UNVEILING THE PSYCHOLOGICAL TRIGGERS OF OVERDEBT: INSIGHTS FROM THE TEACHING PROFESSION IN INDONESIA

Abstract

This study investigates the psychological triggers underlying over-debt behavior among teachers in Indonesia, a pressing issue with significant implications for personal financial stability and educational performance. The research focuses on identifying key psychological biases—over-optimism, present bias, herd behavior, anchoring, and mental accounting—that influence teachers' financial decision-making processes, potentially leading to excessive debt accumulation. Employing a quantitative cross-sectional survey design, data were collected from a representative sample of teachers across various regions in Indonesia. The findings reveal that all five psychological biases are significantly associated with over-debt behavior, with present bias and herd behavior emerging as the most influential factors. These insights highlight the critical need for targeted financial education and policy interventions aimed at mitigating the impact of psychological biases on financial behavior among teachers. The study's outcomes provide valuable recommendations for policymakers, educational institutions, and financial organizations to design effective strategies that promote financial well-being and reduce over-debt risks in the teaching profession.