JRSSEM 2021, Vol. 01, No. 2, 163 – 178
E-ISSN: 2807-6311, P-ISSN: 2807-6494
DOI : 10.36418/jrssem.v1i2.12 https://jrssem.publikasiindonesia.id/index.php/jrssem/index
DETERMINANTS OF MOTHER'S FINANCIAL LITERACY ON
FAMILY ECONOMIC WELFARE:
MAQASHID SHARIA
ANALYSIS
Siti Nur Azizah
1*
Annisa Nur Salam
2
1
Sunan Kalijaga State Islamic University, Yogyakarta, Indonesia
2
Sunan Gunung Djati State Islamic University, Bandung, Indonesia
e-mail: siti.azizah@uin-suka.ac.id
*Correspondence: siti.azizah@uin-suka.ac.id
Submitted: 13 September 2020, Revised: 20 September 2021, Accepted: 27 September 2021
Abstract. This study involved determinants of maternal financial literacy on household welfare
from the perspective of maqashid al-syariah. This study used two waves of IFLS, namely IFLS-4
(2007) and IFLS-5 (2014). In addition, several data related to the value of household assets and
household characteristics are available based on IFLS-4 (2007). The study uses a quantitative
approach with descriptive analysis and regression using the Ordinary Least Square (OLS) method.
The findings in this study include the expenditure variable has no significant effect on the family
welfare variable. The social consumption variable has a negative and significant impact on family
welfare. The savings variable has a positive and significant effect on family welfare. The variable
was to borrow funds has a positive and significant effect on family welfare. The pension fund
variable has a positive and significant effect on family welfare. Mother's education variable has a
negative and significant effect on family welfare. The variable number of family members has a
positive and significant effect on the family's economic interest. The variables of residence and year
have no significant impact on the family's economic welfare.
Keywords: determinants; maternal financial literacy; family welfare; maqashidu al-syariah.
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INTRODUCTION
Islam is a universal religion that
regulates all aspects of human life,
including teachings emphasizing a
balanced lifestyle. Reflection on
recommendations to meet the needs of life
as a form of embodiment balance between
the world and the hereafter (Siddiqi, 1988).
And its application to economic behavior in
everyday life (Wilson, 1998). One of the
essential discussions in the discipline of
Islamic Economics is the frame for the
management of property ownership
(tasharruf fil milkiyah), which is associated
with the main element, namely financial
management. In Islam itself, the control of
personal and family finances can be called
sakinah finance (Endriant, 2016). Family
financial management plays a significant
role in the well-being of individuals and
families. Therefore, Islam emphasizes that
Muslims can manage finances by maqhasid
al-sharia as a way of life for all humanity.
Financial management determines the
priority scale and household budget by
prioritizing the benefit to achieve Fallah
(worldly and hereafter welfare) (Furqani,
2017).
The issue of financial literacy is
increasing in various countries (Jamaludin
& Ismail, 2019). Financial literacy in
developed and developing countries plays
a vital role in economic reform (Lusardi &
Mitchell, 2014). Even can use Financial
literacy to treat various financial crises
(Klapper et al., 2012). In the context of
Indonesia, public financial literacy is 21.8%,
still relatively low compared to the
Philippines 27%, Malaysia 66%, Thailand
73% . Furthermore, in 2016, the Indonesian
people's financial literacy level increased
even though it was still relatively low,
reaching 29.66 percent. In the same year,
(Yadav, 2017) also surveyed to measure
financial literacy in 143 countries
worldwide, showing that most of the
Indonesian population, around 68%,
belongs to the group with low financial
literacy levels. In the survey, 68% of
Indonesian respondents failed to answer
basic questions about inflation, interest
rates, and risk diversification. The results of
this survey then made Indonesia ranked
88th out of 143 countries studied.
