Economics and Accounting JournalVol.1, No.1, January 2018



Baiq Fitri AriantiUniversity of Pamulang

[email protected]


This research aims to analyze and measure the influence of financial literacy, financialbehavior and income on investment decisions. The type of research used is quantitativeresearch descriptive method. Types and data sources used are primary data that is datacollected and processed by the researcher himself from the object. The amount ofpopulation in this research is 29.231 student and the sample technique used is randomsampling by using slovin formula. Data were collected by using questionnaire methodfrom 100 student become sample in this research. Data analysis techniques used in thisresearch are descriptive statistical analysis, data quality test, classical assumption test,multiple linear regression test, F test, t test and coefficient of determination with the helpof software program SPSS version 22. The results of this research indicate that financialliteracy no significant effect on investment decisions, while financial and incomebehavior have a significant effect on investment decisions.

Keywords : Financial Literacy, Financial Behavior, Income and Investment Decisions


Financial Literacy (FinancialLiteracy) is a must for every individualto avoid financial problems becauseindividuals are often faced with a tradeoff situation where one must sacrificeone interest for the sake of otherinterests. According to Robb andWoodyard (2011) sufficient financialliteracy will provide a positive influenceon the financial behavior of a person,such as set or allocate financesappropriately.

Consumerism attitude that became ahabit at this time make people less havea culture of saving for example in termsof investing. There are still many peoplewho have not realized the importance ofhaving financial management in theirpersonal lives because people still thinkthat personal financial investment

planning is only done by people whohave high income only. But on the otherhand, there are also individuals whohave high incomes but have noinvestment planning on their personalfinances (Pritazahara, 2015).

According to Masassya (2006) statesthat most of the allocation of fundsaimed at several things namely,investment, saving and consumption.Among the three, the most beneficialtype of allocation in the future isinvestment. Planning investment inpersonal finance is important, because itis an independent learning process tomanage finances in the present andfuture (Pritazahara, 2015).

Investment is a sacrifice madenowadays with the aim of gaininggreater benefits in the future (Hamingand Basalamah, 2010). One of thefactors needed to make an investment is


Economics and Accounting JournalVol.1, No.1, January 2018


capital or funds. Sources of funds cancome from loans or personal funds. Inaddition to knowledge of finance,income and experience in investing alsoaffect investment decisions, the moreincome a person has in managing thefinances, the better the way of managinghis finances for the future byconsidering the risks that will occur andtolerating those risks (Nababan &Sadalia, 2013).

Based on the World Bank survey, itshows that Indonesia's financial literacyrate is only 20%. This is lowercompared to ASEAN countries such asfilipino 27%, Malaysia 66% Thailand73% and Singapore 98%. Therefore it isneeded Financial Literacy in improvingthe economy.

Students as young people will notonly face the increasing complexity infinancial products, services and markets,but they are more likely to face financialrisks in the future. (Lusardi andMitchell, 2007). The problem in thisresearch is the low financial literacy andfinancial behavior that occurs among thestudents, this is seen during initialobservation in some students of theFaculty of Economics, Pamulang ofUniversity said that it is still not able tomanage their own lifestyle and patternbecause of the high level of consumptivethat makes them irrational in buyingtheir needs, besides also in managing themoney they receive from parents orscholars, they faced with a variety ofcomplex financial options, includingpaying tuition, paying rent or rent,repaying loans, budgeting, saving,following insurance and even workingso they have to balance their lives bothin the workplace, college and life social.This fact is what encourages thedevelopment of the theory of financialbehavior (financial behavior theory)which is the application of psychologyin the discipline of financial science.Financial behavior is instrumental inmaking investment decisions. The

investment decision maker don’t alwaysbehave in a manner consistent with theassumptions made according to theperception and understanding of theinformation received (Christanti andMahastanti, 2011).

When making investment decisions,individuals are relatively dominated bythe expected utility theory. Expectedutility theory is a risky decision andaims to achieve maximum results(Tversky and Kahneman, 1981). Thistheory assumes that individuals whomake decisions are rational, but oftendecision makers are not rational at thetime of their choice (Robison, Shupp,and Myers, 2010). Kahneman andTversky (1979) criticize the utilitytheory used in making investmentdecisions especially when riskyconditions are based on humanpsychological factors. Then the utilitytheory was developed and prospecttheory was born. Human behavior inmaking decisions is based onpsychological factors, making a riskydecision can be interpreted as a choiceor gamble. Manurung (2012) states thatindividuals in investing not only useestimates of the prospects of theirinvestment instruments, butpsychological factors also have a bigrole in determining decision-making.Learn how psychological factors areemotional can affect financial decisions,and financial markets expressed byNofsinger (2001) by defining the theoryof financial behavior is the study of howhumans actually behave in financialrelated decisions. Behavioral finance(behavioral finance) is an approach thatexplains how people make investmentsor activities related to finance isinfluenced by psychological factors.

