CORE: Young People Need Long-Term Financial Literacy

Jakarta (ANTARA) - Mohammad Faisal, Executive Director of the Center of Reform on Economics (CORE) Indonesia, has said that digital technology proficiency among young people must be accompanied by digital financial literacy that emphasises long-term considerations.

Faisal observed that Generation Z and Generation Alpha have an advantage in digital technology, including in financial matters.

However, behind this high digital literacy, both generations still face challenges in managing their finances due to consumption patterns that tend to prioritise secondary and tertiary needs.

“From what I see, priorities in consumption often differ, or often the focus is more on secondary and tertiary things rather than primary ones, apart from food,” he told ANTARA in Jakarta on Friday.

He assessed that easy access to technology and digital financial services has not been fully matched by the ability to set long-term financial priorities.

The differing consumption patterns among the younger generation are often influenced by social media, which encourages young people to become more consumptive in order to gain recognition or be seen as more prominent in the online world.

According to him, young people’s awareness of financial management still needs to be improved, and they should begin thinking about long-term consumption priorities such as home ownership.

In addition, he stressed that the ability to arrange spending priorities and plan finances from an early age is considered an essential foundation for building financial resilience in the future.

Faisal suggested that banks encourage the use of digital financial services not merely to facilitate consumption but also for more productive activities.

“The use of digital financial services does need to be promoted among the younger generation, but not only for financial management — it should extend to productive activities, so that they can become entrepreneurs and build businesses,” said Faisal.

Faisal said that with better financial literacy, digitalisation in the financial sector can drive productivity among the younger generation while also contributing to national economic growth.