Food Prices Are Rising: Which Expenses Should You Cut First?

For many households, financial pressure does not begin with a pay cut.

It can start when everyday expenses rise faster than a family's ability to increase its income.

That dynamic is becoming visible in some Indonesian food prices.

According to Indonesia's Ministry of Trade price-monitoring system, the national average price of premium rice was Rp15,546 per kilogram in early August 2026. By September 4, it was around Rp15,621 per kilogram.

Chicken prices moved more sharply. The national average rose from about Rp38,408 per kilogram in early August to Rp40,978 a month later.

Meanwhile, Statistics Indonesia reported that the country's average employee wage was Rp3.39 million per month in May 2026.

That was actually 3.08% higher than in February, meaning wages were not literally stagnant.

But a modest increase in average wages does not necessarily prevent households from feeling squeezed when food, transportation and other essential costs rise at the same time.

So when monthly cash flow becomes tight, what should be cut first?

Start With Flexibility, Not Essentials

The most important budgeting decision is not how much to cut.

It is deciding what should be protected.

Housing, staple food, electricity, healthcare, work-related transportation, education and required debt payments are fundamentally different from entertainment, frequent restaurant meals, vacations or upgrading a phone because a newer model has appeared.

When cash is tight, flexible lifestyle spending is usually the first area worth reviewing.

This does not mean eliminating every enjoyable expense.

It means identifying spending that can be reduced without damaging health, employment or basic quality of life.

Small Recurring Expenses Can Become Large

A single coffee, food delivery order or streaming subscription rarely destroys a household budget.

Repeated spending is the bigger issue.

Someone may be paying for several digital subscriptions while actively using only one.

Eating out three or four times a week may not seem particularly expensive per transaction, but the monthly total can be very different from cooking at home.

The same applies to promotional shopping.

Buying a product at a 40% discount is not a saving if the purchase would never have happened without the promotion.

When purchasing power is under pressure, avoiding an unnecessary transaction can be more valuable than finding the biggest discount.

Separate Obligations, Needs and Wants

One practical way to review a budget is to divide spending by priority.

The highest-priority group contains obligations that are difficult or costly to avoid: rent or mortgage payments, utilities, education costs, required loan payments and essential healthcare.

The second category includes necessary expenses whose amount can still be adjusted.

Food is essential, but preparing meals at home may cost less than ordering food repeatedly.

Transportation is essential for many workers, but there may be room to use public transportation, carpooling or other lower-cost alternatives.

The final category is discretionary spending.

Entertainment, new gadgets, frequent social outings, vacations and non-essential shopping usually offer the greatest flexibility when a household needs to reduce spending quickly.

The 50/30/20 Rule Is a Guide, Not a Test

The popular 50/30/20 framework allocates roughly 50% of income to needs, 30% to wants and 20% to savings or investments.

Bank Indonesia includes the framework in its financial-education materials.

But the percentages are not universal.

A worker whose housing, food and transportation already consume 65% or 70% of income cannot simply force essential spending down to 50%.

The useful idea behind the framework is prioritization.

When essential costs temporarily take a larger share of income, discretionary spending should generally absorb more of the adjustment.

The objective is not to achieve a perfect ratio.

The objective is to keep total spending sustainable.

Protect an Emergency Buffer

When money becomes tight, people often debate whether they should keep investing.

Before that question, it may be more important to ask whether they have enough liquid savings for an emergency.

Emergency funds are designed for events that cannot be scheduled: medical expenses, job loss, urgent home repairs or family emergencies.

Indonesia's Financial Services Authority has emphasized emergency savings as an important financial priority, while Bank Indonesia has also encouraged people to maintain reserves that can cover several months of essential spending.

A household with investments but no accessible cash can be forced to sell assets at a bad time or borrow when an emergency occurs.

For that reason, building liquidity may be more important than maximizing investment contributions when cash flow is already under stress.

Investing Does Not Always Have to Stop

A tighter budget does not automatically require abandoning long-term investing.

If essential expenses, debt obligations and emergency reserves are covered, investing can continue.

The contribution may simply need to be smaller.

For example, someone who previously invested Rp1 million each month might temporarily reduce that amount if food and transportation costs have increased.

That is different from using debt to maintain an unrealistic investment target.

Money needed for next month's living expenses should generally not be placed in volatile assets merely to preserve an investing routine.

Long-term wealth matters, but so does surviving short-term financial stress without taking on expensive debt.

Review Debt Before It Becomes a Crisis

Rising essential costs become especially difficult for households already carrying significant monthly debt payments.

If repayments are becoming unmanageable, early action is usually better than waiting until payments are missed.

Depending on the type of loan and lender, borrowers may be able to discuss restructuring or changes to the repayment schedule.

Any restructuring should be evaluated carefully because a lower monthly payment can sometimes mean a longer repayment period and higher total costs.

What should generally be avoided is repeatedly taking new consumer debt simply to pay older obligations without addressing the underlying cash-flow problem.

Audit the Last 30 Days

Many people know they should spend less but do not know exactly where the money is going.

A simple one-month transaction audit can solve that problem.

Review bank statements, e-wallet transactions and credit-card spending.

Classify expenses into essential obligations, flexible needs, discretionary purchases, debt, savings and investments.

The result may be surprising.

Financial leakage often comes from dozens of small purchases rather than one major expense.

Once the pattern is visible, spending cuts can be targeted instead of random.

There Is a Limit to Cutting Expenses

Personal-finance advice can sometimes oversimplify financial stress by focusing only on lifestyle spending.

There is a point where further cuts are no longer realistic.

If a household has already minimized entertainment, optimized food and transportation costs, and still cannot cover essential expenses, the problem may be insufficient income rather than excessive consumption.

At that stage, improving earnings becomes important.

That can mean additional work, freelance income, upgrading skills or looking for higher-paying employment where possible.

Not everyone has equal access to those opportunities, and financial advice should acknowledge that reality.

A household whose basic expenses consume almost all income faces a different challenge from someone whose budget is being overwhelmed by discretionary spending.

So What Should Be Cut First?

Start with spending that can disappear without threatening basic living standards.

Unused subscriptions, impulse purchases, frequent dining out, entertainment spending, unnecessary gadget upgrades and postponable vacations are usually easier to reduce than food, housing or healthcare.

Next, look for ways to make flexible necessities more efficient.

Cook more meals at home, compare transportation options and review recurring bills.

Maintain an emergency buffer whenever possible.

Investment contributions can be reduced temporarily if the budget becomes too tight, but they do not necessarily have to disappear completely.

The goal is not extreme frugality.

It is financial resilience: making sure that rising prices or one unexpected expense do not immediately push the household into debt.

Disclaimer: This article provides general financial education and is not individualized financial planning or investment advice.