The low financial literacy of the
Indonesian people is due to the lack of
sufficient knowledge and ability to manage
income productivity (Dwiastanti, 2015). In
addition, there is a low level of
understanding related to various financial
products and services offered by formal
financial services institutions and more
interest in other investment offers that have
the potential to be. The existence of a
lifestyle that encourages consumptive
behavior (Herdjiono & Damanik, 2016). In
the end, this leads to various irresponsible
financial behaviors such as a lack of savings,
investment, emergency fund planning, and
budgeting for the future (Sofia, 2017).
The industry players need to support
the improvement of financial literacy and
inclusion through educational programs for
the Indonesian people to manage their
finances intelligently. (Nidar & Bestari,
2012). And the lack of knowledge about the
financial industry can be overcome (Safitri,
2020). Especially homemakers who have a
role as financial managers (Funds, 2018).
Homemakers must-have qualities and
capabilities capable of driving and
165 | Determinants of Mother's Financial Literacy on Family Economic Welfare: Maqashid
Sharia Analysis
changing in various dimensions of family
life, providing financial education to
children (Calamato, 2010). In addition, the
ability of women's financial management
determines the future of the family (Yadav,
2017).
Women's higher level of financial
literacy creates wiser financial management
(Koomson et al., 2021). It will ultimately
impact decisions to use formal financial
products and services (Lind et al., 2020). The
increased use of these products and
services can increase transactions and
encourage macroeconomic growth
(Bhegawati & Utama, 2020).
Reality is the opposite. Indonesia, as a
country with a majority Muslim population,
has low financial literacy. Based on data
from the Financial Services Authority (OJK),
in 2013, only 17%, and in 2019 only 36.13%
of women had financial literacy and
understood good financial management.
This condition has the potential for errors in
financial management (miss management),
such as misuse of credit and the absence of
sound financial planning (Suparti, 2016). So
it has an impact on economic stress
(Mancebon et al. 2019). Disrupt the
economic stability of the family(Antonia
Grohmann, 2014) and affect marital
satisfaction and reduce the harmony of
husband and wife (Yushita, 2017).
The issue of maternal financial literacy
in Indonesia still has to be considered by
policymakers. Therefore, this study aims to
look at the determinants or factors that
influence maternal financial literacy on
household economic welfare as proxied by
the total value of household assets so that
appropriate policies can be formulated to
solve these problems, and according to
maqashid al- sharia.
The structure of this research is as
follows; the second session will briefly
explain some relevant previous research on
Islamic economics, financial literacy, and
the factors that influence low literacy. The
third session describes the data and
research methods for empirical testing.
Session 4 presents the results of the
research and analysis, while session 5
outlines conclusions and policy
recommendations that need to be
formulated.
a. Financial Literacy
Financial literacy is an element of
fundamentals that affect economic
growth and maintain the country's
financial stability (Potrich et al., 2015).
Financial literacy combines awareness,
knowledge, abilities, attitudes, and
habits needed to make financial
decisions (Koomson, Villano, & Hadley,
2021). As well as the basic needs for each
individual to carry out management to
achieve prosperity (Askar et al., 2017).
Financial literacy prevents people from
making mistakes (mismanagement) in
financial management (Lusardi &
Tufano, 2015). Sound financial literacy
supports good financial management,
improving people's living standards
(Crossan et al., 2011). Financial security
will be challenging to achieve because of
a person's high level of income without
proper financial management (Swiecka,
Yeşildağ, zen, & Grima, 2020). Financial
literacy encourages individuals to have
savings, insurance, and investments
(Potrich et al., 2015). Families with
financial literacy tend not to understand
financial problems (Helen &
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Polyzopoulou, 2019), Not applying good
financial behavior, and lack of skills in
dealing with economic shocks (Angela A.
