Getting a salary increase is certainly good news. But have you ever noticed that after your income goes up, the amount of money left at the end of the month remains the same or even decreases? This can happen when higher income is followed by a higher lifestyle, from eating out more frequently and subscribing to additional services to purchasing items that were previously considered unnecessary expenses.
This phenomenon is often referred to as lifestyle inflation, where spending increases as income rises. If it is not managed carefully, a salary increase does not automatically result in higher savings or a stronger financial position. Therefore, higher income needs to be accompanied by more intentional financial management.
The importance of these habits is also reflected in the Financial Services Authority's (OJK) focus on positive financial behavior. According to the 2026 National Survey on Financial Literacy and Inclusion (SNLIK), Indonesia's financial literacy index reached 69.57%, while the financial inclusion index reached 93.61%. OJK has also emphasized the importance of making sound financial decisions and developing habits such as saving and distinguishing between needs and wants.
One practical step after receiving a salary increase is to decide in advance how the additional income will be allocated. A portion can be directed toward savings or an emergency fund, while the remainder can be used for needs and wants in a balanced way. This approach allows lifestyle improvements without compromising long-term financial goals.
Ultimately, a salary increase should not only be reflected in greater spending power, but also in a stronger ability to prepare for the future. By distinguishing needs from wants, setting priorities, and consistently setting aside part of the income, a salary increase can become an opportunity to strengthen financial well-being rather than simply increase spending.
Source: OJK – LPS – BPS
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