The Financial Balancing Act: How Lifestyle and Pocket Money Shape Student Spending in Indonesia

Abstract

The results of the 2023 OJK SNLIK survey show that the financial literacy and inclusion index of students is below the national index. This is interesting to study considering the government's efforts to increase knowledge and access to finance evenly, as well as the increasing number of students who choose to study outside their domicile so that they are required to be able to manage their personal finances. This study aims to analyze the effect of financial literacy on spending behavior, as well as present lifestyle and pocket money moderation variables. This type of research is explanatory research with a sample of 460 students from the State University of Surabaya who live in boarding houses, determined through purposive sampling based on slovin measurements. The data analysis used path analysis with SmartPLS 3.0. The results of this study showed that financial literacy has a positive effect on spending behavior. Lifestyle is proven to moderate the effect of financial literacy on spending behavior, while pocket money has no effect as a moderating variable. These findings indicate that student spending behavior is more influenced by the ability to manage finances and lifestyle patterns than the amount of pocket money they have.