Hung, Andrew M. Parker, 2009). On a
macro level, the low financial literacy of
a society is one of the causes of the
economic crisis (Gerardi et al., 2010).
b. Mother's Financial Literacy
Married women have an essential
role in creating family welfare
(Gudmunson & Danes, 2011). As a
housewife, you must have high financial
literacy (Calamato, 2010) to become an
excellent strategic planner and have
positive economical behavior (Kaushal,
2006). Finding Suparti (2016) that
homemakers play an essential role in
managing and managing family finances
(Pati et al., 2014). Have more diverse
perceptions than men on family well-
being (Sharma & City, 2019). Such as
asset ownership, seizing opportunities,
quality of health, as well as financial
accuracy, social intelligence
(Gudmunson & Danes, 2011). As well as
responsibility in preparing the family's
mental, social and economic areas. In
the context of perfecting the family and
the growth and future of children
(Huang et al., 2013).
Another finding, women with higher
education status have high financial
literacy and have more involvement in
making investment decisions in the
household (Bernasek & Bajtelsmit,
2002). Women with higher incomes have
more power in making investment
decisions, savings, insurance, loans in
the family (Zissimopoulos, 2012). Not
only gender, education, financial literacy
level, but financial behavior style, family
conditions or dynamics, family harmony,
marital satisfaction, communication
between families significantly affect
economic decision making in the family
(Jinhee et al., 2017).
c. Mother's Financial Literacy in Islamic
Economics
One of the goals in Islamic
economics is to benefit human welfare
in property or material wealth (hifdz al
mall). However, this is not understood as
something separate from the form of
devotion (workship) to Allah (Chapra,
2009). Property management must refer
to religious values and relate to other
aspects of benefit in maqâshid al-
syarî'ah (Choudhury, 1982). Islam
emphasizes Muslims, especially
homemakers, can manage finances
(financial literacy) by maqhasid al-sharia
(Setiawati et al., 2018). Namely, money
management by determining priorities
and household budgets (Lahsana, 2016),
prioritizing benefit to achieve Fallah
(prosperity of the world and the
hereafter) (Furqani, 2017), preventing
evil (daf' al-mafâsid). Prevent injustice in
the acquisition and use of material
(financial) resources (Age, 1984).
Mother's financial management ability
in Islam requires the existence of
hifdz'aql (maintaining reason).
According to (Chapra, 2009), for the
maintenance and development of
reason, it is necessary to support the
availability of good quality education, in
this case, financial education, freedom of
thought and expression, appreciation
for work performance, and financial
management. The maintenance and
development of reason result in financial
167 | Determinants of Mother's Financial Literacy on Family Economic Welfare: Maqashid
Sharia Analysis
management based on economic
rationality and using knowledge as
capital. Rationality in household
financial management is based on
justice, which contains equality, equity,
and a balance of economic benefits
(Chapra, 2009).
Furthermore, financial management
must be sourced from the Qur'an and
Al-Hadith and aims to meet one's simple
life needs, meet family needs, meet
long-term needs and provide social
assistance and donations in the way of
Allah. (Khan, 2011). Management of
finances or assets owned with a fair
distribution (M. Umer Chapra, 1992). In
the end, mothers with high financial
literacy can manage their household
finances with problems. They were
reflected in the determination of the
priority scale, the principles of halal &
tayyib in consumption, avoiding tabdzir
and israf, simplicity (moderate), social
consumption, the use of assets for the
future such as saving (iddikhâr),
spending in the way of Allah (infâq),
circulation (tadâwul), and preparing for
old age or retirement (Choudhury, 1983;
Chapra, 2009).
METHODS
Data
The data used in this study of maternal
financial literacy on the family economy is
panel data (pooling data), which is a
combination of cross-section and time
series of data the results of the Indonesian
Household Life Aspects Survey (SAKERTI) or
better known as the Indonesian Family Life
Survey (IFLS). This study uses two waves
from IFLS, namely IFLS-4 (2007) and IFLS-5
(2014). In addition, several data related to
the value of household assets and
household characteristics are available
based on IFLS-4 (2007).
