JMK, VOL 22, No. 2, SEPTEMBER 2020, 142–151 DOI: 10.9744/jmk.22.2.

142–151
ISSN 1411-1438 print / ISSN 2338-8234 online

THE IMPROVEMENT OF GENERATION Z FINANCIAL

WELL-BEING IN PEKANBARU

Nicholas Renaldo1*, Sudarno Sudarno2, Marice Boru Hutahuruk3

1,2
Institut Bisnis dan Teknologi Pelita Indonesia, 3STIE Prakarti Mulya, Indonesia
*Corresponding author; Email: [email protected], [email protected],
3
[email protected]

Abstract
The current economic condition of generation Z was pretty unexpected. It might trigger problems personally
or even their families. This study aimed to reveal the factors influencing the financial well-being and altering perso-
nality problems of generation Z. There were more than 800,000 peoples in population and the number of the sample
was 239 peoples using a combination of purposive and convenience sampling methods. The data was then analyzed
using multiple linear regression. The researchers used primary data by distributing questionnaires based on a Likert
Scale. All classic assumptions met the criteria and testing produced financial self-efficacy, financial attitude,
financial knowledge, financial behavior, and had a significant positive effect on financial well-being. However,
locus of control had no significant effect on financial well-being. Generation Z must increase their independence
and confidence to achieve what they want. It would be good to have financial atitude and investment behavior
along with financial knowledge. They must also believe that only theirself can provide personal well-being.
Generation Z needed character education, more mature, and independent thinking models to deal with economic
problems.

Keywords: Financial well-being, financial behavior, financial self-efficacy, financial knowledge, financial attitude.

Introduction Indonesia's economy grows by 5%, which has the

opportunity to increase the positive impact of raising
The economy is the dominant factor triggering everyone's income. However, some people cannot
people to think about living standards for the long term. manage their finances despite having high incomes.
Financial management skills are a crucial part of every They will experience problems such as being unable to
stage of life (Sabri & Zakaria, 2015). Generation Z pay their bills on time, inferiority, and missing retirement
(1995–2012) is a group facing a big challenge in making plans. It makes their economic capacity drop to the lower
financial decisions because they tend to have low middle level.
incomes and few assets; this process is their maturity The most essential factor is creativity and skills to
process. manage money as wisely as possible, to manage the
Technology continues to develop and affect every- budget, savings, and investment by maintaining their
one. Industry 5.0 is one indicator. Generation Z will economic goals. But, some young people are lack of
certainly go with this flow and influence its economic knowledge about finances so it worsens their financial
factors. It is the impact of their lifestyle who like to gather implementation (Susan, 2018).
with friends, shop online, vacation, or enjoy year-end Generation Z seems so realistic and competitive.
leave. To fulfill these things, they certainly require a The way they deal with life is different compared to the
large fee. generation of baby boomers (1946–1960), X (1961–
It is serious since it may worsen the level of 1980), and Y or Millennial (1981–1944), who prefer
economy and lifestyle, which will also induce well- safety zones based on their experience.
being. Based on a survey of generation Z, most of them Serido, Shim, and Tang (2013) said financial self-
work while in college and they tend to be mediocre in efficacy has a positive and significant effect on financial
responding to their financial well-being. Those who well-being. Sabri and Zakaria (2015) in a study of
already have work experience should better understand behavior effect on financial well-being, found a signi-
the financial situation and the future. The pre-survey ficant positive effect. However, the conclusion is
shows 32% of generation Z are not worried too much contrary to the research study of Abdullah, Sabri, and
about financial situations. Arif (2019), which explicated positive and insignificant

