Around the world, people are classified into social classes based on different factors. In Indonesia, social classes emerge due to differences in income, spending habits, and lifestyle choices.

At birth, we inherit a social status from our parents. However, this status can change and evolve over time.

For example, if you are born into a middle-class family, you initially belong to the same social class as your parents. However, as you grow older and begin working, your social class may shift. The middle class is one of the three main social classes: upper, middle, and lower class.

So, how is a person classified as upper, middle, or lower class? Let’s dive deeper into the topic!

Types of Social Classes

Social classes are broadly divided into three major categories, each with further classifications. Here’s an overview of the upper, middle, and lower classes:

1. Upper Class

The upper class consists of wealthy, highly educated individuals. Their income is more than enough to cover their daily needs, allowing them to afford a luxurious lifestyle. In addition, they often have social influence and power.

According to the World Bank, people in the upper class have a monthly expenditure of over IDR 6 million.

Examples of Upper-Class Professions:

• Company directors
• Top executives
• Business owners

Since they earn a significantly higher income, their monthly spending usually exceeds IDR 6 million.

Read: FLEXI Deposit: Flexible and Profitable Deposit

2. Middle Class

Recently, social class discussions have gone viral among Indonesian netizens. The debate was sparked by a TikTok video where a "middle-class" person showcased an expensive lifestyle, which many people felt was unrealistic.

Many netizens argued that true middle-class individuals do not typically own luxury items or have a lavish lifestyle.

So, what exactly defines the middle class?

Examples of Middle-Class Professions:

• Office workers
• Professional employees
• Entrepreneurs and small business owners

The middle class earns enough to meet their basic needs and occasionally enjoys leisure spending. Their monthly expenditure ranges from IDR 2.6 million to IDR 6 million.

The middle class is further divided into two categories:

1. Upper Middle Class
   • Able to afford basic needs and a comfortable lifestyle
   • Monthly expenses up to IDR 6 million
      
2. Lower Middle Class
   • Can meet basic needs but with limited lifestyle spending
   • Monthly expenses below IDR 2.6 million

3. Lower Class

The lower class struggles to meet even their basic needs. They do not have extra income to afford a lifestyle upgrade and often live on very limited financial resources.

Their monthly expenses range from IDR 354,000 to IDR 1 million. This group includes those living at or below the poverty line.

Read: FLEXI Deposits: A Flexible & Profitable Fixed Deposit Option

The Rise of the Middle Class in Indonesia

Indonesia has a growing middle class, and their numbers continue to increase steadily. According to data from 1993 to 2014, 80% of people who were previously in poverty moved up to a higher class. This reflects significant improvements in living standards.

The middle class has economic power. Their spending behavior makes them a key market segment, which is why many businesses target them. Since 2002, middle-class consumption has grown by 12% annually, making them the main driver of Indonesia’s economic growth.

The Future of Indonesia’s Middle Class

Currently, middle-class consumption accounts for nearly half of all household spending in Indonesia. Over the past 20 years, most low-income and vulnerable groups have moved into the aspirational middle class.

According to a World Bank report, one in five Indonesians is now considered middle class and no longer worries about poverty. There are approximately 115 million middle-class Indonesians aiming to improve their economic status.

For Indonesia to become a high-income country, the middle class needs to expand further. This includes individuals who are no longer poor but have not yet reached full middle-class status.

How to Expand the Middle Class?

To strengthen economic prosperity and reduce poverty, better access to education is essential.

• Higher-quality education leads to better job opportunities.
• Higher-paying jobs result in increased income and economic stability.

Read: How to Overcome Inflation Rates So That Finances Remain Safe and Under Control

Securing Your Financial Future with Bank Neo Commerce

While moving up the social class ladder is important, maintaining financial stability is just as crucial. Nearly 40% of middle-class individuals fall back into financial vulnerability due to poor money management.

How to Maintain Middle-Class Status?

• Work hard and increase your income
• Save and invest wisely
• Secure your savings with a trusted bank

With Bank Neo Commerce, you can grow and protect your savings through the neobank app.

• High-interest savings & fixed deposit options
• Convenient, safe, and profitable banking services

Download neobank on PlayStore and App Store now! Open a NOW Savings, WOW Deposit, or Flexi Deposit now!

For complete information and terms & conditions regarding neobank products, click the following links:

- NOW Savings: https://bit.ly/EdNOW

- WOW Time Deposit: https://bit.ly/EdWebDepositoWOW

- FLEXI Time Deposit: https://bit.ly/EdWebFLEXI

If you want to try neobank products, click the links below:

- NOW Savings: https://bit.ly/EdNabungNOW

- WOW Time Deposit: https://bit.ly/DepositoWOWEdu

- FLEXI Time Deposit: https://bit.ly/EduDepositoFLEXI

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PT Bank Neo Commerce Tbk is licensed and supervised by the Indonesia Financial Service Authority (OJK) and Bank Indonesia (BI), and an insured member of Deposit Insurance Corporation (LPS).