Open Access

Financial Literacy–Driven Decision Model for Understanding Millennial Financial Behavior Toward Investment Fraud Risks and Status-Oriented Consumption Patterns

PDF

Dr. Amir Hosseini ¹ , Dr. Sara Mohammadi ¹ ,

⁴ Department of Computer Science Sharif University of Technology, Tehran, Iran

⁴ Faculty of Management Studies University of Tehran, Tehran, Iran

Abstract

This study develops a Financial Literacy–Driven Decision Model (FLDDM) to explain how financial literacy influences millennial financial behavior, particularly in relation to investment fraud vulnerability and status-oriented consumption patterns (commonly associated with social “flexing” behavior). The increasing complexity of digital financial ecosystems, coupled with aggressive social media marketing and peer-driven consumption norms, has heightened the exposure of millennials to fraudulent investment schemes and irrational financial decisions. Building upon foundational theories in behavioral finance and financial literacy research, this study synthesizes prior empirical findings to construct a conceptual decision-making framework.

The model integrates financial knowledge, financial attitude, behavioral control, and socio-digital influences to explain financial decision outcomes. Literature evidence suggests that individuals with higher financial literacy demonstrate improved financial decision-making and reduced susceptibility to financial fraud (Chen & Volpe, 1998; Lusardi & Mitchell, 2007). However, financial literacy alone is insufficient without financial capability and behavioral reinforcement mechanisms (Friedline & West, 2016). The proposed model highlights the mediating role of social influence and psychological motives in shaping millennial financial decisions, particularly under conditions of digital exposure and investment hype cycles.

Findings from literature synthesis indicate that low financial literacy combined with social comparison pressure significantly increases vulnerability to fraudulent investments and status-driven consumption behavior. The study contributes to theoretical advancement by integrating behavioral finance, digital consumer psychology, and financial capability theory into a unified decision model. Practical implications suggest the need for integrated financial education programs that extend beyond knowledge acquisition to behavioral and psychological conditioning.

Keywords

Financial literacy, Millennial behavior, Investment fraud, Behavioral finance

References

Amanah, E., Iradianty, A., & Rahardian, D. (2016). Pengaruh Financial Knowledge, Financial Attitude Dan External Locus of Control Terhadap Personal Financial Management Behavior Pada Mahasiswa S1 Universitas. Telkom e-Proceeding of Management, 3(2), 1228–1235.

Agarwalla, S. K., Barua, S. K., Jacob, J., & Varma, J. (20015) Financial Literacy among Working Young in Urban India. Financial Literacy among Working Young in Urban India. World Development, 67(C), 101-109. https://doi.org/10.1016/j.worlddev.2014.10.004

Chairani, R., Bestari, M. F. O., & Hidayat, F. S. (2021). Analisa Pengaruh Literasi Keuangan Terhadap KeputusanInvestasi. Jurnal Sains Sosio Huaniora, 5(1), 691-698. https://doi.org/10.22437/jssh.v5i1.15427

Chen, Haiyang & Volpe, Ronald. (1998). An Analysis of Personal Financial Literacy Among College Students. Financial Services Review.7. 107-128. https://doi.org/10.1016/S1057-0810(99)80006-7

Das, S. C (2016). Financial Literacy among Indian Millennial Generation and their Reflections on Financial Behaviour and Attitude: An Explanatory Research. The IndianJournal Of Commerce, 69 (4), 16-34.

de Bassa Scheresberg. (2013). Financial Literacy and Financial Behavior among Young Adults: Evidence and Implications. Numeracy,6(2), 1-21. http://dx.doi.org/10.5038/1936-4660.6.2.5

Delkamp, Morgan. (2018). Affiliate Marketing Campaign With Social Media Micro-Influencers. Degree Programme in International Business, 1-50. https://www.theseus.fi/handle/10024/156507

Detik Jateng. (2022). (Online), https://www.detik.com/jateng/hukum-dan-kriminal/d-6408224/duh-ratusan-mahasiswa-ipb-terjerat-pinjol-gegara-tergiur-investasi-bodong, Diakses pada 19 Juni 2023.

Dew, J. P., & Xiao, J. J. (2011). The Financial Management Behavior Scale: Development and Validation. Faculty Publications, 22(1), 43–59, dari http://afcpe.org/journal-articles.php?volume=387&article=403

Faramitha, A., Wahyudi., & Desmintari. (2021). Analisis perilaku manajemen keuangan pada generasi milenial. INOVASI: Jurna Ekonomi, Keuangan dan Manajemen, 17(1), 19-29, dari https://journal.feb.unmul.ac.id/index.php/INOVASI/article/view/9216

Friedline, T., & West, S. (2016). Financial Education is not Enough: Millennials May Need Financial Capability to Demonstrate Healthier Financial Behaviors. Journal of Family and Economic, 37(4), 649-671. https://doi.org/10.1007/s10834-015-9475-y

Garman, E. T., & Forgue, R. (2014). Personal finance. Cengage Learning.

