Smart Lifestyle and Financial Freedom for the Young Generation

Source: Source/Illustration jejaknesia.com

www.jejaknesia.com - In this digital era, young people face unique financial challenges: from social pressure to “look good,” to the temptation of easily accessible credit and fintech services. However, if you start implementing the right financial strategies early, you can achieve financial freedom much faster. This article provides a complete and easy-to-understand guide to help young people manage their money more wisely and safely.

What Makes Young Adults’ Finances Different?

Here are several factors that specifically affect today’s young generation:

• High temptation for consumption. Studies show that many young people in Indonesia make impulsive purchases due to social pressure and a mindset of “money is always available.”
• Low financial literacy. The financial literacy level of the Gen Z in Indonesia is recorded below 60%.
• Risks of digital financial products and online credit. Quick access to online loans is easy, but often not matched by understanding the risks.
• Time advantage as a major asset. Young people who start financial planning early have greater opportunities for growth due to the power of compounding over time.

Main Strategies for Managing Young Adults’ Finances

Below are concrete strategies you can apply starting now — simple, yet requiring consistency.

1. Create a Realistic Budget

One of the most fundamental steps: know how much money comes in and goes out each month. According to reports, allocation methods like 50/30/20 (50% needs, 30% wants, 20% savings/investments) are highly recommended.

Tips:

• Record all expenses — from morning coffee to streaming subscriptions.
• Distinguish between “needs” (food, transportation, bills) and “wants” (hangouts, luxury items).
• Prioritize at least 20% for savings or investments if possible.

2. Build an Emergency Fund

Life is full of surprises — job loss, sudden illness, or other unexpected needs. Having an emergency fund is like having an umbrella when it rains.

Ideally, the emergency fund should cover 3–6 months of expenses.

3. Start Investing as Early as Possible

One major advantage of being young is that time is on your side. The sooner you start investing, the more the “compound interest” effect will be felt.

Things to consider:

• Understand your risk tolerance — stocks, mutual funds, or gold all have different characteristics.
• Do not be tempted by “get rich quick” schemes without understanding the investment product.
• Start with a small amount if necessary, but do it consistently.

4. Avoid Uncontrolled Debt

Borrowing money is not always bad, but without a plan, it can become a trap. Studies in Indonesia show that young people often overestimate their debt repayment capacity and take loans without understanding the risks.

Tips:

• Use credit cards or loans only when truly necessary and you understand the interest and repayment methods.
• Pay debts on time and avoid letting them accumulate.
• Prioritize paying off consumer debt before making large investments.

5. Set Clear Financial Goals

Without goals, money can easily “drain” in all directions without purpose. According to Manulife Indonesia, planning from a young age brings many long-term benefits, including achieving goals, protection, and asset development.

Example goals:

• Savings to buy a car or house within 5–10 years.
• Payment for further education or specialized training.
• Achieving financial freedom or having passive income.

6. Improve Your Financial Literacy

Knowledge is the best weapon to avoid falling into unsuitable financial products. One study shows that financial literacy, social capital, and financial technology positively influence financial inclusion of students in Indonesia.

What you can do:

• Read articles, attend webinars, or listen to podcasts about personal finance.
• Learn financial terms such as inflation, risk, liquidity.
• Do not hesitate to ask questions or seek professional advice if needed.

Common Mistakes to Avoid

Even though the tips above are simple, many young people still get trapped. Avoid the following pitfalls:

• Lifestyle beyond savings capacity. Frequently buying things just because of trends or social pressure.
• Delaying investment because of “still young” or “later”. The sooner you start, the greater the benefits.
• Investing without research. Investment products that sound flashy may not match your risk profile.
• Ignoring insurance or protection. Health costs or unexpected events can deplete savings if not covered.

How to Start Right Now

Here is a simple 30-day roadmap you can start:

1. Track your expenses for one week.
2. Set one financial goal (for example: save 10% of your income each month).
3. Open a separate account for emergency savings (if you don’t have one yet).
4. Read one article or watch one video about basic investing.
5. Evaluate credit card or loan usage — do you understand interest and installments?
6. Create a monthly budget with a 50/30/20 allocation.

Being financially smart is not about having a large income today, but about consistency, discipline, and understanding how money works for you — not the other way around. For young people starting now, small steps today can yield significant results in the future. Research shows that Indonesian youth face many challenges, but also great opportunities if they can leverage time and literacy wisely.

Start with one step today — record your expenses, set one goal, and commit to saving or investing regularly. This way, you not only live for “today,” but also build a foundation for a freer and more meaningful financial life in the future.

We hope this article becomes a catalyst for positive change in your financial journey. Happy managing, keep progressing, and achieve financial freedom!

References

• Women's World Banking Institute. Empowering the Next Generation: A Path to Financial Confidence for Indonesian Youth. July 2025.
• BPS & BNI AM. Young Adult Financial Planning: Small Steps with Big Impact. 28 July 2025.
• Manulife Indonesia. 5 Important Reasons to Plan Finances from a Young Age. 19 Dec 2023.
• WGUT-Collective. A journey to understand Indonesian youth’s saving & financial habits. 15 Sep 2022.
• Thomas et al. The Impact of Financial Literacy, Social Capital, and Financial Technology on Financial Inclusion of Indonesian Students. 2024.