THE FINANCIAL PLANNING AND FINANCIAL LITERACY OF EX-MALAYSIA INDONESIAN MIGRANT WORKERS

Indonesian migrant workers (IMW) face life difficulties after returning back to Indonesia. This
is a  contrary condition considering their contribution to their home family in Indonesia while
working abroad. Literature mentions that their financial planning is the root of the poverty
of ex-IMW. Therefore, this research adopts literacy theory to explain this phenomenon. This
research conducted a  survey among 548 ex-IMW and measures their financial literacy and
financial planning. This research also maps their asset ownership to examine the relationship
between financial literacy and asset ownership. Overall, this research documents that financial
literacy contributes statistically significantly and positively to financial planning. Furthermore,
this research shows that asset ownership is closely related to financial literacy. In a nutshell, this
research concludes that it is important for migrant workers to have good knowledge of financial
issues, because having good financial literacy helps the migrant workers to plan their finance and
budget much better, thereby helping them to avoid the poverty trap. Therefore, policymakers
such as migrant worker authorities and/or Indonesian embassies abroad have to institute financial
education programmes for migrant workers before they return to Indonesia.