A financially literate person, according to the Financial Services Authority (OJK), has knowledge of financial institutions and financial products, including the features, benefits and risks, as well as the skills to utilize financial products and services.

However, when it comes to investment, millennials allocate a mere 10 percent of their income for savings, according to William, director of marketing, communication and community development of the Indonesian Fintech Association (Aftech).

“This is a problem of paradigm. They [millennials] have income, but 90 percent of it is not allocated for savings or investment, [it is spent], for example, on lifestyle,” William said during a livestreamed media briefing on Aug. 6. 

“Financial literacy does not happen in a vacuum,” he added, indicating that addressing the country’s low level of financial literacy had to take into account how people’s allocation of resources was affected by social pressures. 

According to a Bank UOB Indonesia 2019 survey, Indonesian millennials, those aged between 21 and 39 years old, spend 50 percent of their income on a so-called “4S lifestyle”, which stands for sugar (food and beverages), skin (beauty and personal care), sun (travel and leisure) and screen (digital screen consumption).

Read also: Young people seek financial resilience in pandemic

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