The Effect of Financial Literacy on Materialism, Propensity to Debt, and Compulsive Buying

Hana Nadia; Ali Wardhana; Ika Pratiwi Simbolon; Frananda SJ

doi:10.59890/ijaeam.v4i4.203

Authors

Hana Nadia Universitas Bunda Mulia
Ali Wardhana Universitas Bunda Mulia
Ika Pratiwi Simbolon Universitas Bunda Mulia
Frananda SJ Universitas Bunda Mulia

DOI:

https://doi.org/10.59890/ijaeam.v4i4.203

Keywords:

Financial Literacy, Materialism, Propensity to Debt, Compulsive Buying

Abstract

Purpose: This study aims to analyze the influence of financial literacy on materialism, propensity to debt, and compulsive buying among working-age individuals in Indonesia. The rapid development of financial technology (fintech), coupled with changes in consumer lifestyles, has driven a shift in the public’s financial behavior. Easy access to digital financial services such as online loans and “buy now, pay later” features has the potential to increase excessive consumption, materialistic behavior, and dependence on debt if not balanced by adequate financial literacy. This study employs a quantitative approach using a survey method. Data were collected through the distribution of questionnaires to 160 respondents. Research findings indicate that financial literacy has a significant impact on materialism, propensity to debt, and compulsive buying. Individuals with high levels of financial literacy tend to have better abilities in managing finances, controlling spending, and making rational financial decisions. Additionally, good financial literacy also plays a role in curbing materialistic tendencies, reducing reliance on debt, and minimizing compulsive buying behavior driven by emotional factors. This study implies that improving financial literacy is a crucial aspect in fostering healthy and sustainable financial behavior, particularly amid the development of digital technology and the dynamics of modern lifestyles. Therefore, more intensive financial education efforts are needed so that the public can manage their finances wisely and avoid financial risks in the future

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