The problems in this research arealso expressed by Welly's (2016) studywhich shows that aspects of financialliteracy such as general knowledge ofpersonal finance, savings and loans,insurance, and investment


Economics and Accounting JournalVol.1, No.1, January 2018


Financial Literacy(X1)

Financial Behavior(X2)



Income (X3)

simultaneously (whole) have asignificant influence on lecturer'sinvestment decision, employees, andstudents at STIE Multi Data Palembang.And this research is also appropriateconducted by Ni Made DwiyanaRasuma Putri et al (2017) said thatfinancial literacy has the greatestinfluence in determining the behavior ofindividual investment decisionscompared with sociodemographicfactors. Meanwhile, according toresearch Musdhalifa (2016) shows thatthe significant influence where locus ofcontrol, financial knowledge and incomepositively affect the decision to invest inthe community of Makassar.

Here is a conceptual frameworkimage of the variables to be studied asfollows:

Figure 1. Conceptual Framework

Based on the description andframework that has been described, theresearcher formulates the researchhypothesis as follows:H1 : There is the influence of financial

literacy on investment decisionsH2 : There is influence of financial

behavior to investment decisionH3 : There is an influence of income

level on investment decisionsH4 : There is the influence of financial

literacy, financial behavior andincome level collectively toinvestment decisions


2.1. Financial LiteracyFinancial knowledge and skills in

managing personal finance are essentialin everyday life. Krishna, Rofaida, andSari (2010) explain that financialliteracy helps individuals to avoidfinancial problems.

Financial Literacy according to theFinancial Services Authority (2013) is aseries of processes or activities toincrease the knowledge, confidence andskill of consumers and the widercommunity so that they are able tomanage finances better.

According to Kim (2001) in Sabri(2011) financial literacy is the basicknowledge that people need to survivein modern society. This basic knowledgeinvolves knowing and understanding thecomplex principles of spending, saving,and investing. Meanwhile, according toLusardi & Mitchell (2007) describesfinancial literacy is the knowledge thatsomeone has about financialinstruments, including, one's knowledgeabout savings or saving, insurance orinsurance, investment and otherfinancial instruments. Financial Literacycan be interpreted as financialknowledge, with the aim of achievingprosperity.

From the above understanding, itcan be concluded that financial literacyis a person's ability to know finance ingeneral, where the knowledge includessavings, investments, debt, insuranceand other financial instruments.

2.2. Financial BehaviorFinancial Behavior is a behavior

related to financial applications.According to Ricciardi (2000), financialbehavior is a discipline of science inwhich the inherent interaction ofdisciplines of science and continuouslyintegrate so that the discussion is notdone isolation. A person who wants tolearn financial behavior must have an


Economics and Accounting JournalVol.1, No.1, January 2018


understanding of the psychological,sociological, and financial aspects.

Shefrin (2000) defines financialbehavior as a study of howpsychological phenomena affect theirfinancial behavior. Nofsinger (2001)defines the financial behavior oflearning how humans actually behave ina financial setting. In particular, learnhow psychology influences financial,corporate and financial marketdecisions.

2.3. IncomeIncome is one indicator to measure

the welfare of a person or society, sothat the income of this society reflectsthe economic progress of a society(Luminatang, 2013). According Sukirno(2006), income is the amount of incomereceived by the population on their workperformance during a certain period,whether daily, weekly, monthly oryearly. A person's income isfundamentally dependent on work in thefield of services or production, as wellas the time spent on work, the level ofincome per hour received (Luminatang,2013).

2.4. Investment DecisionAccording to Rusdin (2006) the

decision to invest is individual anddepends entirely on a free person.Therefore, before arriving at aninvestment decision, first considercarefully. According to Christanti &Mahastanti (2011), an individual'sinvestment decisions during these twosides are a) the extent to which decisionscan maximize the wealth (economic), b)Behavioral motivation (investmentdecision based on investor psychologicalaspect).


The type of research used isquantitative descriptive method. The

population in this study is all studentsactive in the odd semester of academicyear 2016/2017 at the Faculty ofEconomics, University of Pamulang,amounting to 29,231 students.

The sample technique used is simplerandom sampling technique. Todetermine the size of the sample is donethrough a statistical approach by usingthe Slovin formula (Sugiyono, 2016).