Table 1. Variables and Operational
Definitions
Variable
Operational definition
Family
economic
well-being
The total value of
household assets
Expenditure
The total value of
household expenditure
Social
Consumption
Total expenditure for
social funds
Saving
The total value of
household savings
Financial
institutions
Dummy knowledge of
where to borrow money
Pension fund
Amount of expenditure
for pension fund
Education
Mother's education
Size
Number of household
members
Place
Dummy place of
residence, 1 = city and 2
= village
year
Dummy year of
observation, 1 = 2014
and 0 = 2007
Method
By empirically, this research will be
estimated using panel data analysis. The
steps carried out in this study are data
collection or data management from IFLS
to stata, descriptive statistical analysis,
panel data analysis (fixed effect model,
random effect model, and OLS), Chow Test,
Hausman Test, Lagrangian Multiplier Test,
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heteroscedasticity test. And robust cluster
standard error. The equation model used in
this study is the adoption and renewal of
the research Lusardi & Mitchell, 2014;
Potrich et al. 2015; Sharma & City (2019).
This study focuses on the dependent
variable in family economic welfare, which
is proxied by the total value of household
assets or assets. The independent variable
in this study is financial literacy which is
seen based on expenditure, social
consumption, saving, financial institutions,
and pension funds. In addition, it is also
seen that demographic factors that affect
family economic welfare are independent
demographic variables consisting of
education, size, city, and year. Using the
education variable or mother's education,
we will get how the mother's education
factor can affect the family's economic
welfare.
Following is the equation model used
in this study:
𝐹𝐸𝑊
!"
= %𝛼 + 𝐸
!"
+ % 𝑆𝐶
!"
+ % 𝑆
!"
+ % 𝐹𝐼
!"
+ % 𝑃𝐹
!"
+ 𝐸
!#
+ 𝑆𝑧
!"
+ 𝑃
!"
+ 𝑌
"
+ %𝜀
Where FEW has been family economic
welfare or family economic welfare; E is
expenditure or total expenditure, which
consists of purchases of food types and
payments for non-food types; S.C. is social
consumption for ritual ceremonies,
donations, gifts, zakat, infaq and others, S
represents savings or value of savings, time
deposits, stocks, and gold;
𝐹𝐼
is a financial
institution or access to bank and non-bank
financial institutions which are proxied by
the dummy variable,
𝑃𝐹
is a pension fund,
namely the amount of money spent to
prepare and retire, E is the mother's
education or length of education; Sz is the
size or number of family members; P is the
place of residence of the family whether in
the city or the village; and Y is the year of
observation or data collection, namely 2014
or 2007. Meanwhile, t is time, his
household, and M is mother. While
𝜀
is a
constant and is an error term.
RESULTS AND DISCUSSION
This study uses Stata software to
analyze panel data. Before the panel data
analysis stage, descriptive statistical
analysis was carried out on the variables to
be used in the study. The following are the
results of descriptive statistical analysis
data in this study which can be seen in Table
2:
169 | Determinants of Mother's Financial Literacy on Family Economic Welfare: Maqashid
Sharia Analysis
Table 2. Descriptive Statistical Analysis Results
Variable
N
Mean
SD
Min
Max
totaltreasure_rt
5552
1.09e+08
1.88e+08
24000.00
2.12e+09
Saving
5352
2.94e+06
1.83e+07
0.00
5.00e+08
hhsize
5571
3.54
1.70
1.00
15.00
icerem
5541
15870.89
92795.80
0.00
1.67e+06
hhexp
5530
2.93e+06
