Analysis Of The Relationship Between Financial Literacy And Financial Behavior Toward Financial Distress In Generation Y And Z During Covid-19 Pandemic (Case Study Bandung)

Abstract

The world’s economic contraction in recent years is unavoidable, given the increasing number of deaths caused by Covid-19 infection. Economically, Indonesian people are unprepared to deal with the country’s economic paralysis. People of all income levels, from the poorest to the richest, are seeing income declines, implying that many previously financially secure people have become poor or were on the verge of becoming poor. As the result, the number of Indonesians making loans is growing. However, this rapid disbursement was followed by a drop-in borrowers’ compliance to pay installments. In this research, multiple linear regression was used to analyze the relationship between financial literacy and financial behavior toward financial distress in generations Y and Z. The result was financial literacy and financial behavior have a positive and moderate relationship toward financial distress. Furthermore, generations Y and Z in Bandung have a moderate level of financial literacy, and during the Covid-19 Pandemic, based on the InCharge Financial Distress/Financial WellBeing scale (IFDFW), generations Y and Z in Bandung experienced moderate financial distress.

Keywords: financial literacy, financial behavior, financial distress, IFDFW