The Impact of Financial Literacy on the Spending Behavior of Senior High

School ABM Students

A Quantitative Research Presented to the SHS Department of the HOLY CHILD

COLLEGE OF DAVAO - Green Meadows Campus, Davao City

In Partial Fulfillment of the Requirements in Practical Research 2

Agor, Alexa Joie E.

Alzate, Angelica C.

Cañizares, Tom Owen A.

Consarva, Kharym Nuriel A.

Fuertes, Janelle S.

Gabon, Veronica M.

Rivera, Princess Grace B.

Samson, Liz Hurley C.

Sasis, Bernadete Crisha C.

Taule, EG G.

September, 2024
 CHAPTER 1

INTRODUCTION

Background of the Study

According to Chaudhari (2023), financial literacy is the capacity to

comprehend and apply a variety of financial abilities. It is essential for making wise

decisions regarding one's own finances. Good financial literacy lowers impulsive

spending and encourages people to make responsible financial decisions by

enabling them to establish and follow budgets (Enhancing Financial Capability and

Inclusion in Azerbaijan, 2016). Students' spending habits are positively impacted by

higher financial literacy, whereas diminishing personal money management is

correlated with bad financial management. (Sundarasen et. al, 2016). Most students

do not have enough knowledge of personal finance, as shown by the fact that they

cannot handle many currencies or properly manage money (Rahma et. al, 2022).

The level of financial literacy affects the consumptive behavior of senior high

school students, and several research works have pointed to the aspect. Moderate

level of financial literacy reduces the effects of impulsiveness and enhances the

ability of students to manage their finances appropriately (Djajadiningrat, 2023).

Financial literacy plays a moderating role, which determines how decisions about

lifestyle result in consumptive behavior. The findings also show that students with

better financial literacy make better spending decisions. (Lubis et. al, 2023).
 Research also shows that students often spend a large portion of their

allowances on non-essential items, highlighting the need for better budgeting

skills. Many students face difficulties managing limited financial resources, leading

to low savings and credit card debt (Wentzel, 2016). Improving financial literacy

could reduce bankruptcy rates and enhance economic performance. Being able

to make wise financial decisions is essential since mistakes made now could have

long-term effects (Hastings et. al, 2018).

The younger generations in Malaysia are increasingly exhibiting uncontrolled

spending behaviors. When it comes to spending, people often regard money less

highly than preceding generations did. According to Esmail Alekam et al. (2018), the

rising cost of living in Malaysia has caused younger generations to spend their

money extravagantly, changing the country's spending habits and way of life.

According to the research of Bruhn (2019) he conducted a randomized control

trial in Mindanao and found that a comprehensive financial education program

improved students’ financial knowledge, saving behavior, financial planning, and

even had positive effects on parents' financial knowledge and behavior. In summary,

these papers collectively suggest that financial education can enhance the

knowledge of high school students. This study intends to determine if such

educational interventions have a substantial influence on senior high school students

in the Philippines' financial literacy by examining the effects of financial education on

their knowledge levels. (Dela Cruz 2019)

According to the research of Bedrejo Jr. et al. (2021), the Accountancy,

Business, and Management (ABM) students of Ateneo de Davao University have

good spending behavior. The students know their spending priorities and how to
control themselves from purchasing different products. The spending behavior of

these participants is formed by different factors such as their friends and family.

Furthermore, Davao City has not seen many of these kinds of investigations.

In light of this, the researchers felt obliged to the noted research gap. Living in the

21st century while spending behavior is a common phenomenon and it is crucial. As

part of the distribution process, the study's findings will be showcased in regional

forums. A copy of the research's conclusions and suggestions, which may be applied

to field-specific intervention initiatives, will be sent to participants and other

interested parties. Lastly, the researchers plan to present their findings at research

conferences and other forums. The researchers intended to publish their study in

relevant research journals if given the opportunity.

Statement of The Problem

In order to identify and interpret the spending behaviors of the senior high school

students, the following questions can be asked:

● What is the level of financial literacy among ABM students?

● What is the spending behavior on the ABM students?

● Is there a significant relationship between financial literacy and spending

behavior?
Review of Related Literature

This section presents relevant research on the characteristics of the Impact of

Financial Literacy Spending Behavior of Senior High School ABM Students and

other related topics in relation to the study. Since they are accurate and pertinent to

the study, the selected literary works are included. Moreover, these readings were

chosen in order to develop deeper comprehension and insights into the subject.

Financial literacy

Financial literacy is the ability to understand matters of a financial nature,

including a set of skills and knowledge that enable an individual to make informed

and effective decisions through their understanding of Financial. It is associated with

all attitudes related to decision making, behavior and financial knowledge. These

decisions include when to save, when to spend, managing a budget, choosing the

right financial products and being willing to take care of them. Young people's

spending habits will affect their lives early financial situation (Bona et al., 2018)

Furthermore, Several studies indicate that financial literacy is crucial for

effective money management, particularly among adolescents. According to Lusardi

et al., (2014), individuals with higher financial literacy tend to make more informed

financial decisions, leading to better spending behaviors and savings practices. This

suggests that enhancing financial literacy can positively influence the financial habits

of high school students.