2.69e+06
70833.33
3.14e+07
place_borrow
5571
0.51
0.50
0.00
1.00
educ
5571
7.57
4.64
0.00
19.00
pension fund _rt
5571
6093.67
78335.65
0.00
3.60e+06
city
5571
0.62
0.49
0.00
1.00
Year
5571
2011.30
3.41
2007.00
2014.00
idyears
5571
0.61
0.49
0.00
1.00
ltotltreasurea_rt
5525
17.31
1.81
10.09
21.47
lsaving
5325
3.76
6.46
0.00
20.03
licerem
5541
2.01
4.02
0.00
14.33
lhhexp
5330
14.57
0.82
11.17
17.26
lpensionfund_rt
5571
0.45
2.18
0.00
15.10
hhexp
5530
2.93e+06
2.69e+06
70833.33
3.14e+07
place_borrow
5571
0.51
0.50
0.00
1.00
educ
5571
7.57
4.64
0.00
19.00
pension fund _rt
5571
6093.67
78335.65
0.00
3.60e+06
city
5571
0.62
0.49
0.00
1.00
Year
5571
2011.30
3.41
2007.00
2014.00
idyears
5571
0.61
0.49
0.00
1.00
ltotltreasurea_rt
5525
17.31
1.81
10.09
21.47
lsaving
5325
3.76
6.46
0.00
20.03
licerem
5541
2.01
4.02
0.00
14.33
lhhexp
5330
14.57
0.82
11.17
17.26
lpensionfund_rt
5571
0.45
2.18
0.00
15.10
Sumber: IFLS (2007 & 2014).
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This study uses three unbalance panel
data processing models, namely the
ordinary least square (OLS), fixed effect
model (FEM), and random effect model
(REM). The data processing that has been
done, the results of this study can be seen
in more detail in Table 3. The data
processing results based on the OLS, FEM,
and REM methods show the coefficient
values for the expenditure variable are
0.901, 0.449, and 0.882, respectively. The
probabilities for each technique are 0.0401,
0.102, and 0.0396. So based on the OLS and
REM methods, the expenditure variable has
a positive and significant effect on the
family welfare variable. Meanwhile, based
on the use of the FEM method, the
expenditure variable has no significant
impact on the family welfare variable.
As for testing on social consumption
variables for ritual ceremonies, donations,
gifts, zakat, infaq, and others, it can be seen
that the coefficient values based on the
OLS, FEM, and REM methods are -0.00627,
-0.00135, and -0.00699, respectively. The
probabilities for each technique are
0.00550, 0.0130, and 0.00547. So based on
the three methods, it shows that the social
consumption variable has a negative and
significant effect on family welfare. This
means that when social consumption
increases, family welfare will decrease. This
is one of the exciting findings. In Islam, it is
believed that when social consumption is
more significant, it will increase family
welfare.
171 | Determinants of Mother's Financial Literacy on Family Economic Welfare: Maqashid
Sharia Analysis
Table 3. Panel Data Processing
(1)
(2)
(3)
OLS
Fixed
Random
Expenditure
0.901**
0.449
0.882**
(0.0401)
(0.102)
(0.0396)
Social Consumption
-0.00627***
-0.00135**
-0.00699***
(0.00550)
(0.0130)
(0.00547)
Saving
0.0383***
0.0146***
0.0371***
(0.00319)
(0.00785)
(0.00314)
Financial Institutions
0.300**
0.122*
0.291**
(0.0428)
(0.0971)
(0.0421)
Pension Fund
0.0427***
0.000987**
0.0420***
(0.00864)
(0.0265)
(0.00870)
Education
0.0134***
-0.0118**
0.0145***
(0.00575)
(0.0268)
(0.00572)
Size
0.0120**
0.0624**
0.0162**
(0.0151)
(0.0489)
(0.0151)
Place
-0.156**
0.128
-0.142**
(0.0466)
(0.222)
(0.0465)
year
0.193*
0.393
0.194*
(0.0510)
(0.103)
(0.0502)
_cons
3.678
10.16
3,935
(0.530)
(1.373)
(0.524)
N
5103
5103
5103
adj. R2
0.279
0.180
Standard errors in parentheses
*
p < 0.1, ** p < 0.05, *** p < 0.01
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They are testing the savings variable
using the OLS, FEM, and REM methods
resulted in the coefficient results in each
method being 0.0383, 0.0146, and 0.0371.