Nn =

1 + N (e) 2

Based on the calculation of slovinformula, the sample obtained as much as99.65 rounded to 100. Type and sourceof data used is the primary data of thestudents active odd semester academicyear 2016/2017 Faculty of Economics atthe University of Pamulang. Datacollection techniques in this study are 1)Observation, 2) Library Studies, 3)Questionnaire. Data analysis techniqueused in this research is statisticalanalysis method by using SPSSapplication program version 22 forwindows.


4.1. Descriptive Statistics Analysis

Table 1. Descriptive Statistic Result

N Min Max MeanStd.Dev.

FL (X1) 100 50 96 77,00 7,439FB(X2) 100 22 61 46,90 5,902Income(X3) 100 19 35 26,97 3,605

ID (Y) 100 20 38 29,63 3,784Valid N(listwise) 100

Based on table 1 above shows thatthe number of respondents (N) as manyas 100 students. The minimum value


Economics and Accounting JournalVol.1, No.1, January 2018


indicates the respondent's answer at leastand maximum is the highest answer.

4.2. Data Quality TestTo know the value of rtabel, it is

known the number of respondents asmuch as 100 respondents, then the freedegrees that have the equation df = n-kor df = 100-4 at the level of significance0.05, then got the rtabel number of0.195. So it can be concluded that allstatement items of the variables in this

study is valid. While the results oftesting data obtained from each itemstatement on the independent andbounded variables have the value ofcronbach's alpha is greater than thereliability standard value of 0.60. So itcan be said that the instrument in thisreserach is reliable and feasible to use.

4.3. Classical Assumption TestResults

4.3.1. Normality Test

Table 2. Normality Test Result

Unstandardized Residual

N 100NormalParametersa,b

Mean ,0000000Std. Dev. 2,52598534

Most ExtremeDifferences

Absolute ,045Positive ,042Negative -,045

Test Statistic ,045Asymp. Sig. (2-tailed) ,200c,d

Based on table 2 above that thevalue of significance shows the figure of0.200> 0.05. So it can be said that thedata used in this study is normallydistributed

4.3.2. Multicolinearity Test

Table 3. Multicolinearity TestCoefficientsa

Model Collinearity Statistics

(Constant)Financial LiteracyFinancial behaviorIncome

Tolerance VIF



Based on table 3 above can bestated that the value of VarianceInflantion Factor (VIF) is far below thenumber 10 that is 1.354 on the variableLiterasi Finance, 1.427 on the variableFinancial Behavior and 1.093 onvariable Income, while the tolerance

value shows larger numbers 0.10 ie0.739 on variable Financial Literacy.

0.701 on the variable of FinancialBehavior and 0.915 on the Incomevariable. Thus it can be concluded in theregression model don’t occuredmulticolinierity between independentvariables.

4.3.3. Heteroscedasticity Test

Figure 2 . Heteroscedasticity Test Result

Based on the scatterplots graphshown in Figure 2 above shows that the


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points spread randomly and do not forma pattern, and are scattered below orabove the number 0 on the y-axis. It canbe concluded that the research data don’toccured heteroscedasticity.4.3.4. Autocorrelation Test

Table 4. Autocorrelation Test ResultModel Summaryb


R RSquare

AdjustedR Square


1 ,745a

,554 ,540 2,565 1,82

Based on table 4 above shows thatthe results of the autocorrelation testoutput known DW value of 1.820, thenthis value with a significant table valueof 5%, the number of samples N = 100and the number of independent variables3 (K = 3) if the value of DW 1.820 ofthe value dU = 1.613.

4.4. Hypothesis Test4.4.1. Multiple Linear Regression Test

Table 5. Multiple Linear Regression TestCoefficientsa




T Sig.BStd.Error Beta

1 (Constant) ,952 3,092 ,308 ,759

FL ,074 ,040 ,145 1,830 ,070

FB ,125 ,052 ,195 2,400 ,018

Income ,635 ,075 ,605 8,494 ,000

From table 5 above shows that theresult of multiple linear regressionequation that is formed is Y = 0,952 +0,074x1 - 0,125x2 + 0,635x3 + e.

4.4.2. Coefficient of DeterminationTest (R2)

Table 6. Coefficient of Determination TestResult

Model R RSquare

AdjustedR Square


1 ,745a ,554 ,540 2,565

Based on table 6 above that thevalue of adjusted R square is 0,540. Thisshows the results of variables DecisionsInvest can be explained by the threevariables of Financial Literacy,Financial Behavior and Revenue of54%. The Standard Error of the Estimate(SEE) value is 2,565. The smaller thelevel of SEE will make the regressionmodel more accurate in predicting thedependent variable.

