Parent's Financial Socialization of Indonesian Millenials

Alfikalia, Alfikalia and Prima Naomi, Prima Naomi and Ayu Dwi Nindyati, Ayu Dwi Nindyati (2019) Parent's Financial Socialization of Indonesian Millenials. Parent's Financial Socialization of Indonesian Millenials (16). ISSN 978-602-5902-12-3

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Background – Indonesia was ranked two from below on financial literacy (Allianz_Press, 2017). Millennials, who born between 1980-2000, are taken larger portion of Indonesian population, estimated around 49%. Financial socialization are considered one of the important factors in developing financial literacy. Parents are considered important to study because they are the first socialization agent for their children. Purpose – The purpose of this paper is to describe the parents' financial socialization of millennials who born between 1980 - 2000. Design/methodology/approach – The research used quantitative design, using combination of online questionnaire and also paper and pencil method, adapted from Clarke, Heaton, Israelsen, dan Egget (2005) and translated into Indonesian. In this research, financial socialization is operationalized as how often father and mother respectively, modeled and taught 10 aspects of financial activities in the family, and how often the millennials themselves conducting these activities as a part of socialization, with the choice of answer ranged from never (0) to always (5). 3380 data collected from 6 provinces in Indonesia: Maluku Utara (4.3%), Nusa Tenggara Timur (16.4%), Riau (23.4%), Sumatera Barat (15.5%), DKI Jakarta (36.5%), and Gorontalo (4%). Findings – The most to the least used method of socialization are teaching (x =3.542), modeling (x =3.485), and the millennials conducting financial activities as part of socialization (x =2.932). Mothers socialized financial aspects more often compared to fathers. The rank of the most socialized to the least socialized financial aspect by parents of the millennials is as followed: 1) saving in using money and goods (x =3.623), 2) have principles in using money (x =3.612), 3) considering career opportunities in choosing job (x =3.548), 4) assessing financial situations and deciding the use of the money (x =3.491), 5) responsibilities in purchasing house and its maintenance (x =3.463), 6) budgeting (x =3.401), 7) managing taxes (x =3.269), 8) having insurance (x =3.263), 9) deciding and making investments (x =3.195), and 10) considering how to pay the installment and interest when making purchase (x =3.154). This result indicated that parents of the millennials place the importance of financial socialization at intermediate level. Research limitations – The data was taken using the combination of online questionaiere and paper and pencil, so there is no randomizationon the sample. The questionnaire measure millennials perception rather then from the parent's perspective. Future research can improve the randomization of sample and collect data from parents. Originality/value – Research on Indonesian parents' financial socialization on a grand scale in Indonesia that involving different areas in Indonesia is currently unknown, if we can not say that it is not exist. This paper will benefit academician and society at large on how Indonesian parents socialized financial aspects in life and use the result to improve other aspects of Indonesian economy. Keywords: financial socialization, parents, millennials

Item Type: Article
Subjects: L Education > L Education (General)
Divisions: Fakultas Falsafah dan Peradaban > Psikologi-S1
Depositing User: Agustin Widyaningsih
Date Deposited: 07 Mar 2023 23:11
Last Modified: 07 Mar 2023 23:11

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