FINANCIAL BEHAVIOR, FINANCIAL LITERACY, AND LOCUS OF CONTROL DURING THE COVID-19 PANDEMIC

• Main Author: Vitriani, Fatima
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/57742
• Institution: Institut Teknologi Bandung

COVID-19 has become a severe issue among us. This virus is paralyzing all the sectors globally; one can witness its severe negative impact on all life aspects. As we all know, during the early days when the pandemic attacked us, there was much news about many employers got unemployed, or we heard about businesses shutting down, having to make people stay at home more often, which makes people experience a decrease in their income, or worse, unemployed. The phenomenon makes people have a hard time increasing or maintaining their money. This study aims to determine the difference in people’s financial behavior before and during the COVID-19 pandemic. Furthermore, this study wants to determine the relationship between financial literacy, internal and external locus of control, and financial behavior during the COVID-19 pandemic. This study used a questionnaire-based survey distributed to people currently living in Indonesia with the age of 17 and above through an online platform. Results showed that there is no significant difference between financial behavior before COVID-19 during COVID-19 pandemic overall. However, if we look at the questions in detail, several aspects show a significant difference: how people create a budget per month due to the crisis, how people save money, and how people save money for long-term goals. Our study also finds a positive relationship between financial behavior, financial literacy, and locus of control before a pandemic. Furthermore, other than those two factors, external locus of control also resulted in a positive relationship with financial behavior during the pandemic. This significant difference of external locus of control during the pandemic is interpreted that people believe in their effort or other internal factors during the pandemic. Still, several factors change their financial behavior. For instance, people become more spiritual and trust discretion more towards their financial condition.