142
 Renaldo: The Improvement of Generation Z Finansial Well-Being 143

consequences. Falahati and Sabri (2015) proved that Furthermore, this is also related to the way individuals
financial knowledge had a positive and significant effect manage and use financial resources. These measures
on financial well-being. Research on the locus of control include (1) expenses, (2) bill payments, (3) financial
by Mokhtar and Rahim (2016) presented a significant- planning, (4) money for personal and family, and (5)
positive effect on financial well-being but it contradicts savings (Arifin, 2018).
a study of Mokhtar and Rahim (2017). When examining There are three determinants of theory of planned
financial behavior, Mokhtar and Husniyah (2017) con- behavior, namely (1) behavioral beliefs, the results
cluded there was a significant and positive impact on fi- obtained, and evaluation of results, (2) normative beliefs,
nancial well-being. to achieve normative expectations shared with others,
Theory of planned behavior (TPB) deals with and (3) belief control, namely the existence of things
rational actions and the assumption of human’s behavior supporting or hindering the behavior to emerge, and how
based on logic. They also reflect information and, direc- strong the support or resistance (Arifin, 2018).
tly or indirectly, calculate the impact of their actions. Rational behavior theory affirms when an indi-
According to the theory of rational action, an individual vidual feels an action will generate a positive thing for
will act if he considers it positive and thinks other people him, and then he will take it, or because others want to
will do so (Arifin, 2017). do it. Individual actions are influenced by two basic
Generation Z who have worked basically has factors, attitudes originating from behavioral beliefs and
mature thoughts to manage their finances. This low level subjective norms from normative beliefs (Arifin, 2017).
of welfare will disrupt their lives and should be dealt with Some literature explains financial behavior and
immediately. management can change the financial situation. Personal
Based on the explanation above, research, and financial practices such as cash management, credit
theoretical gaps, it is necessary to discuss more deeply management, budgeting, financial planning, and general
about how to improve well-being of generation Z in
fund management greatly have (Sabri et al., 2013).
Pekanbaru. The problems in this study include the
factors influencing financial well-being in generation Z
Locus of Control
in Pekanbaru City.

Financial Well-Being It underlines the problem of one's thinking in

controlling situations that affect him. This factor holds
Financial well-being refers to the health of financial internal and external dimensions. Those who have an
status, happiness, and peace of mind based on subjective internal locus of control are always motivated by
judgment. Satisfaction with financial conditions is often tenacity, while external locus of control entices
considered as a sign to measure the financial situation individuals to think that aspects outside themselves, such
(Sabri, Paim, Falahati, & Masud, 2013). as luck, opportunity, and destiny influence their lives
Financial well-being serves as a determinant of life (Mien & Thao, 2015).
quality. For example, when an economic recession Locus of control can be interpreted as a person's
strikes and causes economic problems, every victim will perspective on an event whether he can or cannot control
certainly be worried and thinking about health, income, the events that occur to him. Locus of control consists of
debt, and career. That concern affects mental health, two constructs, namely internal and external, where if
physical, self-confidence, and work performances. In someone believes that what happens is always within his
addition, it generally triggers employees to work late and control and always takes a responsible role in every
disrupt their concentration (Sabri & Zakaria, 2015).
decision including internal locus of control, while
someone who believes that events in his life are beyond
Financial Behavior
its control is included in the external locus of control
Financial behavior is closely associated with finan- (Fitra, Rasyid, & Susanti, 2018).
cial management and is liable for managing personal Locus of control is also a psychological variable
finances. This is a union of cash flow management, cre- with certain tendencies. Every individual has two types
dit management, and investment. Financial management of tendencies: internal and external. People with an
focuses on effectiveness such as determining the budget internal locus of control have better financial behavior
and debt value. The control of money and savings ex- than those with an external locus of control (Arifin,
penditures is generally a benchmark of judgment. 2017).
144 JURNAL MANAJEMEN DAN KEWIRAUSAHAAN, VOL. 22, NO. 2, SEPTEMBER 2020, pp. 142–151

