Sharia Financial Knowledge And Financial Behavior As A Basis For Measuring Financial Literacy

Abstract

Our daily life is inseparable from financial problems. Problems in finances are more often caused by errors in management, as well as errors in distinguishing between needs and wants. One of the reasons for the number of poor people in Medan City is their lack of ability to manage their finances to meet their daily needs. The level of public financial literacy will also provide benefits to the financial sector, especially those directly related to the public's contribution to the use of financial products and services. The conventional financial system approach is very different from the Islamic financial system or what is commonly referred to as Islamic finance. This study aims to analyze the level of knowledge of Islamic finance, and financial behavior, and also analyze the effect of knowledge of Islamic finance on financial behavior and the level of Islamic financial literacy of members of the Muhammadiyah organization in Medan City. This type of research is quantitative research with the method of deduction. Research is included in the type of correlational research. Data The population in this study is a large Muhammadiyah family in the city of Medan with the sampling process using the purposive sampling method. Data sourced from respondents was obtained through questionnaires. This research uses SEM (Structural Equation Modeling) analysis tool. The results showed that in general the level of Islamic financial knowledge of Muhammadiyah members was low, but financial behavior was good. The behavior and knowledge of members' Islamic finance show a positive and significant correlation. At the literacy level, the results show that members of the Muhammadiyah organization are generally classified as less literate.