING UP

Downgrade Lifestyle: Are Indonesians Changing Their Way of Living to Survive?

A Feature By: Ika Salwa Nuranita

    Recently, Indonesia has been facing the issue of the rising cost of living. The existing cost of living has become a concern and a burden on households. As they reevaluate their spending habits, they are choosing to look for cheaper options and adopt a simpler lifestyle.

WHEN EVERY RUPIAH MATTERS

        For some people, buying coffee at a café every weekend, going shopping, and buying their favorite foods are routine activities. These days, however, some people are starting to think twice about buying things or even spending money on things that have become necessities for them. 

  

       Recently, there has been a lot of discussion in Indonesia about the term “lifestyle downgrade.” One example of this is a shift in shopping habits. Some people are adopting simpler habits. However, a major question lies behind this seemingly simple change: Are Indonesians truly choosing a simpler lifestyle, or are they being forced to change their lifestyle due to financial pressures?

THE PRESSURE OF EVERYDAY EXPENSES

     Food, transport, housing, electricity, education, and communication all compete for a place in a household budget. When several costs rise or remain difficult to manage, even small price changes can affect the amount left for other needs. The pressure is not identical for everyone. A household with stable income and savings may absorb a price increase more easily than a family whose earnings are already committed to rent, bills, and food. 

    Bank Indonesia reported annual inflation of 3.23 percent in October 2026, while volatile food inflation reached 5.81 percent. These figures offer economic context, but they do not mean every product became more expensive by the same amount. Inflation measures the general movement of prices; individual experiences depend on what people buy, where they live, and how much of their income goes toward essentials.

SMALL CHANGES, DIFFERENT HABITS

        A visible sign of lifestyle adjustment is the way people shop and spend their leisure time. Someone who used to visit an expensive coffee shop may choose a smaller local café. A family may compare prices before buying groceries, switch brands, or plan meals more carefully. Others may reduce online shopping, delay replacing electronics, or make entertainment at home the default rather than going out. 

      These choices may look minor, but together they reveal how people are reconsidering priorities. Spending less can be a deliberate financial decision. It can also be a response to limited income, debt, unstable work, or the need to support other family members. The same behaviour, therefore, can mean very different things in different households.

“Are people choosing a simpler life, or adapting because their budgets leave them with fewer options?”

THE MIDDLE-CLASS SQUEEZE

     The middle class is often discussed in relation to consumption, but having a regular salary does not automatically guarantee financial comfort. Monthly payments, transport, school fees, housing costs, and support for relatives can leave little room for unexpected expenses. When income does not keep pace with a household's costs, families may cut back on nonessential purchases first. 

    An IPB University discussion of the downgrade-lifestyle phenomenon has described spending adjustments as one way households respond to financial pressure. This does not establish that every middle-income family is struggling, but it highlights why changes in consumption deserve attention. A person may still be employed and paying bills while feeling less secure about savings, emergencies, or future plans.

MORETHANAPERSONALBUDGET 

      Changes in household spending can also affect businesses. If customers visit cafés less often, buy fewer clothes, or postpone leisure activities, small businesses in those sectors may see fewer sales. The effect will vary by location and business type, and lower spending by one group does not automatically mean an entire sector is in crisis. Still, consumer choices connect household finances with the wider economy. 

      There can be positive outcomes too. Planning purchases, comparing prices, cooking at home, and avoiding unnecessary debt may help people build healthier financial habits. The important distinction is whether people are choosing to simplify their lives or are being pushed to give up things they value because basic expenses take up too much of their income. 

CHOICE OR NECESSITY? 

      The phrase downgrade lifestyle can make a difficult situation sound like a fashionable trend. Yet behind the label are different realities: some people are consciously prioritising savings, while others are cutting back because they have little choice. To understand the phenomenon, headlines and national statistics are not enough. The experiences of workers, parents, traders, and young adults also matter. 

      A fuller picture requires comparing price data with household budgets, income patterns, and the voices of people affected. It also requires asking whether wages, job opportunities, and public support allow families to meet basic needs without constant financial anxiety. 

LIVING WELL, NOT JUST SPENDING LESS 

       Downgrade lifestyle is more than choosing cheaper products or reducing entertainment. It reflects how people respond to economic conditions and decide what matters most. For some Indonesians, living more simply may be a personal choice.

        For others, it may be a way to manage responsibilities when money is limited. The deeper question is not how much people can spend, but whether their income allows them to meet their needs, prepare for emergencies, and live with dignity.