Financial or Money Attitude insurance, credit, taxes, and investment. Each individual
has financial knowledge depending on their knowledge
Individuals' perspectives on the use of money capacity and can be guided by an understanding of (1)
ascertain their personality and management style. The interest rates, financial costs and credit, (2) credit rates
tendency of their attitudes applies subjectively to act on and credit data, (3) financial management, (4) in-
gains or losses (Susan, 2018). vestment, and (5) credit report (Arifin, 2018).
In the materialist world, money is not only a The term financial knowledge is defined as
medium of exchange but also a device for achieving sufficient knowledge about facts about personal finances
happiness and prosperity. Money itself has iconic values, (Mien & Thao, 2015). Financial knowledge is the ability
such as: status, respect, freedom, and luxury. Materialists to understand, analyze, and manage finances. The inten-
are commonly obsessed with money often feeling satis- tion is to create the best financial decisions and avoid
fied with their financial condition because they can financial problems. A person's financial knowledge
realize their ideals. It means well-being of individuals requires developing financial skills and learning to use
depends on their life aspirations (Sabri & Zakaria, 2015). financial tools, such as preparing a budget, investment,
Financial attitude is a key factor in arranging finan- and insurance plan. This knowledge can be from scho-
cial success or failure. It also possesses psychological ols, seminars, training, and non-formal education.
tendencies, which generally appear with a like or dislike
attitude. Individuals will expose their expressions and Financial Self-Efficacy
decide to agree or reject a matter. It shows the level of
intelligence of individuals in managing their finances. Self-efficacy is an individual's belief with his ability
When they have a lot of money, their awareness and res- to set a series of actions to achieve ambitions. The term
ponsibilities also increase, and positively affect financial also denotes someone's belief in changing financial
behavior (Arifin, 2018). behavior for the better. It is a vital component in Ban-
Financial attitude can also mean a person's mindset, dura's social cognitive theory that emphasizes the matter
opinion, and judgment about finance. There are at least of one's confidence in completing his responsibility. This
three interdependent variables, based on the theory of ability can help individuals to define achievement be-
social learning, namely behavior, environment, and cause they view difficult tasks as a challenge. They have
events affecting perception and action. The event can be a strong desire and commitment to success. For this
in the form of financial attitudes and good management reason, financial independence benefits to act and
behavior starting from the application of good and rea- change financial behavior (Herawati, Candiasa, Yad-
sonable financial attitudes (Ameliawati & Setiyani, nyana, & Suharsono, 2018).
2018). Perceived control and self-efficacy related to the
two constructs are conceptually different. Self-efficacy
Financial Knowledge is proportional to personal ability, whereas control of
behavior is similar to the locus of control; causal beliefs
There are two main aspects of the financial know- about contingencies resulting from actions. Self-efficacy
ledge environment. This is relevant to the ability of influences the process of facing challenges, how much
respondents to apply general financial knowledge or force expended, how long to survive in facing obstacles
special finance system as an equation of financial and failures, and an indication that failure motivates or
knowledge. to measure it, first, at least four aspects are discourages the spirit. Hence, one's ability in financial
needed, such as personal financial knowledge, general behavior contributes to individual performance (Serido,
financial knowledge, investment, financial planning, and Shim, & Tang, 2013).
taxation. The scale of knowledge itself includes skills, According to Faique et al. (2017), individuals with
information related to deposits and debits, insurance and high self-efficacy are more likely to try some projects to
investment projects, as well as financial information. develop their positive attitude. Conversely, if individuals
The second is through the assessment of one's own have low self-efficacy, they tend to develop negative
knowledge. This principle is useful as an evaluation attitudes towards these actions.
instrument (Susan, 2018).
Financial behavior requires financial knowledge. It Hypothesis
may trigger the formation of good ideas that are useful in
society. This literacy includes banking, savings, The hypotheses in this study are as follows:
 Renaldo: The Improvement of Generation Z Finansial Well-Being 145

