Comparison of the Effects of Financial Literacy on the Financial Behavior of Civil Servants and Private Employees at Millennial Age

This study aims to determine the effect of financial literacy on materialism, compulsive buying, indebtedness, and saving behavior. In addition, it determines the influence of materialism on compulsive buying and indebtedness, as well as compulsive buying on indebtedness among civil servants and private employees in the Jakarta area, especially those of millennial age. Data collection was carried out online using a Likert scale. The population in this study was composed of private employees and civil servants working in the Jakarta area, with a total of 538 respondents. The research method used is quantitative research with SEM-Lisrel analysis. The results of this study show that high financial literacy (FL) is not able to reduce the level of indebtedness (I) among civil servants and private employees. High materialism (M) correlated with increased levels of indebtedness (I) in both groups of workers. High compulsive buying (CB) only has the effect of increasing indebtedness (I) in civil servants but does not apply to private employees. High materialism (M) encourages an increase in the rate of compulsive buying (CB) in civil servants but not in private employees. Furthermore, it was found that high financial literacy (FL) has the potential to reduce materialism (M) in civil servants but does not apply to private employees. Meanwhile, high financial literacy (FL) also has a positive impact on reducing compulsive buying (CB) behavior in civil servants and private employees. However, financial literacy (FL) does not have a positive influence on saving behavior (SB) among civil servants and private employees. Furthermore, in terms of comparison between private employees and civil servants, this study shows that private employees tend to have higher levels of materialism and compulsive buying compared to civil servants. However, there were no significant differences in levels of financial literacy, indebtedness, or saving behavior between the two groups. The findings mean that efforts to improve financial literacy and reduce debt levels could be undertaken with similar approaches for both groups.