With the various economic inflations that occurred in 2024, coupled with market and economic turbulence, it has become crucial for Generation Z and Generation Alpha to prioritize their expenses. As is well known, the cost of living in Jakarta has reached a considerably high level, according to data provided by Bank Indonesia in June 2023. A Consumer Survey conducted in June 2023 indicated that the majority of residents earning below the minimum wage experience regular financial pressure.

Therefore, it is necessary to implement the concept of self-control in living expenses. In Indonesia, particularly among Generation Z, there is a significant consumerist mindset. In economic strategy, there is a concept called Frugal Living. Frugal Living is a lifestyle that has developed among some individuals and even modern families. It focuses on spending effectiveness, with the understanding that not every scenario in life will run smoothly.

According to Taylor-Hough (2003), Frugal Living is not synonymous with a depressive, cheap, or overly self-restrictive lifestyle. Frugal Living simply involves applying planning and management to expenses so that they align with one's needs, avoiding a consumptive lifestyle. Indirectly, Frugal Living is an extension of the Risk Management concept. It involves consciously and strategically allocating funds to achieve structured future financial goals. Frugal Living can be practiced in various ways, such as saving and managing finances wisely.

So, what are the obstacles for most of Generation Z in implementing Frugal Living? According to a survey conducted by Bank Indonesia in 2023, high consumption expenditures, reaching 75% of people's income, are driven by various factors such as FOMO (Fear of Missing Out) and national inflation, leading to financial pressure.

Pressure on certain social classes is also caused by the soaring average propensity to consume, which means spending income as a form of fulfilling life needs or economic circulation strategy. The significant expenditure is the accumulation of several factors, such as a decrease in savings, a reduction in job opportunities, and an increase in debt burdens, particularly impacting families.

For instance, some members of Generation Z take out loans to purchase cars or smartphones with high depreciation values. Focusing on managing available funds, especially for newcomers entering the workforce, is a key factor in achieving success over the next ten or even fifty years. One must understand the depreciation of an asset; for example, buying a car will be affected by a depreciation rate of 63% (according to findings by the financial YouTube channel Satu Persen) starting from the moment the car is purchased. So, when someone buys a car worth 100 million, within two to three years, the car's value will drop to around 60 to 70 million, compounded by the physical condition that may not always be optimal.

Implementing Frugal Living by minimizing lifestyle choices amidst rising economic standards is essential. Although investing may seem like the antithesis of frugal living, which minimizes spending, strategically investing in assets like gold or real estate can yield greater profits in the future, as these assets do not experience extreme depreciation and can maintain their value over the long term. This aligns with the primary principle of Frugal Living, which is to achieve financial freedom and secure future funds. Wisely allocating funds and protecting them from excessive spending is the first step in safeguarding future finances.

Purchasing items that enhance productivity can also be considered within the concept of Frugal Living. This is because the items we buy are not merely wants, but needs that contribute to factors such as skill development, increased multimedia productivity (e.g., purchasing an iPad for motion design and illustration), a laptop for activities such as architectural design and data analysis, or a used vehicle from five to eight years ago for use as an online driver, thus maintaining productivity.

By adopting Frugal Living, Generation Z and Generation Alpha can take control of their finances early on. The abundance of alternatives in choosing purchases will become an important mindset, as it’s essential to remember that quality over quantity matters. If you are confident that a purchase will offset expenses and have a balanced Return on Investment (ROI), then you are already implementing the correct financial strategy.