H1: Financial self-efficacy has a significant positive Table 1

influence on financial well-being. Research Variable Indicators
H2: Financial attitude has a significant positive in- Attribute Indicator References
fluence on financial well-being. Financial Attitude
FA1 I compare credit options before (Potrich, Vieira, &
H3: Financial knowledge has a significant positive applying for installment Kirch, 2015)
influence on financial well-being. FA2 I invest regularly
H4: Financial behavior has a significant positive FA3 I am responsible for my financial well- (Susan, 2018)
being
influence on financial well-being. FA4 I asked if I could get the same item at a (Ali, Rahman, &
H5: Locus of control has a significant positive influence lower price after buying Bakar, 2013)
on financial well-being. FA5 I imagine how to manage money well
Financial Behavior
FB1 I have a reserve fund (Potrich et al., 2015)
Research Framework FB2 I analyze finances before making a
large purchase
FB3 I save money every month for future (Potrich, Vieira, &
To explain the impact of variables, the research needs Mendes-Da-Silva,
framework is as follows: 2016)
FB4 I make a plan to achieve financial goals (Susan, 2018)
FB5 I buy bonds, stocks or mutual funds (Mien &
Financial
Thao, 2015)
Self-Efficacy
Financial Knowledge
H1 FK1 I understand interest rates, financial (Susan, 2018)
H4 Financial
Behavior costs, and credit terms
H2 FK2 I understand investment returns and
Financial Financial
Attitude Well-Being risks
FK3 I understand how to minimize risk in
H3 Locus of investments
H5 FK4 Purchasing power decreases when (Ali et al., 2013)
Control
Financial inflation increases
Knowledge FK5 I understand financial concepts such as (Kumar, Watung,
money management, investment, and Eunike,
Figure 1. The conceptual research framework budgeting & Luinata, 2017)
Internal Locus of Control
IL1 Saving and investing carefully is a key (Pinjisakikool, 2017)
Research Methods factor for getting rich
IL2 I get rich or not depends largely on my
This research study is descriptive with a quanti- ability
IL3 When I get what I want, it's usually
tative approach using survey methods. Surveys are because I work hard
systems for gathering information from or about people IL4 My life is depending on my actions
to describe, compare, or explain their knowledge, atti- IL5 Being rich has nothing to do with luck
tudes, and behavior (Sekaran & Bougie, 2016). Financial Well-Being
FW1 I have a healthy financial condition (Delafrooz & Paim,
The researchers used a survey, questionnaires, and FW2 I am comfortable dealing with the 2011a, 2011b)
Likert scale methods to determine data and samples. The financial situation
population was more than 800,000 peoples (generation FW3 I am confident in controlling personal
finances
Z of 18–25 years). According to (Bujang, Sa'at, & Sidik, FW4 I am satisfied with my overall financial
2017), the minimum number of samples for the six situation
variables tested using multiple regression analysis was FW5 I deserve an emergency benefit
130. From 263 questionnaires, researchers only took 239 Financial Self-Efficacy
FS1 I can always overcome difficult (Lown, 2011)
samples using purposive sampling and convenience problems if I try hard
sampling methods. Questionnaire recipient respondents FS2 I stick to spending plans when
are people in Pekanbaru City, which includes generation unexpected expenses arise
FS3 I am challenged to make progress
Z and at least graduate from high school or equivalent. towards financial goals
Indicators of each variable must be elaborated to FS4 I can find a way to get what I want (Schwarzer &
find out the indicators forming latent variables. Indi- Jerusalem, 1995)
FS5 I feel confident in my ability to manage (Serido, Shim,
cators of each variable are listed in Table 1. my finances & Tang, 2013)
146 JURNAL MANAJEMEN DAN KEWIRAUSAHAAN, VOL. 22, NO. 2, SEPTEMBER 2020, pp. 142–151

