The spending habits of the first-year students in the ISB of banking academy

ABSTRACT
In the myriad of disciplines in personal financial management, the budget plan of college
students remains an unexplored issue. These youngsters, standing on the threshold of their
lives, are not as entirely dependent on their families for finance as they are when in high school,
but not yet sufficiently mature to live totally by themselves. As the title suggests, the aim of this
paper is to reflect on the spending habits of an average first-year students. Based on the data
obtained from research carried out within International School of Business of Banking
Academy by quantification with survey and reviewed literature, our project analyze and assess
the various characteristics of students' earning, spending, and financial planning, identify
latent problems concerning these subjects and simultaneously suggesting possible solutions.
However, this study still has some limitations, so a further research should be required.

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The spending habits of the first-year students in the ISB of banking academy

TABLE OF CONTENTS

Abstract………………………………………………………………………………... i

List of figures/ tables………………………………………………………………….. iii

1. Introduction……………………………………………………………………….. 1

2. Method…………………………………………………………………………….. 2

3. Results……………………………………………………………………………... 2

4. Discussion of findings……………………………………………………………... 4

4.1. The purposes of spending……………………………………………………… 4

4.2. The factors affecting spending………………………………………………… 5

4.3. The planning…………………………………………………………………. . 5

5. Recommendation………………………………………………………………….. 5

6. Conclusion………………………………………………………………………… 6

References……………………………………………………………………………... 7

Appendices…………………………………………………………………………….. 8

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The spending habits of the first-year students in the ISB of banking academy

LIST OF FIGURES/ TABLES

Figure 1: ISB students' purposes of spending…………………………………… 2

Figure 2: ISB students' monthly spending………………………………………. 3

Figure 3: The factors affecting the spending habits of ISB students……………. 3

Figure 4: ISB students' frequency of planning monthly spending……………… 4

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The spending habits of the first-year students in the ISB of banking academy

1. Introduction
Along with the development of economy and society, the Vietnamese economy that has
experienced a rapid growth, which lead to increase in the country's per capita income from 98
in the US in 1990 to US $ 729 in 2006 (Do, 2007). This rapid rise, in turn, brings a new interest
for Vietnamese people to manage personal finance such spending habits - an area that has been
forgotten as a result of an underdeveloped economy. The attitudes toward the use of money,
which is often called spending habits, affects relationships, family stability and even success
at work (Cummins, Haskell & Jenkins, 2009). A person has the ability to manage his money,
which is one of the things needed to succeed in life.
Effective financial management strategies are important to all members in the society,
including college students. It has been hypothesized that the ability of managing students'
finance is the key to their success and sustained learning. Financial management is essential
for students, personal and academic success. Students who can manage their finances are more
likely to organize their lives and manage their time in a way that is conducive to good academic
results (Furnham, 1999). However, a fact is that students in general, and in ISB of Banking
Academy do not know how to control their spending. These academic years in universities
represent the transition between teenagers and young adults - a period full of changes and
alterations, especially in the first year general student stage, namely outgoing peers each of
first-year ISB students of Banking Academy.
In fact, there have been many studies conducted to investigate the topic, but all of them
reflected one aspect of the issue. In detail, in a previous study, the author found out that gender
has a great influence in predicting financial management activities, with female students
employing a greater number of financial practices, and a path analysis model shows the gender
difference in the relationship between financial practice and financial stress (Hayhoe, Leach,
Turner, Bruin & Lawrence, 2000).
Despite the promising results, these studies did not mention the ways of using money by a
specific object. It is university students, which is necessary to investigate the spending habits
of the subject in general and of the students at the ISB where I am currently studying. Therefore,
this study is conducted to answer the following three questions: “What do the first-year ISB
students usually spend money for?”; “What factors affect their spending habits?” and “How
do they plan their budget?”. Furthermore, in each problem, there would be highlights of
behavior, thoughts and habits of students for their spending, along with possible suggestions
for proper financial management of the first-year students in ISB.

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The spending habits of the first-year students in the ISB of banking academy

