Spending Behavior of Grade 12 ABM Students
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SPENDING BEHAVIOR OF GRADE 12 STUDENTS
IN UNIVERSITY OF BAGUIO
Espique , Drexian
Fernandez , Alvin
Laurente , Gabriel
Saturnino , Darryl
University of Baguio Senior High School
Introduction
Money is the amount of something available or needed for particular purpose,
word that is usually associated with students and school expenses. Spending behavior has
never been stable, especially among university students. Free from the comforts of home,
many students are experiencing being on their own for the first time. One of the
challenges they face is budgeting in their money spent.
According to The Association of International Educator’s study, Students who
budget and save tended to have higher scores on the social learning opportunities indices
than those who do not budget and save.
The spending conduct of youth and their constrained comprehension of cash
administration invigorate propensities that may result to expensive budgetary errors today
and later on. The adolescent of today are developing in a society of obligation assisted by
luxurious ways of life and simple credit. It was proven that adolescence spend
significantly. It was also found out that the ethnic identities had another difference at
purchasing amounts of goods, especially on consumption goods (Villanueva ,2017). At
this present age, student’s needs have increased because laptops are required for
assignments and ventures. Propels in innovation have likewise prompted expansion of
understudy's costs. Student’s expenses are directly associated to student’s resources.
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Being wise in one’s spending will lead to improved available resources and reduced
financial problems during education in college students of Surigao del Sur State
University (SDSSU) and Saint Michael College (SMC) in Cantilan, the northernmost
municipality in the province of Surigao del Sur, Philippines.
The students in University of Baguio can practice basic money management
techniques, ABM students can feel confident about their ability to manage their finance.
There are easy solutions to help students avoid making these common money
management mistakes. students should do to gain control over their financial lives is
create a spending plan. Having a spending plan will allow students to see where their
money is going and where they can cut back their spending. Students need to concentrate
on what they really want out of life in order to help them avoid overspending.
Review of Related Literature
Koc and Ceylan (2012), stated that consumers in lower status groups spend the
biggest portion of their income on food products. He added that the highest status
consumers always check the price labels of the food products with a high
percentage(66.67 percent) before purchasing. A total of 77 percent of study respondents
stated that they were open to spend in trying new food products. Meanwhile, consumers
within the top socioeconomic groups consider food ingredients carefully before
purchasing.
According to Tew (2012), the spending behavior of students in modern times has
emerged as an essential concern in our society. He concluded that socioeconomic status
issue influences the spending behavior of the students. Koc and Ceylan (2012), stated that
consumers in lower status groups spend the biggest portion of their income on food
products. He added that the highest status consumers always check the price labels of the
food products with a high percentage (66.67 percent) before purchasing. A total of 77
percent of study respondents stated that they were open to spend in trying new food
products. Meanwhile, consumers within the top socioeconomic groups consider food
ingredients carefully before purchasing.
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According to a research of Westwood College in US (2015) most of the seniors
and college students budget the least of their allowance for transportation, books and
supplies but 40% on optional activities entertainment, apparel and services, travel and
vacation. Stollak (2010) stated that freshmen were much more likely to spend all their
dollars quickly than juniors and seniors. This could be due to lack of awareness of their
budget or not planning appropriately. Contrary to this, Bailey. et. al(2013) said that
juniors and seniors spent significantly more than freshmen and sophomores on recreation,
food, general merchandise and miscellaneous items. Meanwhile, Villanueva (2017)
claimed in his study that, freshmen and senior students exhibit higher spending behaviors
while sophomores and juniors exhibit less spending.
Theoretical Framework
John Maynard Keyne’s Debt, Credit, and the Life-Cycle Hypothesis
John Maynard Keyne’s LCH replaced an earlier hypothesis developed by economist in
2012. He believed that savings were just another good and that the percentage individuals
allocated to their savings would grow as their incomes rose. This presented a potential
problem in that it implied that as a nation’s incomes grew, a savings glut would result,
and aggregate demand and economic output would stagnate. Subsequent research has
generally supported the life-cycle hypothesis.
The life-cycle hypothesis (LCH) is an economic theory that pertains to the spending
and saving habits of people over the course of a lifetime. The concept was developed by
Franco Modigliani and his student Richard Brumberg in the early 1950s.
Consumer Theory
Consumer theory is the study of how people decide to spend their money based on their
individual preferences and budget constraints. A branch of microeconomics, consumer
theory shows how individuals make choices, subject to how much income they have
available to spend and the prices of goods and services. Understanding how consumers
operate makes it easier for vendors to predict which of their products will sell more and
enables economists to get a better grasp of the shape of the overall economy
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Significance of the Study
This study will benefit the following:
Students: This study could bring awareness to the students in their current
condition with regards to their spending behavior
Parents: This study will provide sufficient information on the spending pattern of
their children and can help their children save money for future
Future Researchers: Future Researchers may use the result of this study as a
reference data in conducting new research
Objective of the study
1.) To determine the spending pattern of Grade 12 students
2.) To find out the factors that affects the student in their spending behavior
METHODOLOGY
RESEARCH DESIGN
This study will use quantitative and the method to be used is descriptive because
quantitative research relies on measuring variables using numerical system to formulate
facts and uncover patterns in research. Descriptive because it enables us to easily
determine the spending pattern of every student and the factors that affects their spending
behavior.