Moreover, Young people with a high level of financial literacy would be those

who could give greater contribution to the state economy, so it is important to

research the level of financial literacy among young people (Caplinska et al., 2019).
 Spending behavior

Spending behavior describes how people divide up their money and decide

what to buy. It refers to the decisions people make about their spending patterns,

including sticking to a budget, buying on impulse, and placing needs before wants.

However, nobody has a consistent, set way of spending their money. The spending

behavior of young people and their lack of knowledge about money management

might result in expensive financial errors(Bona, 2017).

Furthermore, people’s spending behavior varies and differs according to

people’s race, religion, family background, ethnicity, and where they live. In addition,

It is very common for male students to gravitate towards masculine items such as

expensive gadgets, watches, and purses, while female students may be interested in

decorative items such as makeup or cosmetic products, as well as jewelry. Higher

financial literacy positively impacts students' spending behaviors, however

diminishing personal money management is correlated with bad financial

management (Sundarasen, Rahman, & Danaraj, 2016). Even with access to

financial services, students frequently lack the skills necessary to handle their money

wisely, which can result in problems down the road (Goldsmith et al., 2006, as

quoted in Darlynie, 2019).

One of the most difficult money challenges that they typically experience is

staying on top of what they are spending, which means that they have difficulty

controlling the way they spend and most of them are unsure on how to manage their

money wisely (Holland, 2016).

Spending Habits

Hoang et al., (2020) elucidated that habit is the degree to which people

engage in behaviors or execute their actions in an instinctive manner. This is a result

of insights from past encounters. Also, this phenomenon pertains to spending

patterns when purchasing meals online. Consequently, in this perspective, spending

patterns might be understood as a type of online food purchasing habits of people

who use apps to make recurring purchases at the same location or several locations.

Additionally, purchasing patterns, particularly those online, are frequently linked to

behaviors that entail the usage of technology (Venkatesh et al., 2012).

Spending habits has shown to be a growing issue, particularly among

students nowadays. According to Rios (2017), once Filipino students have money

hanging around their necks, they seem to feel uncomfortable from the weight, and so

they want to spend it away quickly. According to studies led by banks and economic

organizations, Filipino youths fork over money to buy cell phone load, to play

computer games at Internet cafes and to buy cigarettes and alcohol (Manotoc,

2010). As stated by Tempo (2010), a lot of the numbers of students appear to desire

the “in” trend, which the society is using “right now”.

Spending decisions are known to be greatly influenced by the economic

situations, personal preferences and group influence (Services, 2018). The higher

the socio-economic status of a consumer the expenditure will also increase

proportionately (Shuani, 2018). According to Gutter and Copur (2011), compulsive

buying was considerably associated with financial well-being when monitoring for,

financial learnings, and financial natures among students. Nga (2010) stated that the

level of education and majors also influence the general and financial product

awareness among youths.

Financial behaviors were related to age, race, income level, loan quantity, and

requirement for monetary aid (Copur, 2010). According to Silva (2018) in his article

about student's spending habits, students are getting more and more consumerism
every day. Students who used to live away from their home have too much brand

awareness and increase the chances of students buying things that they don`t need

leaving mass media a factor. Compulsive spending is a spending behavior

manifested by loss self-control of chronic overspending (Donald, 2018).

Theoretical Framework

Spending Behaviour and the Planned Behaviour Theory Base on the research

of Omakhanlen et. al (2021). Like in most topics in the social and behavioral

sciences, researchers face difficulties in accurately assessing the behavioral effect of

financial literacy. To evaluate the impact of financial literacy on the spending

behavior of individuals, however, researchers need information on variables other

than the current levels of financial literacy of respondents. This information includes

habits like engaging in extra-budgetary spending, spending on nonessentials, etc. In

this study, respondents were asked similar questions to determine whether they-

have a budget in place detailing how they intend-to- utilize their disposable income.

This is in line with the Planned Behavior Theory (PBT) which was proposed by Icek

Ajzen in 1985 through his article "A theory of expected behavior from thoughts to

actions." This emanates from the 1980 work of Martin Fishbein and Icek Ajzen called

the theory of reasoned action, where they postulated a link between people's beliefs

and behavior. In other words, what people are aware of is their attitude and

disposition that affect their behavior.

This study is anchored on the Financial Literacy Theory of Noctor et al.

(1992), that emphasizes the studies of how financial literacy affects the knowledge

and skills to manage one's financial resources effectively for lifetime financial
security. The ability to make informed judgements and take effective decisions

regarding the use and management of money.

Conceptual Framework
 CHAPTER 2

METHODOLOGY

Research design

Research Locale

Research Respondents

Data Source

Research Procedures

Ethical Consideration
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