2. Method
In order to get information for the study with the purpose of understanding ISB students'
spending habits, a quantitative research was conducted. Thus, this involved the design and use
of a quantitative survey instrument. In fact, quantitative methods offer an effective of
examining, they not only provide powerful information and give an account of the extent as
well as the nature of a phenomenon. Besides, it also allows a certain level of generalization
from the results to a wider population than that surveyed.
The data used in this report is acquired from a survey carried out within International School
of Business (ISB) of Banking Academy. At the beginning , a questionnaire consisting of 6
multiple-choice questions was designed with respects to my three research questions. In the
next step, 75 ISB university students of the first academic year were randomly chosen to fill in
a questionnaire designed in the relation to my three research questions. Paper questionaires
were used where participants will be required to answer twelve questions. All responses will
be documented, so the data could be reused for the later research. While successfully capturing
the attention of the subjects, this approach, brings participants the feeling of being higher
appreciated and more involved compared to conventional separated ones. Therefore, the
acquired data can be considered to be genuine and trustworthy.
3. Results
The results of the survey were conducted to discover spending habits the first-year students in
ISB with the participants of 75 ISB freshmen. As expected, the results reflect their spending
habits fully.
90%
80% 77%
72%
70%
60% 53%
50%
40% 32
30%
20%
20%
10%
0%
Basic needs Rent with bills Entertainment Study Travelling

Figure 1: Students' purposes of spending

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The spending habits of the first-year students in the ISB of banking academy

As can be seen from Figure 1, more than 77% of those who regularly pay for the personal needs
such as food, drinks, clothing and shoes, which is followed by 72% of all students spend on
travel again. In addition, learning is only concerned by 32% of students.

9% 13%

Less than 1 million

VND
1-3 million VND
30%
3-5 million VND

More than 5 million

48% VND

Figure 2: ISB students' monthly spending

It can be clearly seen from Figure 2 that the number of students who spend an average of 1-3
million VND accounts for the greatest percentage (nearly 50 per cent).
90%
80% 77%

70%
60%
50%
40%
31%
30%
20% 13%
10%
0%
Family economic Awerences of Passion for
circumstances spending shopping
Figure 3: The factors affecting the spending habits of ISB students

Looking at the details provided in Figure 3, nearly 80% of ISB students whose expenses are
governed by their family's economic circumstances, followed by their shopping.

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The spending habits of the first-year students in the ISB of banking academy

12%

Never
27% Sometimes

61% Always

Figure 4: ISB students' frequency of planning monthly spending

In response to the question of whether or not they plan out their spending, the overwhelming
majority of students admit that they never make a plan for monthly spending ( 61%).
4. Discussion of findings
The project, similar to other research, is not without its limitation on the subject of the inability
to answer the questions from all perspectives of university students spending habits. The
obtained figures were collected in a relatively limited scope as the participants came in a
particular faculty from a single university. However, the research still managed to ensure
generalizations from obtained data thanks to the diversity of students, perceptions and different
social backgrounds.
4. 1. The purposes of spending
From the results shown in Figure 1, it is natural to conclude that most ISB students spend a lot
on shopping especially on clothing. This result is not unexpected, seeing that most ISB students
are interested in their appearance and it is obvious to pay for rent. First-year college students
have to change their living and learning environments differently than they used to, and they
are not yet aware of their jobs. They are in the age of being able to show off, like to show off
and care about their looks by shopping. Besides, they have to pay for rent with their utility bills
or the Internet because it is very obvious that they have to live away from home and have to
rent a room to live. On the other hand, contrary to popular belief, our study of ISB students'
spending on buying books shows that only a small number of students are surprisingly
interested in increasing knowledge through books. This phenomenon is explained that they
have paid extra books for school study for the school and they do not need to buy more books

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The spending habits of the first-year students in the ISB of banking academy

every month. The fact that our survey was made when the end of the school year is approaching
makes the trend of buying clothes for travel or vacation more prominent, while buying books
at the end of the school year has become irrelevant.
4.2. The factors affecting spending
In Figure 3 it can be seen that the factor influencing their spending habits is family economic
conditions. This is understandable because their main source of income is mostly from their
parents' allowance. In addition, ISB students' average monthly allowance is quite large, which
promotes uncontrollable spending without savings. This is explained that their family
conditions are mostly good or very good so instead of saving they spend a lot more than many
people think for the first-year college students. On the other hand, another noteworthy point
that our survey found was that even though they did not have to worry about monthly payments,
most of ISB students' spending is dominated by a passion for shopping rather than their
unaware spending.
4.3. The planning
The results of Figure 4 in the survey have shown that make make it transparent that students
rarely have any plan for their budget. It also reflected the fact that the majority of them
complain about their usual running out of money, especially at the end of each month. First of
all, they are ISB students who can understand that the majority of students here have good
family economic circumstances, so their benefits from their parents are great, it is the reason
that students do not need to think about spending properly. Besides, they have not learned about
managing money or spending properly. Therefore, it is safe to assume that a tight budget is a
common feature of any student. This shows a lack of basic knowledge regarding the concept
of budget management, as well as confidence in implementing practical management among
students This problem is obviously not confined to ISB students, in the article "Students in the
storm of increasing prices" in 2007, journalist Van M. quoted a variety of interviews with
students from many different areas of Hanoi, illustrating the many difficulties coming along
with a limited income. Certainly there are also a handful of students with a more positive
response, saying that their budget is "considerably sufficient", but even these rare optimists
admit that they have no spare money to save for any future purpose..
It is, consequently, safe to assume that a tight budget is the general characteristic of any student.
This indicates a lack of basic knowledge regarding the notion of budget managing, as well as
the confidence in carrying out the spending management among students.

