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Budgeting and Spending Behavior
of Students: Developing Financial
Responsibility
Budgeting and Spending Behavior of Students
Introduction
Money plays a significant role in the everyday life of every person, including students. It is generally accepted as a medium of exchange, a measure of value, and a means of payment. Students should have the knowledge and skills to manage their money effectively, including budgeting and spending. Budgeting involves making a plan on how to use and allocate money, while spending refers to consuming money for needs and wants, especially in a school setting.
An allowance is a tool for teaching students how to manage money. It is an amount of money given to students, usually on a weekly or monthly basis, to cover their daily expenses and purchases. Good money management skills involve the processes of budgeting, saving, investing, and spending.
Before entering college, schools often teach students about personal finance, especially those in the Accountancy and Business Management (ABM) strand, to help them understand the value of saving money. Students should be able to distinguish between their wants and needs when making purchases.
Research Objectives
This research aims to describe the dos and don'ts of spending money, as well as the possible ways for students to budget their money and reduce their expenses. The researchers want to inform students about the two principles of spending and budgeting: 1) Learn to behave when you have everything, and 2) Learn to be contented when you have nothing.
The specific research objectives are: 1. What are the characteristics of the respondents? 2. What are their preferences on buying goods? 3. How do the respondents manage their allowance? 4. How does their environment affect their budgeting and spending behavior?
Significance of the Study
This study will provide a brief description of how students spend and budget their allowances. The findings will contribute to the understanding of students, teachers, and other faculty members. The objectives of this study are to evaluate the budgeting and spending behavior of students.
For the researchers, this study will help them understand the dos and don'ts of spending money and how to manage their own money for future purposes.
For the students, the findings will help them improve their budgeting and spending habits, as well as learn how to lessen their expenses.
For the parents or guardians, this study will help them guide their children on how to manage their own money, so they can become less dependent on their parents' money.
Scope and Delimitation
The focus of this study is to identify the budgeting and spending behavior of Grade 12 Accountancy, Business and Management (ABM) students at the University of the East, Manila. The data will be collected through a survey with the consent of the respondents. The researchers will use the Simple Random Sampling technique to randomly select the respondents from the Grade 12 students in different academic tracks, including ABM.
The study will be limited to the budgeting and spending behavior of Grade 12 ABM students. The researchers will evaluate the students' knowledge about the proper way of budgeting and spending their money, as well as the possible ways for them to budget their money and reduce their expenses.
Operational Definition of Terms
Budgeting: The process of creating a plan to spend your money. Expense: The cost required for something; the money spent on something. Finance: The study and system of money, investments, and other financial instruments. Income: The money received, especially on a regular basis, for work or through investments. Spending: The act of paying money, usually in exchange for goods or services.
Review of Related Literature
Literature Review
Students and other younger age groups are the most mobile consumers, often using their smartphones to buy online, click on advertisements, and receive coupons, offers, and deals from various businesses. They are also very brand-conscious, especially when it comes to gadgets, and tend to seek the best deals.
According to Godfrey (2015), an allowance is a tool for teaching children how to manage money, not an entitlement or a salary. Good money management skills involve the processes of budgeting, saving, investing, and spending.
Budgeting and Spending Habits
According to Joseph Oloba (2018), students' spending habits have a significant effect on how they will manage their money in the future. Students should make wise choices in handling their money and fulfill their financial obligations to ensure a safer and stress-free life. Managing students' money even while they are in school can help them balance their cash inflow and outflow.
Importance of Budgeting
Klariz Angcanan (2018) states that students should consider the budgeting process to provide them with an accurate performance to achieve their goals. Students must know how much money they need to spend and how much money they expect to earn. Budgeting helps students avoid stress by focusing on their goals and avoiding unnecessary spending.
Budgeting Strategies for Students
According to Hughes, students should budget for the following common expenses: (1) Course-related costs, (2) Transportation, (3) Food, (4) Entertainment, (5) Utilities, (6) Internet, (7) Insurance, (8) Toiletries, (9) Clothes, and (10) Subject-specific costs.
Reasons for Overspending
Alessandra Anonas (2015) suggests that millennials, including students, often spend their hard-earned savings on non-essentials to vent out stress, indulge, or reward themselves. Students may not be fully aware of their spending habits and the impact on their finances.
Strategies to Save and Spend Wisely
According to www.affordablecebu.com (2018), there are several ways for students to save more and spend less, such as: 1. Save first before spending
- Avoid unnecessary spending 3. Set aside money for future needs 4. Use "money jars" 5. Walk instead of using transportation 6. Apply for scholarships 7. Join extracurricular activities with scholarship or discounts
- Buy second-hand books 9. Make personalized notebooks 10. Limit food expenses 11. Consider becoming a working student 12. Plan expenses carefully
Influence of Social Learning on Spending Behavior
According to social learning theory, spending behavior can be a learned behavior transmitted by parents and other influential individuals, often passed down from generation to generation. However, parents can also teach students how to handle money properly, enabling them to become independent and not rely solely on their parents' money.
Types of Spending Behavior
There are two types of spending behavior: planned spending behavior and unplanned spending behavior. Planned spending behavior involves mental budgeting and allocating money to different mental accounts to resist further expenses. Unplanned spending behavior occurs when consumers are not aware of the things they should buy or make impulsive purchases.
Factors Influencing Spending Behavior
According to a study by Schreiber, as cited in Karki (2000), five criteria must be considered when studying consumer buying behavior: (1) price consciousness, (2) quality consciousness, (3) original/unusual decision, (4) planned decision, and (5) nonconformist decision.
Conceptual Framework
The conceptual framework presented in the text shows the relationship between the independent variables (self-control, life cycle, education, lifestyles, allowance, and unexpected expense), the intervening variables (savings and default), and the dependent variables (mental budgeting, financial management, and right spending).
Budgeting and Spending Behaviour of Grade
12 ABM Students
Research Materials
The researchers used various materials to conduct this research study. They utilized pen, pencil, and paper to write down ideas, plans, and a timetable to organize the research. Additionally, they used a laptop to enter the gathered data and ensure the reliability and accuracy of the survey questions.
The researchers provided consent forms to the participants, which outlined the study's procedures, benefits, risks, and purpose. The survey form included the respondents' profiles and the variables related to the research topic.
The researchers employed a Likert scale to measure the respondents' responses, with the following interpretation:
| Scale | Interpretation | | --- | --- | | 1 | Strongly Agree | | 2 | Agree | | 3 | Disagree | | 4 | Strongly Disagree |
Research Method
The research study was conducted at the University of the East – Manila, located at 2219 Recto Avenue, Sampaloc, Manila, 1008 Metro Manila. The respondents were 100 Grade 12 students from different strands at the University of the East – Manila.
