MEASURING FINANCIAL BEHAVIOR MILLENNIAL AND GENERATION Z IN INDONESIA: ANALYSIS APPROACHED THAT ENSURE FINANCIAL RESILIENCE IN THE FACE OF POTENTIAL CRISIS

• Main Author: Maladianti, Devi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/86549
• Institution: Institut Teknologi Bandung

This study explores financial literacy, behavior and preparedness of Millennials and Gen Z in Indonesia, focus on understanding how those three factors interact with job status income allocation, debt management and digital engagement. The increasing dependency on digital financial tools is also underlined, this research purpose is to assess the extending younger generation in preparing to manage their finance for future financial security. A quantitative research design is employed, involving a sample of 219 respondents drawn from a population of 222 individuals aged 20 to 60 years old. Data were collected using a structured questionnaire and analysed using Partial Least Squares Structural Equation Modeling (PLS-SEM). This study focuses on a population sample categorized by age groups, primarily from younger individuals (Millennials and Gen Z). The majority of the sample falls within the BUMN (State-owned enterprises) and professional sectors, which may influence the financial behavior and priorities observed. A significant portion of the respondents were employees of State-Owned Enterprises (SOEs/BUMN), making up 69.9% of the sample, followed by bankers at 13.3%. Other professions included self-employed individuals (4.8%), students (4.8%), civil servants (1.2%), professionals (3.0%), and entrepreneurs (3.0%). This professional background emphasizes the importance of job status in shaping financial behavior, literacy, and preparedness among Millennials and Gen Z Several findings in this study demonstrate that financial literacy is a critical determinant of financial behavior and preparedness, particularly among Millennials and Generation Z. However, both generations have demonstrated a strong understanding of financial concepts, but this knowledge does not always translate into effective financial preparedness, especially in managing debt dan planning for long-term security. The study also highlights the perceived importance of job status in influencing income allocation though this relationship varies among individuals. Moreover, income allocation significantly impacts digital engagement, with high levels of digital tool usage present both opportunities and challenges in managing finances. The results show that job status is a critical determinant in influencing financial preparedness, especially for Millennials and Gen Z, who must be adequately prepared for their future. The large representation of respondents from BUMN and the banking sector suggests that individuals in stable job environments tend to exhibit better financial preparedness for long-term financial planning. The study concludes that tailored financial literacy programs are essential to address the unique needs of Millennials and Gen Z, particularly in the context of their digital engagement. Recommendations include enhancing financial education at all levels, developing youth-centric financial products, and promoting responsible digital financial behavior. These strategies are crucial for ensuring that younger generations are better prepared for financial stability in an increasingly digital world.