Griskeuvicius, V., & Kenrick, D. T. (2013.) Fundamental motives: How evolutionary needs influence consumer behavior. Journal of Consumer Psychology, 23(3), 372–386. http://dx.doi.org/10.1016/j.jcps.2013.03.003

Herd, P., Holden, K., & Su, Y. T. (2012). The links between early‐life cognition and schooling and late‐life financial knowledge. Journal of Consumer Affairs, 46(3), 411–435, https://doi.org/10.1111/j.1745-6606.2012.01235.x

IDN Times. (2019). Indonesia Millennial Report 2019. https://ims.idntimes.com/report, Diakses 3 Februari 2023.

Jelen, G. F., & Williams, J. R. (1998). A practical approach to measuring assurance. Proceedings 14th Annual Computer Security Applications Conference. 333-343. https://doi.org/10.1109/CSAC.1998.738653

Lintner, G. (1998) Behavioral Finance: Why Investors Make Bad Decisions. The Planner, 13(1), 1-8.

Lusardi, A., & Mitchell, O. S. (2007). Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, 54(1), 205–224. https://doi.org/10.1016/j. jmoneco.2006.12.001

Mathur, M., Narayanan, A., &Chetty, M. (2018). Endorsements on Social Media: An Empirical Study of Affiliate Marketing Disclosures on YouTube and Pinterest. In Proceedings of the ACM onHuman-Computer Interaction, 2(119), 1-26. https://doi.org/10.48550/arXiv.1809.00620

Mottola, Gary. (2015). The Financial Capability of Young Adults: A Generational View. FINRA Foundation Financial Capability Insights, 1-12. http://dx.doi.org/10.13140/RG.2.1.3800.5281

OECD. (2012). OECD/INFE high-level principles on national strategies for financial education. OECD Publishing.

Potrich, A. C. G., Vieira, K. M., & Mendes-Da-Silva, W. (2016). Development of a financial literacy model for university students. Management Research Review, 39(3), 356–376.

Puspita, G., & Isnalita. (2019). Financial Literacy: Pengetahuan, Kepercayaan Diri dan Perilaku Keuangan Mahasiswa Akuntansi. Owner: Riset & Jurnal Akuntansi, 3(2), 117-128. https://doi.org/10.33395/owner.v3i2.147

Qurotaa’yun, Z., & Krisnawati, A. (2019). Pengaruh Literasi Keuangan Terhadap Perilaku Konsumtif Generasi Milenial Di Kota Bandung. JAF (Journal of Accounting and Finance), 3(1), 46-53, https://doi.org/10.25124/jaf.v3i1.2167

Renata, A. W., & Wiryawan, B. S. (2021). Perilaku Keuangan Pada Generasi Milenial Studi Kasus Pada Beberapa Perguruan Tinggi Swasta Di Bandung. Journal of Accounting and Business Studi, 6(1), 81-105, dari https://journal.ithb.ac.id/JABS/article/view/515

Safryani, U., Aziz, A., &Triwahyuningtyas, N. (2020). Analisis Literasi Keuangan, Perilaku Keuangan, Dan Pendapatan Terhadap Keputusan Investasi. Jurnal Ilmiah Akuntansi Kesatuan, 8(3), 319 -332. https://doi.org/10.37641/jiakes.v8i3.384

Sandi, K., Worokinasih, S., M.Sc., & Darmawan, A. (2020) Pengaruh financial knowledge, financial confidence, financial self-efficacy, dan financial attitude terhadap financial behaviour (Studi pada youth entrepreneur yang menjalankan bisnis startup di Kota Malang).Profit: Jurnal Administrasi Bisnis, Special Issue (Ekosistem Start Up), 140-150. https://profit.ub.ac.id

Schwartz, Kylie. (2023). Does Lack of Financial Literacy Lead to Subpar Financial Decision Making in College Students?. Management and Human Resources Management, Thesis Undergraduate Project. http://hdl.handle.net/20.500.12680/b8515w02b

Shefrin, H. (2000). Beyond Greed and Fear: Understanding Behavioral Finance and Psychology of Investing. Harvard BussinessSchool Press.

Siaran Pers: Survei Nasional Literasi dan Inklusi Keuangan Tahun. 2022. (Online), https://ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Pages/Survei-Nasional-Literasi-dan-Inklusi-Keuangan-Tahun-2022.aspx, diakses 03 Februari 2023.

Suryanto. (2017). Pola Perilaku Keuangan Mahasiswa Di Perguruan Tinggi. Jurnal Ilmu Politik dan Komunikasi, 7(1), 11-19.

Wagland, Suzanne & Taylor, Sharon. (2009). When it Comes to Financial Literacy, is Gender Really an Issue?. Australasian Accounting Business and Finance, 3(1), 13-25. http://ro.uow.edu.au/aabfj/vol3/iss1/3

Most read articles by the same author(s)

<< < 2 3 4 5 6 7 8 > >>

International Journal of Management and Business Development

Financial Literacy–Driven Decision Model for Understanding Millennial Financial Behavior Toward Investment Fraud Risks and Status-Oriented Consumption Patterns

Abstract

Keywords

References

Most read articles by the same author(s)

Similar Articles