The probabilities for each method are
0.00319, 0.00785, and 0.00314. So based on
the three methods, it shows that the
savings variable has a positive and
significant effect on family welfare. This
means that when the savings of a family
increase, the family's interest will increase
and vice versa; when savings decrease, the
family's welfare will decrease.
Testing the variable where to borrow
funds using the OLS, FEM, and REM
methods results in the coefficient results in
each method being 0.300, 0.122, and 0.291.
The probabilities for each method are
0.0428, 0.0971, and 0.0421. So, based on
the three methods, it shows that the
variable where to borrow funds has a
positive and significant effect on the
family's economic welfare. Where to
borrow funds is a dummy variable from the
mother's knowledge of formal financial
institutions. This means that mothers who
know legal loan institutions will further
improve family welfare than mothers who
know informal loan institutions.
They tested the pension fund variable
using the OLS, FEM, and REM methods,
resulting in the coefficient results in each
method being 0.0427, 0.000987, and
0.0420. The probability for each method is
0.00864, 0.0265, and 0.00870. So, based on
the three methods, it shows that the
pension fund variable has a positive and
significant effect on the family's economic
welfare. Of course, a pension fund can
guarantee a family's future, especially
financial stability, even though they do not
have a fixed income anymore because they
are no longer productive.
Testing the education variable or
mother's education using the OLS, FEM,
and REM methods resulted in the
coefficient of each process being 0.0134, -
0.0118, and 0.0145. The probabilities for
each method are 0.00575, 0.0268, and
0.00572. The FEM method shows that the
mother's education variable has a negative
and significant effect on family welfare.
However, based on the OLS and REM
methods, the mother's education variable
positively affects family welfare. This means
that when the mother's education is higher,
the family's interest will increase and vice
versa.
They are testing the size variable or the
number of family members using the OLS,
FEM, and REM methods resulted in the
coefficient results in each process being
0.0120, 0.0624, and 0.0162. The probability
for each technique is 0.0151, 0.0489, and
0.0151. So, based on the three methods, it
shows that the variable number of family
members has a positive and significant
effect on the family's economic welfare. The
more family members, the more the
interest of the family will increase. This
happens because many family members
already have their income but are not
married or have families.
They are testing the place variable
using the OLS, FEM, and REM methods
resulted in the coefficients for each form of
-0.156, 0.128, and -0.142. The probabilities
for each technique are 0.0466, 0.222, and
0.0465. So, based on the three methods, it
shows that the place variable has a positive
but not significant effect on the FEM model
on family economic welfare. In contrast, the
173 | Determinants of Mother's Financial Literacy on Family Economic Welfare: Maqashid
Sharia Analysis
OLS and REM models have a negative and
significant impact. This means that based
on the OLS and REM models, households
living in rural areas can improve their
family's economic welfare compared to
households living in cities.
They are testing the year variable using
the OLS, FEM, and REM methods resulting
in each technique's coefficients being
0.193, 0.393, and 0.194. The probabilities
for each method are 0.0510, 0.103, and
0.0502. So, based on the three ways, it
shows that the year variable has a positive
but not significant effect on the FEM model
on family economic welfare. In contrast, the
OLS and REM models have a positive and
significant impact. This means that based
on the OLS and REM models, 2014 in this
study has a more substantial effect on
family welfare than in 2007.
After obtaining three models in this
study, the best model was selected using
the Chow Test, Hausman Test, and
Lagrangian Multiplier Test. It was
concluded that FEM was the best model in
this study. Even though the problem of
heteroscedasticity is found in FEM, it has
been overcome by using a robust cluster
standard error so that the FEM model can
be used.
