The Role of Financial Behavior Biases and Materialism in Shaping Teachers’ Debt Propensity

Abstract

This study explores the influence of financial behavior biases and materialism on teachers’ propensity toward indebtedness in West Java Province, Indonesia. Debt is increasingly regarded not only as a financial instrument but also as a behavioral outcome shaped by psychological and value driven factors. Drawing on behavioral finance and consumer behavior theories, the research focuses on how cognitive biases and materialistic orientations affect financial decision making among educators. The study employed a quantitative survey method with purposive sampling, involving 150 teachers as respondents. Data were collected through a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM), which allowed for testing the measurement and structural models simultaneously. The empirical results confirm that both financial behavior biases and materialism have a positive and significant impact on teachers’ propensity toward indebtedness. Financial behavior biases demonstrate a stronger influence compared to materialism, suggesting that cognitive distortions play a more dominant role than value orientation in shaping borrowing tendencies. These findings validate behavioral finance perspectives, which highlight the role of psychological biases in undermining rational financial decision-making, and complement consumer behavior literature that associates materialism with debt reliance. By situating the analysis in the context of teachers, the study contributes to expanding empirical evidence on indebtedness propensity in professional groups with stable but limited income, offering further insights into the behavioral determinants of debt.