5. Recommendation

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The spending habits of the first-year students in the ISB of banking academy

Based on the above discussion of the findings, the following suggestions are made for the lack
of basic knowledge related to the management concept of student spending. First, the university
should consider organizing a training workshop on issues that are very important and important
to students such as spending management. This training workshop can be organized in different
ways on different occasions, such as on orientation day for the first-year students, in regular
workshops for first-year students. Speakers for the workshop can be experts or representatives
from the Student Association. Follow-up activities are needed to give students the opportunity
to improve their money management skills. On the students’ side, it is best that they should
start paying serious attention to improve their knowledge of financial management and
acquiring the necessary skills in the fields, both will soon attain importance when they enter
adulthood later.
6. Conclusion
In conclusion, we fully hope that the results of our study are able to promote similar interests
concerning the matter of personal finance in general and students' spending habits in the first
academic year in particular, and that our research could serve as a as we prototype of future
projects. These subjects, have found out from the limitations of our own research, are extremely
worthy of further and we deeper investigations. While exploring the study for spending habits
of first students, we recognize that there would also be different aspects relating to this topic
such as the diferences in students' age groups or genders. Also, broadening the scope of the
survey would most the majors they are hope likely bring up new and unconventional results
awaiting reasoning and explanation. It is our hope that in the future, there would be many more
studies, in order to thoroughly examine all the respectives of this issue.
(1998 words)

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The spending habits of the first-year students in the ISB of banking academy

References
(APA style for students in City7 # Havard Referencing Style)

Cummins, M., Haskell, J., & Jenkins, S. (2009). Financial attitudes and spending habits of
university freshmen - ProQuest. Retrieved from
https://search.proquest.com/openview/1ec611312d8f2313cfbd6598a03c8b53/1?pq-
origsite=gscholar&cbl=38746

Furnham, A. (1999). The saving and spending habits of young people. Journal Of Economic
Psychology, 20(6), 677-697. doi: 10.1016/s0167-4870(99)00030-6

Hayhoe, C., Leach, L., Turner, P., Bruin, M., & Lawrence, F. (2000). Differences in Spending
Habits and Credit Use of College Students. Journal Of Consumer Affairs, 34(1), 113-133. doi:
10.1111/j.1745-6606.2000.tb00087.x

Do, D. (2007). Combining economic growth with social justice to generate motivation for
poverty in Vietnam. Retrieved 19 July 2019, from
http://www.tapchicongsan.org.vn/details_e.asp?Object=29152878&news_ID=18835022

Van, M. (2007). Students in the storm of increasing prices. Retrieved 19 July 2019, from
http://www.muctim.com.vn/Vietnam/The-gioi-tuoi-moi-lon/Phongsu-Tulieu/2007/11-
30/16084/

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The spending habits of the first-year students in the ISB of banking academy

APPENDICES

QUESTIONNAIRE

I am Che Thi Cam Tu, ITP student, Banking Academy. I am doing a research project on ITP
students’ spending habits. This questionnaire is designed to help me acquire information for
my research project. I appreciate your opinions and responses which are essential to the
completion and the quality of my project. Please return the completed questionnaire by June
20th 2019. Thank you for your cooperation.
1. What do you usually money on?
o Basic needs (food, clothing, footwear products, etc. )
o Rent with bills (electricity, water, the Internet, telephone, etc.)
o Entertainment ( shopping, going to the cinema, extra curricular activities, etc.)
o Study ( text books, reference books, other learning materials, etc.)
o Travelling (bus ticket, petrol for your motorbike, etc.)
o Others (please specify:............................)
2. What are your sources of income?
o Pocket money from parents
o Part-time jobs
o Full-time holiday job
3. How much do you receive per month in the case?
o Less than 1 million VND
o 1-3 million VND
o 3-5 million VND
o More than 5 millionVND
4. How much do you spend in an average month?
o Less than 1 million VND
o 1-3 million VND
o 3-5 million VND
o More than 5 millionVND
5. Which of the following facters affect your spending habits?
o Family economic circumstances
o Awareness of spending
o Passion for shopping
o Others ( Please specify:.................................................)

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The spending habits of the first-year students in the ISB of banking academy

6. Do you have a plan for your budget each month?

o Yes, I always plan my budget
o Sometimes. When? Please specify: ...................................
o No, I spend the money when I need