POPULATION OF STUDY
The total population Grade 12 ABM students in University of Baguio are 242 students.
The researchers will use Stratified random sampling to identify the participants who will
be participating in the study. Using the Slovin formula the sample size will be 150
students wherein there will be 25 respondents coming from all 6 sections of the grade 12
ABM strand.
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DATA GATHERING TOOL
To obtain the data that will be needed in the research, the researchers will prepare a close
ended questionnaire. The questionnaire will have three parts: The first part of the
questionnaire is the personal information of the participants including the information
about the study, why is the study being conducted as well as the parents’ consent to be
given to the participants. The second part of the questionnaire will contain questions with
different options on how do the grade12 students spend their allowance. The third part
will consist of questions on what are the factors that affect the student spending behavior.
DATA GATHERING PROCEDURE
The researchers will ask approval from the principal of the University of Baguio Senior
High School through a letter for the conduct of the study. When the study is approved,
the researchers will ask the secretary of the University of Baguio for the names of the
students enrolled in the ABM track. Next is to give the informed consent to the students
and parent’s consent will be given who are below [Link] researchers will obtain the
inform letters from respondents and the researchers will explain the contents of the study
and its purpose. Before gathering data, the researchers will ask permission to the teachers
in charge for each classroom if they could conduct the study in class before they enter.
Once it is done, the researchers will give questionnaires to the respondents who were
given the consent to participate. The researchers will assure confidentiality regarding the
information gathered.
Treatment of Data
The collected data will be tallied manually before making a table showing the
results. The researcher will create a table consisting of the frequency and rank of the
answers. Descriptive statistics such as mean and percentage are considered in analyzing
the data.
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Sample Table:
Where do you spend your Tally Marks Total
allowance?
Food
Entertainment
Clothes
Ethical Considerations
The purpose and objectives of the study will be explained to the respondents in
order for them to understand the content of the study. Student’s permission to participate
in the study will be given through the informed consent. The researchers will make sure
that all given information will be strictly confidential and be kept, the identity of
participant remains unknown. The respondents are allowed not to answer questions that
are inconvenient for them and are also given the right to withdraw from answering the
questionnaire. After gathering the data needed in the study we will inform the
respondents about the results.
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References:
Arnold, K (2019). The impact of the spending habits of international students on the
economy of university cities – Case study: Hungary. Retrieved from June
2019 from [Link]
Angeletos, G., Laibson D., Repetto, A., Tobacman J., & Weinberg, S. (2015). The
Hyperbolic Consumption Model: Calibration, Simulation, and Empirical
Beznoska, Martin and Ochmann, Richard R., Liquidity Constraints and the Permanent
Income Hypothesis: Pseudo Panel Estimation with German Consumption
Survey Data (July 1, 2012). DIW Berlin Discussion
Bailey, C.A, et al. (2013). Local spending by traditional college students: A descriptive
case study. Journal of Personal Assessment, 16. Retrieved from
[Link]
Bona, J.T (2018). Spending behavior among college students. Journal of fundamental
and applied science. Retrieve August 31 2018 from
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Economic Planning Unit USA (2015) Association of International Educator’s
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Gutierez, R.C (2014). Consumption and spending patterns at St. Olaf College
Consumption To Predictable Income Growth (2012) 18. Retrieved August
27,2018
Hayhoe, C. R., Leach, L. J., Turner, P.R., Bruin, M.J., & Lawrence, F. C. (2012).
Differences in Spending Habits and Credit Use of College Students.
Journal of Consumer Affairs, 34(1), 113-133.
Keynes, John Maynard. 2012. The General Theory of Paradox, Interest and Money.
New York: Harcourt, Brace.
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Koç, B. and Ceylan, M. (2012), "The effects of social‐economic status of consumers on
purchasing, behaving and attitude to food products", British Food Journal,
Vol.114No5, pp. 728-742. [Link]
Laibson, D. (2012). Life-Cycle-Consumption and Hyperbolic Discount Functions.
European Economic Review, 42(3-5),861-871.
Richard A. Feinberg, Credit Cards as Spending Facilitating Stimuli: A Conditioning
Interpretation, Journal of Consumer Research, Volume 13, Issue 3,
December 1986, Pages 348–356, [Link]
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Shahryar, Sorooshian and Tan, Seng Teck* (2014) Spending Behaviour of a Case of
Asian University Students. Asian Social Science, 10 (2). pp. 64-69. ISSN
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Theoretical Background on spending habits. (2017, May 21). Retrieved from
[Link]
Tew (2012)Spending Behavior of Student in Modern Times.