Data Analysis Technique Results and Discussion

Descriptive Analysis Descriptive Statistics

This descriptive analysis explains the discussion of The age of most respondents was 20 years (35.9%).
respondent characteristics related to respondent res- The number of male respondents was 59%. 56.6% of
ponses. Analysis of respondents' characteristics consist- respondents were part-time workers, 14.3% of respon-
ed of age, sex, marital status, employment, home owner- dents as entrepreneurs and the remaining of 11.6% also
ship status, ethnicity, religion, income, fund placement, worked part-time. 65.7% of respondents lived in parents'
and primary and secondary financial socialization homes. 74.9% of respondents were Chinese. The
agents. The subsequent analysis used a model and ana- majority of them were Buddhist (66.9%) and Protestant
lysis of respondent responses containing a discussion of Christians (16.7%). The average respondent had been
respondent responses related to the characteristics of working for less than five years. 91.6% of respondents
have income below IDR 5,000,000. 37.7% of res-
respondents using the ANOVA method.
pondents learned financially from primary socialization
agents (31.4% from parents) and the rest from secondary
Questionnaire Eligibility Test
agents (schools by 27.3%). Regarding financial mana-
The researcher first tested the primary data before gement, 66.8% of respondents preferred saving funds in
the influence test. Validity shows the data quality cover- banks.
ing the actual area of investigation. One important item
in validity is loading factor above 0.40, which is the Analysis of Answers to Respondent Characteristics
minimum value suggested in the study. The second test The financial self-efficacy variable got a variety of
was reliability involving the extent to which the mea- responses depending on ethnicity, income, and secon-
surement of a phenomenon provided stable and consis- dary socialization agents. Respondents from other ethnic
tent results. The Cronbach’s Alpha coefficient is the groups and Minang Tribe gave a higher score than the
most commonly used measure of consistency. Reliabi- Nias ethnic group and respondents who did not answer.
lity is recommended equally to or above 0.60 (Taher- Respondents with an income of more than IDR 10
doost, 2016). million gave a higher score than those whose income
was around IDR 5 to 10 million. Respondents who
Classical Assumption of Multiple Linear Regressions learned financially from print media scored higher than
respondents who did not have secondary agents.
There are some assumptions of multiple linear The financial attitude variable accepted different
regression (Lind, Marchal, & Wathen, 2017), namely respondents' responses depending on marital status,
linear, homoscedasticity, distribution of residuals ethnicity, and income. Unmarried respondents scored
following a normal distribution, no multicollinearity, higher than those who were divorced. Respondents from
and no autocorrelation. All tests in this analysis applied other and Batak Tribe presented higher scores than Nias
Microsoft Excel and SPSS applications. Tribe. Respondents whose income was over IDR 10
million gave a higher score than those whose income
Analysis of Multiple Linear Regression Equations was IDR 5 to 10 million and respondents who did not
answer.
Multiple linear regression has ordinarily been The financial knowledge variable had different
utilized as a statistical tool to predict the dependent respondents' responses based on gender. Male respon-
variables based on a set of predictors (Bujang et al., dents gave higher scores than women; especially on the
2017). indicator, "I understand how to minimize risk in invest-
ments.”
Hypothesis Test Financial behavior variables, in general, did not
obtain differences in respondent responses. However, on
Hypothesis testing used the SPSS program. If the the indicator "I buy bonds, stocks, or mutual funds,”
value of Sig < α, there is the independent variables respondents who liked to put funds in securities gave a
significantly influence the dependent variable. higher score than those who put funds in digital assets.
 Renaldo: The Improvement of Generation Z Finansial Well-Being 147

