The Influence of Islamic Financial Literacy on Household Financial Management in Contemporary Indonesian Society

Abstract

This study aims to analyze the role of Islamic financial literacy in household financial management in contemporary Indonesian society, particularly in shaping consumption patterns and saving behavior that align with Sharia principles. The study employs a qualitative method with a descriptive–exploratory research design, chosen because it enables an in-depth exploration of household financial understanding, experiences, and practices that cannot be fully explained through quantitative data. This design is relevant for examining the gap between the normative values of Islamic finance and actual practices at the household level. The research location was set in the DKI Jakarta region due to its high level of economic activity, social diversity, and broad access to Islamic financial institutions. The study involved five informants comprising an Islamic economics academic, an Islamic financial institution practitioner, a regulator, an Islamic financial planner, and a representative from a household community selected purposively based on their competence and the relevance of the information they could provide. The findings indicate that Islamic financial literacy plays an important role in improving financial planning, controlling consumption, and increasing household awareness of saving. The study recommends strengthening community-based Islamic financial education through the active involvement of Islamic financial institutions and educational establishments.