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from [Link]
Villanueva,S "An Analysis of the Factors Affecting the Spending and Saving Habits
of College Students" (2017). Economics Student Theses and Capstone
Projects. 36 Paper No. 1231. Available at SSRN:
Villanueva, S. (2017). An analysis of the factors affecting the spending andsaving habits
of college [Link] Influencing Financial Behaviors,4.
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Stollak, M. (2010). Student budgeting and spending behaviors: A comparative study.
Journal of Behavioral Studies in Business. Retrieved August 23, 2018
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Common questions
Powered by AIThe study on the spending behaviors of Grade 12 students utilized a quantitative research approach with a descriptive design . This method involved measuring variables using numerical systems to formulate facts and uncover patterns in the students' spending behavior. Stratified random sampling was applied to select participants, ensuring diverse representation across approximately 150 students from six sections . Data was collected through a structured, close-ended questionnaire divided into parts addressing personal information, spending habits, and influencing factors. Descriptive statistics like mean and percentage were used for data analysis .
The findings from this document align with the life-cycle hypothesis by indicating that students' spending behaviors are influenced by current income levels and anticipated future earning potential. The life-cycle hypothesis posits that individuals plan their consumption and savings to maintain stable levels across their lifetime, and students' limited present income results in lower saving rates and reliance on credit or parental support . The observed behavior challenges certain economic theories, like consumer theory, which suggests choices are made purely from income and price constraints; this broader perspective incorporates socio-cultural influences and technological advances affecting students' spending beyond pure economic rationale . Overall, students' behaviors reflect both individual economic adaptations and broader social influences.
The life-cycle hypothesis suggests that individuals' consumption and saving habits change over their lifetime in response to changes in income. As students are typically early in their financial lifecycle, they might have limited income, which affects their ability to save significantly. According to the hypothesis, individuals aim to smooth consumption over their lifetime, leading to borrowing during early low-income phases. University students might rely on credit or have minimal savings during their study years, reflecting the limited income perspective of the life-cycle hypothesis . This can also explain why students may not save substantially but spend according to immediate needs and lifestyle, often supported by student loans or parental assistance .
Socioeconomic status significantly affects students' spending behavior on food products. Koc and Ceylan (2012) found that consumers in lower status groups spend a larger portion of their income on food products compared to those from higher status groups, who are more likely to check price labels with a high percentage (66.67%) before purchasing. Moreover, individuals in higher socioeconomic groups tend to consider food ingredients carefully before making purchases . These behaviors highlight a stratification in spending patterns driven by income levels and priorities.
Several factors influence the spending behavior of Grade 12 students at the University of Baguio. These include socioeconomic status, which affects their priorities and ability to allocate funds to different needs. Additionally, cultural identity and peer influence play roles in shaping their consumption patterns, particularly with regard to trendy items or social activities that students may feel pressured to engage in . The necessity to maintain certain technological standards, such as owning a laptop for academic requirements, further influences their spending behavior . These elements combined with individual financial literacy levels dictate how students manage their finances.
Students' financial management strategies have a profound impact on their social learning opportunities. Those who budget and save tend to score higher on social learning indices, indicating better opportunities for engagement and participation in community or campus events . Effective financial management allows students to manage their resources wisely, thus reducing stress and enabling them to engage in extracurricular activities that contribute to their social and educational growth. Conversely, poor financial management may restrict participation due to the inability to afford such activities, thus limiting their social learning experiences .
Adopting a spending plan in higher education allows students to manage their financial resources more effectively. The research implies that with a spending plan, students can understand their financial situation better by seeing where their money is going, enabling them to cut back on unnecessary expenses and focus on essential needs . Such financial literacy enhances their ability to manage deferred gratification and helps in avoiding overspending, thus reducing their financial stress .
The spending habits between freshmen and upperclassmen in college differ significantly. Freshmen are more prone to quickly spend all their budget, possibly due to a lack of awareness or inadequate planning skills . In contrast, juniors and seniors tend to spend more on recreation, food, general merchandise, and miscellaneous items . This difference may be attributed to juniors and seniors having more disposable income or better financial planning skills developed over time, allowing for discretionary spending. Additionally, upperclassmen may have different social needs and experiences influencing their spending patterns .
The research on student spending patterns acknowledged several ethical considerations. Researchers ensured informed consent from participants and, where applicable, from their parents, especially for students under 18 . Participants' identity and responses were kept confidential, with researchers responsible for maintaining anonymity and allowing respondents to skip uncomfortable questions or withdraw from the study at any point . Furthermore, the purpose and objectives of the research were clearly communicated to participants, ensuring transparency and understanding of the study's implications .
Technological advancements have significantly increased the expenses of modern university students. For example, owning laptops has become a necessity for assignments and projects, contributing to the rise in student expenses . Moreover, rapid technological innovation may lead students to frequently update their devices or subscribe to digital services essential for their education. These costs add to the financial burden students face, influencing their budgeting and spending habits .