Discussion
Based on the analysis results that have
been carried out using the panel data
regression analysis method and processed
with Stata software, it is concluded that the
best model in this study is the fixed effect
model (FEM). So that the findings in this
study include the expenditure variable has
no significant effect on the family welfare
variable, the social consumption variable
has a negative and significant effect on
family welfare, and the savings variable has
a positive and significant effect on family
welfare, the variable where to borrow funds
has a positive and significant effect on
family welfare. , the variable of pension
funds has a positive and significant effect
on family welfare, the variable of mother's
education has a negative and significant
effect on family welfare; The variable
number of family members has a positive
and significant effect on the economic
welfare of the family, while the variable of
residence and year has no significant effect
on the economic welfare of the family.
More concisely, the findings in this study
can be seen in Table 4
Table 4. Results of FEM Model Analysis
Variable
Coefficien
t on FEM
Conclusion
Expenditure
0.449
Not
Significant
Social
Consumption
-0.00135**
Significant
Saving
0.0146***
Significant
Financial
Institutions
0.122*
Significant
Pension Fund
0.000987*
*
Significant
Education
-0.0118**
Significant
Size
0.0624**
Significant
Place
0.128
Not
significant
year
0.393
Not
significant
Const
10.16
Standard errors in parentheses
*
p < 0.1, ** p < 0.05, *** p < 0
So that the model in this research can
be arranged as follows:
Siti Nur Azizah, Annisa Nur Salam | 174
DOI : 10.36418/jrssem.v1i2.12 https://jrssem.publikasiindonesia.id/index.php/jrssem/index
𝐹𝐸𝑊
!"
= %10.16 + 0.449
!"
− % 0.00135
!"
+ % 0.0146
!"
+ % 0.122
!"
+ % 0.000987
!"
− 0.0118
!#
+ 0.0624
!"
+ 0.128
!"
+ 0.393
"
The social consumption variable has a
negative and significant effect on family
economic welfare. When social
consumption increases by 1 rupiah, it will
be followed by a decrease in family
economic welfare by 0.00135 rupiahs.
According to conventional financial
formulas, spending or consumption for
anything will reduce household assets or
assets (Furceri & Zdzienicka, 2012). In line
with the finding, increasing social
consumption will reduce saving and
investment; on the contrary, thinking
carefully about consumption will increase
saving and investment. Household social
consumption behavior affects asset
ownership, protection, and buy (Juster et
al., 2004). The number of family members
and newborn children in a family also
increases consumption and decreases asset
ownership, reducing savings (Smith &
Ward, 2015). However, this is an exciting
thing because, in Islamic economics, social
expenditures such as zakat, infaq, or alms
will improve family welfare. In line with the
findings of Smith & Ward (2015), Social
consumption expenditures such as zakat
will provide interest for both parties,
namely muzakki and mustahik. Muzaki will
increase the reward and increase the
blessing of wealth, while for mustahik there
will be empowerment and economic
prosperity. In addition, we as researchers
believe that this will happen in the long
term, where the addition of wealth or
welfare will be felt in the future, not in the
short term. So, to research it, longer time
panel data is needed.
The saving variable has a positive and
significant effect on the family's economic
welfare. When savings increase by 1 rupiah,
it can be following by an increase in the
family economic welfare of 0.0146 rupiahs.
This is because savings or investments
made by households will increase the
assets or assets of the home (Lee et al.,
2000). Savings, deposits, and investments
deposited within a certain period will
generate profits that will increase
household assets or assets. So that the
more households save, the more
prosperous the household's economy will
be(Anieceto C Orbeta, 2005). The increase
in the number of savings in the family is
influenced by financial inclusion and the
number of families (Anieceto C Orbeta,
2005). The higher the financial inclusion,
the higher the number of people's savings,
the increase in public investment, and the
higher public access to financial industry
products (Addury, 2018).
The variable was to borrow funds has a
positive and significant effect on family
welfare. Where households know where to
borrow funds, informal institutions can
improve family economic welfare by 0.122
rupiahs than households who know where
to borrow funds in non-formal institutions.
