The Influence of Financial Literacy Towards Financial Management and Its Impact on Family Welfare

Abstract

Based on survey from Indonesian Financial Services Authority, the number of people considered well literate of financial literacy in Indonesia is 21.84%. Further data showed that financial literacy rate of housewives in Indonesia is 2.13%. This bring concerns considered that in managing the family money, housewives played significant role that will affect the family condition. This research is created using quantitative method to further study how financial literacy influences financial management of housewives and family welfare; and how financial management of housewives influences family welfare. The population were housewive of Islamic Community in Jakarta, ages between 18-60 years old. There were 200 respondents, selected by using purposive sampling. Data are gathered by using questionnaire which consists of 19 closed-ended statements, with 1-7 Likert scale. Structural Equation Modeling (SEM) is used to analyze each variable's relationship. The final result found that financial literacy has significant influence toward financial management and family welfare, and financial management has significant influence on family welfare.