That money thing again.


Well-Known Member
Nov 6, 2016
Back in Yogya I've become friends with the person I rent from when here, they're an expat who teaches at a local university. Having a catch-up coffee together it was explained the Indonesian partner has found themselves in a lot of debt through bad financial decisions in recent years causing some stress for them.

My friend has a prenup that distinguishes financial status before the marriage as well as separating earnings while they're married (I have no idea of exact details or legal status of the prenup) Although my friend has the capacity to alleviate some of the financial debt, they're somewhat reticent to do so as there's the likelihood of the partner continuing to dig financial holes for themselves as this person is just hopeless with get rich quick ideas and the like.

My advice was don't step in at all as a lesson has to be learned, and if they were to bail their partner out, it will be setting a precedent for further bail-out requests in the future. It will also lessen their own financial position. Most expats I know, mostly male, have a hidden bank account for themselves and very strict rules in their marriage or relationship where money is concerned so as to ward against issues.

I do wonder sometimes why so many Indonesians find money management so difficult. The Indonesians I know who struggle with money management generally either have no long term plan living only for the day, or suffer chronically from keeping up appearances which finds them constantly buying new phones,gadgets, cars and other crap that they can't afford or don't really need.
You could probably add most nationalities to that list.

Table 1: Amount of deposits and debt among Australian Households (RBA 2014 Data)

Average Household Deposits Average Household Debt
25 – 34 years old $8,000 $91,000
35 – 44 years old $8,000 $210,000
45 – 54 years old $10,000 $175,000
If DFA’s data is extrapolated across the entire Australian household sector, it is clear that many Australian households holding significant sums of debt do not have a sufficiently large buffer to mitigate unexpected changes to their personal cash flow.
I feel like a lot of people in my home country are bad at handling their finances. Back there they are assisted by unemployment benefits/ strict conditions on interest rates/ credit checks. I think, in a country like Indonesia where that protection is unavailable its only natural that people will have some money issues.
I think people everywhere have money problems.

However, some countries make it easy to discharge credit card and other debts. You can write off 300k in debt fairly easily in the US. Just try that with banks in Indonesia.
One big difference I see in financial planning is the effects from a culture where children will typically care for their parents when they are old. As a result, saving money for retirement is rarely a priority. I don't see that particularly as a bad thing, just different. The prevalence of debt and stupid financial decisions seems, sadly, to be universal.
Two of my household workers have debt in excess of Rp 10mil, at their village credit union which charges something like 20% interest. It was for cremation costs for a relative (not parent), which I don't understand why they should shoulder, but they did anyway. They're also putting siblings through school, even though they themselves did not finish elementary education. Cause why would you send a girl to school. A Balinese village girl is expected to work for her family until the time they get married, at which point they then work for the husband's family.

They also don't understand interest, so I slowly educated them on the fact that they're paying back way more than they borrowed. The youngest one finally on her own initiative told me not to pay her her full salary in cash every month, cause it always ends up disappearing. So I am opening her a savings account and paying into it instead.

That said, common sense money education seems to be lacking everywhere these days, and people going into chronic debt is not a uniquely Indonesian problem.
I think a factor is poor financial education. There are many that are new to Indonesia's developing into a middle class. A lot of generations lived very hand to mouth, so they simply don't have much of a social or parental reference for certain financial decision making.

There is another cultural aspect that many family members bail out each other and money seems to flow more freely. It is less of an incentive for both parties to save. I have seen individuals with a gambling or drug addiction drain a whole family. The strong cultural ties of the family unit in Indonesia has an enabling factor for poor behavior for an individual member.

It is interesting how prevalent the practice of arisan is. This is more of a forced practice of saving from very poor communities. It is still heavily used in Indonesia.

Back to the topic of the bailout. A bailout without conditions and no desire for change from the individual is enabling the poor decision making that lead to this.
About 40% of Americans can't cover $400 in emergency expense without going into debt. The latest median household income is $61,400 annually, so that $400 is less than a third of a weekly paycheck, or less than 2 days' pay.

A lot of people can't handle money. While many Indonesians are susceptible to fads and 'gengsi', many Americans can't help but to "keep up with the Joneses." It's sadly common in rural areas for guys to go into $50K of debt for a big 'ol pickup truck, they feel less of a man otherwise.
I was talking with a Maybank branch manager from Gianyar last night who said their bad debt runs at around 20%.
I was talking with a Maybank branch manager from Gianyar last night who said their bad debt runs at around 20%.
Note to self: don't put any money in Maybank.
As per D.'s post above, if really their bad debt runs at 20% it's freaking... or a great news for debt collectors because that's a guarantee of having a job 7/7... at least till bankruptcy.

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