4.4.3. T TestFrom the result of analysis using

SPSS 22.0 contained in tables ofmultiple linear regression analysis andalso answer the problem formulationcontained in the previous chapter is thefirst hypothesis, indicating that thefinancial literacy variable obtainedtcount value of 1.830. To determine thedistribution of t is sought at ɑ = 5%: 2 = 2.5%. With a 2-sided test the 0.025significance of the results obtained forthe t table is 1.984. From the abovecalculation results obtained FinancialLiteracy (X1) has tcount ttable is1.830 1.984 with a significance valueof 0.070 0.05. This can be interpretedthat the Financial Literasi not positivelyand significantly influence on theDecision of Investing. Then H1 isrejected. The second hypothesis, showsthe results of the calculation of FinancialBehavior (X2) obtained tcount value ttable is 2,400 1.984 with asignificance value of 0.018 0.05. Thisshows that Financial Behaviorinfluences investment decisions. ThenH2 is accepted and the third hypothesis,


Economics and Accounting JournalVol.1, No.1, January 2018


shows that the result of calculation ofRevenue value (X3) obtained tcountablevalue ttable is 8.494 1.984 with asignificance value of 0,000 0.05. Thisshows that income has a positive andsignificant effect on the InvestmentDecision. Then H3 accepted

.4.4.4. F Test

Table 7. F Test Result

ModelSum ofSquares Df

MeanSquare F Sig.

1 Reression

785,630 3261,877




631,680 966,580

Total 1417,31 99

Based on table 7 above obtainedvalue of Fcount equal to 39,799 by usingconfidence level 95% and significantlevel 0,05. Then it can be concluded thathypothesis four or H4 accepted, whichmeans that the multiple regressionmodel can be used to measure the levelof investment decisions orsimultaneously have a positive andsignificant impact on the Decision ofInvesting.

4.5. DiscussionThe discussion in this study

indicates that the financial literacyvariable has no significant effect on theinvestment decision, evidenced by thevalue of tcount ttable is 1.830 1.984with a significance value of 0.070 0.05. This can be interpreted that theFinancial Literasi not positively andsignificantly influence on the Decisionof Investing. These results are not in linewith the results of research conducted byWelly et al (2016) showed that partiallyvariable financial literacy in the aspectsof savings and loans and investmentalone that significantly affect investment

decisions and these results are also inline with the variable financial literacyin the insurance aspects indicate that nosignificant effect on investment decisionin STIE Multi Data Palembang. Thenthese results are also in line with theresults of research conducted by Melisa(2015) indicates that the Literasifinancial investors have no significanteffect on investment decisions.

Variable of Financial Behaviorinfluence to investment decision,evidenced by value of tcount ttabel is2,400 1,984 with significance valueequal to 0,018 0,05. These results arein line with the results of researchconducted by Aminatuzzahra (2014) canbe concluded that there is significantinfluence between behavioral variable(attitude) finance to investment decisionmaking. So this research is also inaccordance with the theory of financialbehavior perspective in financialdecision making. The better one'sattitude or mental finance then thefinancial behavior of a person in makingbetter investment decisions.

Income significant effect oninvestment decisions, evidenced by thevalue of t count ttable is 8.494 1.984with a significance value of 0.000 0.05. The results of this study in linewith research conducted by Musdhalifa(2016) showed that income has asignificant effect on investmentdecisions have an influence. This is alsoin line with the results of Kusumawati(2013) research that a person's incomehas an influence on the management ofhis personal finances, the more theirincome the greater his judgment to makean investment decision. And this resultis not in line with the results of researchconducted by Ni Made Dwiyana andHenny (2017) shows that Revenue doesnot significantly influence the behaviorof inventory decisions. That is, aperson's income level is not abenchmark for making an individualinvestment decision. The same thing in


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Rita and Kusumawati's research (2010)states that the higher the income aperson has, the more a person wants tobuy what he wants beyond what isneeded, someone who is like this lessunderstood by the benefits of saving orinvesting for the future. Whilesimultaneously, for the variables X1, X2and X3 together significant effect onInvestment Decision, evidenced by thevalue Fcount> Ftable that is 39.799>2.70 and the value of significance 0,000<0.05.


Based on the results of multiplelinear regression test, shows that thevalue of constant and coefficient ofvariables that have a positive valueindicates that the equation has a directrelationship. Based on T test results,indicating that for financial literacyvariable has no significant effect oninvestment decisions. Based on theresults of research with F test, it isknown that the overall variables offinancial literacy, financial behavior andincome together have a significant effecton investment decisions.


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