Lifestyle Downgrading: Are Indonesians Becoming More Selective About Their Spending?

Jakarta, CNBC Indonesia — The trend of “lifestyle downgrading”, or lowering one’s standard of living, has become a talking point on social media. More people are discussing ways to reduce their expenses, from going out less often and choosing cheaper goods to postponing purchases they consider non-essential.

For some, this change is a way to maintain their financial stability. For others, it is necessary to bring spending into line with income and rising living costs.

Lifestyle downgrading describes a shift towards a simpler or more affordable way of living. Someone who usually buys coffee at a café, for example, might switch to a cheaper option. Others may opt for a more economical vehicle, take fewer holidays or delay buying a new mobile phone because their current one is still usable.

The trend was also discussed in an opinion article published on the Ministry of Finance’s website on 12 October 2026. It said lifestyle downgrading had grown more popular on social media, alongside accounts from people adjusting their lifestyles to match their financial means.

One useful illustration can be found in the Mandiri Spending Index (MSI), published by Bank Mandiri’s Office of the Chief Economist.

The report, based on data up to 13 September 2026, shows that consumer spending is still growing, but has begun to slow. At the same time, the shares of spending allocated to several needs have shifted.

Consumer spending is still growing, but slowing

According to the Mandiri report, the consumer spending index stood at 123.5 in the second week of September 2026, slightly down from 123.6 the previous week.

The index fell by 0.05% week on week, extending its decline to four consecutive weeks.

Nevertheless, consumer spending was still higher than a year earlier. It grew by 6.3% year on year (YoY) in the second week of September, a slight slowdown from 6.4% the previous week.

Across the year to date, average spending growth in the third quarter of 2026 through the second week of September was 6.1%.

That matched the second quarter’s growth of 6.1%, but was below the first quarter’s 6.4%.

Despite the slight slowdown, third-quarter spending growth remained above the 5.4% recorded in the same period last year.

Alongside this trend, another point of interest is how people are allocating their spending.

The Mandiri report indicates that consumers are becoming more selective. Some categories are taking a larger share of spending, while others are accounting for less.

Consumers are becoming more selective

One notable change was a recovery in spending at restaurants and supermarkets in September 2026.

According to the MSI, restaurants accounted for 19.6% of total recorded spending in September, up from 19.0% in August.

The increase was greater for supermarkets: their share rose from 16.3% in August to 17.4% in September.

Together, the two categories made up 37.0% of the total spending recorded in the Mandiri report, up from 35.3% the previous month.

Their combined share therefore increased by 1.7 percentage points in a month.

This suggests that spending on everyday needs and eating out is recovering, although the combined share remained slightly below September 2025’s 37.9%.

Annual growth in spending value also showed a positive trend.

Restaurant spending rose by 5.1% YoY in September 2026, while supermarket spending increased by 4.5% YoY—a marked improvement on the same period a year earlier, when it recorded no growth.

The findings show that consumers are still spending on everyday needs and eating out, even as overall spending growth eases.

They also suggest that lifestyle changes do not necessarily lead to cuts across all categories at once.

People may spend less on some items while continuing to pay for other needs they consider more important or affordable.

This pattern is consistent with what Mandiri describes as “selective spending”, in which consumers are increasingly discerning about their priorities.

However, the larger shares for restaurants and supermarkets do not necessarily mean that everyone is spending more than before.

The figures show how spending is distributed as a proportion of total expenditure; they do not directly measure changes in the quantity of goods or services purchased.

Mobile phones and fashion account for smaller shares

As the shares allocated to restaurants and supermarkets increased, several other spending categories saw their shares fall.

One of the largest declines was in mobile phone spending.

In August 2026, mobile phones accounted for 17.6% of total consumer spending. That share fell to 16.3% in September.

A similar change was seen in household spending, whose share dropped from 8.9% to 7.9%.

Fashion’s share also declined, from 7.0% in August to 6.5% in September.

These changes are noteworthy in light of the widely discussed trend towards lifestyle downgrading.

One way people adjust their lifestyles is by reducing purchases of items they do not urgently need or delaying the replacement of goods that remain usable.

Other categories, however, gained a larger share of spending.

Electronics rose from 5.9% to 6.1%, while health spending increased from 5.5% to 5.8%.

The differences show that changes in consumer spending are not uniform. Some needs account for a greater share, while others receive less than in the previous month.

Entertainment and air travel remain under pressure

Changes in spending on entertainment and travel are also worth examining.

For some people, paid entertainment, hobbies and holidays are easier expenses to cut or postpone when trying to save.

The Mandiri report shows mixed trends in these categories.

Leisure spending rose by 0.27% week on week in the second week of September.

The increase was mainly driven by hobbies and entertainment, up 0.48%, and jewellery, up 0.22%.

However, compared with the same period a year earlier, spending on hobbies and entertainment was still down by 2.7%.

Air ticket spending also fell, declining by 4.8% year on year.

This contrasts with spending on day-to-day mobility, which continued to grow.

Fuel spending rose by 6.6% YoY, while automotive spending grew by 6.3%. Transport spending was also up 10.7% year on year.

The divergence shows that spending on travel and mobility is not moving in one direction.

Air ticket spending remains down, while expenditure on fuel and transport continues to grow.

This suggests that needs linked to everyday activity remain an important part of household spending.

Overall, lifestyle downgrading and changes in consumer spending are two developments worth considering together.

The growing discussion about lowering one’s standard of living suggests that some people are rethinking how they use their money.

Meanwhile, Mandiri’s data shows that overall spending is still growing, but consumers are becoming more selective in how they allocate it.

The share spent on restaurants and supermarkets has increased, while mobile phones, fashion and several other categories account for less.

Although the MSI does not directly measure lifestyle downgrading, changes in the composition of spending show that consumer habits are shifting.

People are not necessarily stopping spending; rather, they are becoming more selective about which needs to prioritise.