Financial Minimalism in Tough Economic Times: Its Meaning and How to Apply It
Jakarta, CNBC Indonesia - The world is facing economic pressures due to escalating geopolitical conflicts in the Middle East between the United States (US) and Israel on one side and Iran on the other. These conflicts are disrupting global trade activities, particularly energy commodities, causing world crude oil prices to surge and pressuring global economic growth.
Bank Indonesia (BI) even forecasts that the global economic growth outlook for 2026 will slow further to 3.0% from the previous estimate of 3.1%. Global inflation is also projected to be higher at 4.2% from the prior estimate of 4.1%, thereby narrowing the room for global monetary policy easing.
In such a situation, the phenomenon of applying financial thrift or financial minimalism has emerged in Indonesia. This is evident from an article by Teresia Angelia Kusumahadi, a lecturer at Atma Jaya Catholic University of Indonesia, titled ‘Crisis Hits, There’s No Harm in Saving But Not Being Stingy à la Financial Minimalism’, published in The Conversation on Friday (24/4/2026).
She proposes this financially thrifty lifestyle model because she sees the effects of global economic pressures potentially spilling over to Indonesia. This is marked by the rising prices of non-subsidised fuels, which have increased significantly, for example, Pertamax Turbo (RON 98) now priced at Rp19,400 per litre, up from Rp13,100 per litre previously, and Dexlite at Rp23,600 per litre, up from Rp14,200 per litre.
‘When fuel prices are sky-high, the prices of basic necessities will surely rise too, as the distribution process for basic goods requires transportation to reach consumers. In fact, living frugally is not wrong. We can still be frugal (read: not stingy) by adopting a minimalist lifestyle,’ quoted from Teresia’s article in The Conversation, Saturday (25/4/2026).
According to Teresia, financial minimalism simply refers to a way of life that highlights the distinction between a person’s needs and wants. To apply it in daily life, one needs to understand the needs that are truly necessary and essential.
This step is followed by practising the removal of things considered less essential or even those that could lead to dependency. According to her, a minimalist lifestyle is the opposite of consumerism and emphasises fulfilling quality needs.
‘So, minimalist living is not frugal living or living as cheaply as possible to the point of sacrificing living standards. The minimalism concept prioritises more sustainable consumption, which has longer-term benefits and focuses on more important things, such as health and well-being,’ she said.
To live by the principles of financial minimalism, here are the methods offered by Teresia:
- Reduce non-urgent consumption
According to her, living simply financially can be achieved by changing consumption habits. For example, choosing quality over quantity by investing in high-quality items that serve long-term functions.
Then, questioning whether something is a want or a need every time one intends to buy non-essential items. Each time this question is posed, one can avoid impulsive purchases that are often unnecessary.
- Reduce shopping apps on your phone
Minimising digital platforms that can lead to impulsive consumption, she believes, can create a simple financial lifestyle pattern.
She emphasises the importance of reducing activities like comparing prices across platforms. This way, one can avoid various online marketplace marketing promotions that are not truly beneficial and only increase consumerist behaviour.
In addition, consider consuming things that provide experiences rather than mere material goods. Investing in experiences can enhance well-being more than adding materials whose value may depreciate or that just fill space and turn into piles of items.
- Detail fixed expenses
Detailing fixed costs and primary priorities that must be spent, such as rent along with its needs, can consider routine expenditures like electricity, water, gas, internet, and so on, monthly household shopping, insurance, and transportation.
To avoid impulsive spending, use auto-debit services for a number of basic expenditures that must definitely be paid each month. For example, car or home loan payments, insurance, savings deposits, or investment costs. This way, limits can be set on daily non-priority spending.
After calculating all those costs, add 10% for unexpected expenses from the total costs. Do not include allocations for entertainment like dining out or shopping outside of essentials.
Once you have a definite figure, that figure will serve as the monthly living reference. This means you need to seek income that can cover the primary priority budget first.