Spending most of the last year-and-a-half in Indonesia, where the cost of living is incredibly affordable, I experience a shock each time I return home. With prices continually rising and wages not keeping pace, it’s hard to imagine how many people manage to keep up.
Financial hardship can touch all our lives at some point, regardless of background. For some, this struggle begins in childhood, where financial constraints mean living from day to day.
When I lived in London, I ended up with around $100k of debt from an unexpected hospital bill in America while barely earning minimum wage back in the UK. Add to that the high cost of living in London, especially for accommodation, the prospect of getting out of debt seemed overwhelmingly impossible. How was I going to pay it off?
I took a very hard line and decided to make some massive cuts, budgeting to live on mere dollars per day after paying essential bills (limited to rent, phone, electricity and transport to work). I maintained this strict budget for just over four years, putting all available cash into paying off the debt. Before this, I was already living frugally due to my low wage, but it became clear that I had to sacrifice any further superfluous spending to achieve my goal of paying off the debt quickly. This meant luxuries like going out for dinner, having drinks at the bar, attending shows and travelling were on hold indefinitely. In fact, even baseline supermarket shopping was hardly more than canned lentils, tomatoes, beans and frozen vegetables during this time – every penny counted!
In addition to reducing my spending to barely anything, I took on a second job to try and cover the cost of the debt more quickly.
I had to make some pretty big adjustments, including eating before meeting friends at restaurants and just drinking water there. I arranged walks through parks, had picnics and explored local museums on free days. Instead of going out, we would play card and board games at home, host movie nights and even have potluck dinners where everyone contributed a dish. On the plus side, I couldn’t afford booze, so I drank a lot less alcohol, which had a positive impact on my mental health, too.
Interestingly, after a few months, living frugally became easy. I didn’t feel like I was missing out. I found I connected better with friends -our conversations were less superficial, relying less on alcohol to lubricate the conversation. There became a noticeable distinction between my ‘good time’ friends and deeper friendships; those who understood my financial situation and supported me without judgement.
Even after the debt was paid and I left London to return home, I continued living frugally for another three years. I rented a three-bedroom home, took the smallest room and rented out the other two for nearly the cost of the rent, enabling me to save aggressively. Each month, I saved between half and two-thirds of my wage, and within 3.5 years, I had saved enough for a house deposit, while earning not much more than minimum wage.
In order to achieve my personal goal of getting on the property ladder, I chose a house that was well below my maximum budget and had rooms I could rent out for additional income. Since it was in an area considered less desirable and needed a lot of work, I initially almost didn’t go inside as it looked so broken from the outside. However, over two years, I tirelessly renovated on a budget. Now, it’s hardly recognisable, and although it’s certainly not my dream home, I’m proud to call it mine.
Certain aspects of my situation made it easier than it might be for others: I was single, child-free, and, quite significantly, I was willing to make these sacrifices for years. I acknowledge that not everyone can or is willing to do this.
Having observed how people live on very little in Indonesia – yet remain happy, friendly and kind, sharing what little they have without considering whether others have more or less – I am reminded of how we, in the Western world, place far too much emphasis on wealth and money.
What are my three key observations?
- I could live frugally and still be happy,
- It is possible to claw your way out of debt and then move forward, and
- Observing locals in Indonesia living contentedly with very little reminded me to prioritise experiences and relationships.
That’s my journey, but of course, each of us travels a different path. If you’re trying to budget, get out of debt, or save more, why not try cost-free activities while you work out where you can cut the budget further? It’s not about depriving yourself, but about making conscious choices that align with your values and long-term goals. In our fast-paced, consumer-driven world, taking a step back to reassess our priorities can lead to a more fulfilling and balanced life. How might you simplify your spending to enhance your overall wellbeing and financial stability?
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