How to manage finances in the lower middle society in rural areas?

ABSTRACT : This study aims to determine the financial behavior of middle-to-village people and determine the factors that influence the financial behavior of local communities. Data were collected by conducting interviews directly with respondents. The questionnaire used refers to the national standard financial literacy series questionnaire issued by the Indonesian financial services authority. Respondents were randomly selected in one village in Indonesia of 60 respondents. Analysis of the data used is confirmatory factor analysis. Based on the results of the study showed that only 8% of rural communities have life and permanent disability insurance. The habits of rural communities tend not to have credit cards/loans, at 77.35%. A significant factor influencing their financial condition is the need for fund reserves as emergency funds (p = 0.072), investments (p = 0.066) and pension funds (p = 0.032). Rural communities, 60% have problems in managing finances, in other words, poor financial conditions. To improve rural financial conditions into good financial conditions, it is necessary to have savings as an emergency fund in a bank account, cash or precious metals at least 3 times the monthly costs, investment funds, and pension funds. Of these three factors, the most dominant factor is planning for pension funds.