Respondents generally responded locus of control Table 3

variables differently. However, the indicator "When I get Test Results of Classical Assumptions and Multiple Linear
what I want, usually because I work hard" received Regressions
many different responses, especially based on gender, Variable B t Sig. VIF Sig. 2
employment, and ethnicity. Female respondents gave a (Constant) 0.789 2.729 0.007
higher score than men. Respondents who had not gotten FSE 0.145 2.149 0.033 1.466 0.385
jobs gave a higher score than unemployment. Respon- FA 0.117 1.700 0.091 1.720 0.141
FK 0.097 1.769 0.078 1.158 0.095
dents from other and Batak Tribe gave higher scores than FB 0.274 4.206 0.000 1.629 0.577
Nias Tribe and respondents who did not answer. LC 0.102 1.519 0.130 1.540 0.304
The financial well-being variable got different
responses in terms of work, and the respondent's Adjusted
0.302
R Square Sig.3 0.067
revenues. Respondents who had not worked provided a F Test 21.643
higher score than respondents who worked part-time. F Sig. 0.000 Sig.4 0.187
Respondents whose income was higher than IDR 5 to
IDR 15 million gave a higher score than those whose Explanation:
1. F Sig. < 0,05 = Good Model (Linearity)
income was above IDR 15 million and respondents who 2. VIF ≤ 5 = Moderately correlated (Daoud, 2017)
did not provide answers. 3. Sig.2 = Sig. of Glejser Test > 0,05 = No Heteroscedasticity
(Nwakuya &Nwabueze, 2018)
Table 2 4. Sig.3 = Sig. of Shapiro-Wilk Test > 0,05 = Normally Distributed
Validity and Reliability Test Results Data (Razali & Yap, 2011)
5. Sig.4 = Sig. of Runs Test > 0,05 = No Autocorrelation (Uyanto,
Indicator Pearson Correlation Cronbach's Alpha 2020)
FSE1 0.797*** 0.803
FSE2 0.645***
FSE3 0.790*** Based on Table 3, the classic assumptions of multi-
FSE4 0.777*** ple regressions such as normality, multicollinearity,
FSE5 0.739*** autocorrelation, and heteroscedasticity meet the require-
FA1 0.674*** 0.625 ments. F value of Sig. below 0.05, the research model is
FA2 0.192***
FA3 0.718***
good. The highest VIF value is 1.720 (still below 5), so
FA4 0.663*** there is no multicollinearity (Daoud, 2017). The lowest
FA5 0.769*** Sig. of Glejser Test value is 0.095 (above 0.05), so there
FK1 0.710*** 0.803 is no heteroscedasticity (Nwakuya & Nwabueze, 2018).
FK2 0.845*** Sig. of Shapiro-Wilk Test produces values above 0.05.
FK3 0.835***
FK4 0.646*** Hence, the distribution of residuals is classified as
FK5 0.708*** normal (Razali & Yap, 2011). Sig. of Run Test is 0.187
FB1 0.746*** 0.715 (above 0.05), so there is no autocorrelation (Uyanto,
FB2 0.772*** 2020).
FB3 0.792*** Adjusted R Square (used if the independent varia-
FB4 0.807***
FB5 0.246*** ble is more than 2) explains how much influence the
LC1 0.668*** 0.696 independent variable has on the dependent variable. All
LC2 0.748*** independent variables affect 30.2% (weak) on financial
LC3 0.758*** well-being while the rest is influenced by other factors.
LC4 0.773*** Based on these data, the regression model is as follows:
LC5 0.516***
FW1 0.730*** 0.800 Financial Well-Being = 0.789 + 0,145 Financial Self-
FW2 0.734***
FW3 0.826***
Efficacy + 0.117 Financial Attitude + 0.097
FW4 0.783*** Financial Knowledge + 0.274 Financial Behaviors +
FW5 0.659*** 0.102 Locus of Control + e
*** Significant at 1%
Hypothesis Testing
Table 2 shows testing the validity of using Pearson
correlation producing 1% significance for all indicators. Testing using SPSS produces the effect of each
For reliability testing with Cronbach's Alpha, the lowest variable. It also describes the research hypothesis testing.
value is 0.625 and meets the requirements above 0.6. Hypothesis 1: Financial self-efficacy has a signi-
The next stage of analysis is the classic assumption of ficant positive effect on financial well-being (5%);
multiple regression analysis. hypothesis 1 is accepted. Hypothesis 2: there is a positive
148 JURNAL MANAJEMEN DAN KEWIRAUSAHAAN, VOL. 22, NO. 2, SEPTEMBER 2020, pp. 142–151

