How Gen Z and Millennials Can Build Financial Security
Jakarta, CNBC Indonesia - Economic pressures, rising living costs, and uncertain job markets are prompting younger generations to rethink their survival strategies. A Deloitte 2023 Gen Z and Millennial Survey highlights high stress and burnout levels among these groups, driving them to adopt pragmatic financial management. This includes diversifying income sources, building emergency funds, and utilising digital banking and investment apps. Here are steps Indonesian youth can take to stay afloat.
Side hustles as a vital lifeline for young people
A Labor Market Brief report by LPEM FEB UI (August 2024) noted that approximately 19.3 million Indonesian workers have side jobs in addition to their main employment, as a single salary is increasingly insufficient to meet living costs. The minimum wage in 32 out of 38 provinces remains below the Living Wage Standard (KHL), including in Jakarta. The widest gaps are recorded in Yogyakarta, Bali, and West Java. The majority of those with additional income (around 11.5 million people) reside in urban areas, where living costs are most pressing.
Amid rising living costs, young people are increasingly turning to small-capital, flexible side hustles with potential to grow into larger income streams. The digital economy has opened new opportunities, from freelance design and editing, online selling, affiliate marketing, to remote work paid in foreign currencies like US dollars. For many young people, leveraging technology and building multiple income streams has become a crucial ‘survival skill’ in an increasingly uncertain economy.
Savings and Investments as a Financial ‘Safety Belt’
Amid economic uncertainty, cultivating awareness of savings and investments as a financial ‘safety belt’ is crucial. Low-risk instruments such as blue-chip stocks, bonds, and gold are gaining attention for their perceived long-term stability. Bonds, often seen as a ‘retirement’ instrument, are being considered more rationally in volatile markets for their safety and consistency.
However, amid the rupiah’s weakness and a falling IHSG, saving in banks, collecting gold, and holding foreign currencies like US dollars (USD) or Singapore dollars (SGD) remain relevant for preserving asset value and financial stability. Gold is a favoured choice due to its accessibility and relative resilience against economic volatility. Digital gold savings, buying 1 gram monthly, or instalment schemes are now options for young people to start building assets.
Meanwhile, separating savings accounts from daily spending accounts is a smart move to prevent easy access to funds. Digital banks can be utilised here, typically with lower or no monthly fees to maximise savings.
Business as a Survival Path, Provided Market Understanding
Amid tough job prospects and a risky stock market, starting a business can be an alternative to survive and boost income. However, amid changing consumer patterns, young people must be more attuned to market trends before launching a business.
Data from BPS’s 2025 Susenas, processed by Mandiri Institute, shows Indonesia’s largest demographic group is the aspiring middle class—those economically between the lower class (vulnerable to poverty) and stable middle class. This group is more price-sensitive and seeks value-for-money products, while the middle class continues to shrink.
The upper class, or high-income group, remains relatively stagnant at 0.4% of the population, around 1.15 million people. Despite its small size, this group has a high willingness to pay. Further analysis reveals changes in Indonesia’s consumer structure from 2019-2025 indicating economic polarisation.
This signals that the premium segment continues to grow as the wealthy keep spending, the lower segment is large as many focus on survival, but the middle class’s purchasing power is declining. Economic polarisation is evident here. It’s no surprise that high-end restaurants, concerts, luxury brands, and premium coffee shops remain popular, while businesses targeting the middle class are weakening.
National consumption remains relatively resilient, supported by growth in the premium segment and those seeking the most economical products. Regionally, premium consumption growth is led by Southeast Sulawesi, followed by Jakarta. These national data can aid in mapping out business strategies before narrowing down the type of business and approach. Additionally, maximising technology and social media use is essential.
For financing, personal savings are no longer the only source of business capital. Funding access has expanded through bank SME loans, the Kredit Usaha Rakyat (KUR) program, and digital lending services like peer-to-peer platforms. However, using debt to build a business must be realistically assessed to ensure repayments don’t exceed the business’s income-generating capacity. With sharp analysis and effective execution, starting a business can become an additional income source.