This is related to financial literacy in-
household knowledge of legal or illegal
financial institutions (Addury, 2018).
Understanding the right place to borrow
funds will positively affect managing assets
owned (Ovesen & Trankell, 2014).
Meanwhile, knowledge of non-formal or
175 | Determinants of Mother's Financial Literacy on Family Economic Welfare: Maqashid
Sharia Analysis
illegal places to borrow funds will make the
family's welfare not optimal or even make
the family economy unstable by borrowing
funds from unlawful institutions, such as
loan sharks with extensive interest systems.
(Waters, 2018).
The variable of pension funds has a
positive and significant effect on the
economic welfare of the family. When the
pension fund increases by 1 rupiah, it can
be following by an increase in family
welfare by 0.000987 rupiahs. This is
because households with pension funds
will be more secure in their future interest
even though they no longer have a fixed
income(Jinhee et al., 2017). In addition, the
existence of a pension fund means
increasing household wealth or assets so
that the family's economic welfare also
increases (Setiawati et al., 2018).
Mother's education variable has a
negative and significant effect on family
welfare. When the mother's education
increases by one year, it will be
accompanied by a decrease in family
welfare by 0.0118 rupiahs. This is an
exciting finding for further research.
Because if the mother's education
increases, it will increase the wealth or
interest of the family (Funds, 2018). This can
happen because the mother's education
takes longer to raise family expenses for
education costs (Baron, 2015). However,
education is still an investment for the
future. Mothers who are highly educated
will improve the family's economic welfare
in the future or the long term (Lahsana,
2016). And with education, mothers will be
able to gain enlightenment about Islamic
moral values and worldviews to carry out
the mission of the caliphate properly, as
well as to develop knowledge and
technology for family welfare. (Rahman &
Faizah, 2019).
The variable number of family
members has a positive and significant
effect on the family's economic welfare.
When the number of family members
increases by one person, it can be following
by an increase in the family economic
welfare of 0.0624 rupiahs. This is also an
exciting finding because, in general,
households with many members will make
the home a lot of burdens or dependents
so that the expenditure is more significant.
However, this study gave positive results
(Smith & Ward, 2015). This could be
because the addition of the number of
family members does not contribute as a
family burden but, on the contrary,
contributes to individuals who already have
their income but are not married or are not
married. (Anieceto C Orbeta, 2005). So that
the increase in family income is more
significant than the reduction due to
household expenses (Lee et al., 2000).
CONCLUSIONS
Mother's financial literacy as a proxy
for family welfare found that the
expenditure variable had no significant
effect on the family welfare variable. Social
consumption variables have a negative and
significant impact on family welfare, and
savings variables positively and
significantly impact family welfare. Variable
where the borrowing funds have a positive
and significant effect. On family welfare, the
variable of pension funds has a positive and
significant impact, the variable of mother's
education has a negative and significant
Siti Nur Azizah, Annisa Nur Salam | 176
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impact on family welfare; variable number
of family members has a positive and
significant effect on family economic
welfare,
The expenditure findings are
interesting because they are inversely
proportional to the perspective of
maqashidu sharia, where spending for
social activities such as zakat, infaq, or alms
will increase family welfare and is a hifdz al-
mall, namely a fair distribution of wealth.
The findings of the variables Savings,
pensioners, education, and several families
are in line with maqashid al-Syariah,
namely maintaining the soul (nafs). The
maintenance and development of the
human soul are reflected in the fulfillment
of its primary needs. And to ensure the
survival of the soul and its welfare in the
future.
Regarding the policy implementation
recommendations from this research, the
government and financial industry
institutions should always focus on
implementing financial inclusion, especially
for homemakers. To achieve financial
literacy for mothers and positively impact
household financial management, increase
savings and other investments, and access
to products. Financial industry products,
avoiding moneylenders so that it will also
positively impact Indonesia's economic
growth.
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