and significant influence of financial attitude on financial make smart financial decisions and avoid spending more
well-being (10%); hypothesis 2 is accepted. Hypothesis than they can get and help their financial well-being.
3: there is a positive influence of financial knowledge on
financial well-being (10%). Hypothesis 3 is accepted. Influence of Financial Knowledge on Financial Well-
Hypothesis 4: financial behavior has a positive and Being
significant influence on financial well-being (1%);
Financial knowledge influences financial well-
hypothesis 4 is accepted. On the other hand, Hypothesis
5: the positive influence of locus of control on financial being significantly and positively. The main cause is that
well-being is not significant, so it is rejected. generation Z pays attention to its financial well-being
and wants to increase its financial knowledge for finan-
Discussion cial freedom. This conclusion is directly proportional to
the study of Falahati and Sabri (2015) and Lee, Park, and
Heo (2019). Generation Z understands financial con-
Influence of Financial Self-Efficacy on Financial
cepts such as money management, investment, and bud-
Well-Being
geting. Therefore, they can minimize investment risk by
The positive influence of financial self-efficacy on learning from someone successful. Understanding of
financial well-being is significant because financial well- inflation also can help them to manage finances better in
being rises with increasing financial independence. This the future. A person with a high level of financial know-
is in line with the study (Serido, Shim, & Tang, 2013) ledge will have the ability to understand and analyze
and (Heo, Saboe-Wounded Head, Cho, & Lee, 2018). financial options, plan their financial future, and respond
When they are confident in their capacity to manage fi- appropriately according to the various financial situa-
nances, they are satisfied with their financial situation. tions encountered.
Someone who succeeds to find a way to achieve what
Influence of Financial Behavior on Financial Well-
they want with his maximum performance will be more
Being
confident in managing finances. How much effort
should be extended in these efforts, how long to survive Moreover, financial behavior is proven to influence
in the face of obstacles and failures, and whether the financial well-being positively and significantly because
failure is motivating or discouraging to achieve financial good habits produce good thinking. Delafrooz and Paim
well-being. (2011a, 2011b), Mokhtar and Rahim (2017), Mokhtar
and Rahim (2016), Sabri and Falahati (2003), Sabri et al.
Influence of Financial Attitude on Financial Well- (2013), and Serido, Shim, and Tang (2013) agreed with
Being this. Good financial management practices support
financial well-being. Parents or teachers have a vital role
Financial attitude positively and signifycantly by teaching the habit of saving money every month for
influences financial well-being because generation Z has future needs. After realizing the sufficient funds, some-
great enthusiasm for investing. Invest regularly is the key one can control their funds for business, consequently
factor. The results are similar studies as done by Falahati making them more prosperous. They also need to
and Sabri (2015), Sabri and Zakaria (2015), and Zulfiqar analyze their budget before making a large purchase.
and Bilal (2016), but they conflict with done by Practicing better financial behavior and worrying about
Abdullah et al. (2019). By good financial management, financial planning are more likely to achieve a higher
they understand well the process of financial manage- level of financial well-being.
ment. Abdullah et al. (2019) argued an individual with a
positive attitude towards money such as retention, inade- Influence of Locus of Control on Financial Well-
quacy, and effort/ability can help young workers manage Being
their money wisely. Also Sabri and Zakaria (2015) On the other hand, locus of control does not
emphasized the positive attitude towards money to help influence the financial well-being. This is because gene-
them be more careful in spending money. This is part of ration Z prefers instant ways to achieve financial
long-term thinking about planning for future financial prosperity. This was also proven by research of Mokhtar
needs. The ability to manage money is important so that and Rahim (2017). Mokhtar and Rahim (2016) had
money can be planned well. The ability to plan money different opinions. From the descriptive side, overall
or a budget is important because it will allow a person to there is no significant difference in the characteristics of
 Renaldo: The Improvement of Generation Z Finansial Well-Being 149

respondents in the locus of control. Everyone must be The weakness of this study is the variable is limited
responsible for his or her conditions. In fact, generation to what is commonly used in human resource mana-
Z cannot do it due to many factors, such as the family's gement research. Future research is expected to utilize a
economic status, and those who are already working will more diverse number of samples and interdisciplinary
deposit funds for the needs of their parents. Even in such variables to strengthen hypotheses.
conditions, they still must be able to save and invest
carefully. They must adopt the best financial practices, References
such as budgeting, savings, financial planning, and
Abdullah, N., Sabri, M, F., & Arif, A. M. M. (2019). The
paying bills on time, to improve financial well-being. relationship between attitude towards money,
financial literacy and debt management with young
Conclusion and Implication worker’s financial well-being. Pertanika Journal
of Social Sciences and Humanities, 27(1), 361–
Conclusions
378.
This study aims to observe the factors affecting the Ali, A., Rahman, M. S. A., & Bakar, A. (2013). Financial
financial well-being of generation Z. The results of the literacy and satisfaction in Malaysia: A pilot study.
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significant influence of financial knowledge on financial Ameliawati, M., & Setiyani, R. (2018). The Influence of
financial attitude, financial socialization, and finan-
well-being, and significant influence of financial behavi-
cial experience to financial management behavior
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with financial literacy as the mediation variable.
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