STUDENT’S FINANCIAL KNOWLEDGE AND SELF CONTROL:

IN RELATION TO THEIR DEMOGRAPHIC PROFILE

School Year 2019-2020

A Thesis
Presented to
College of Business Administration and Entrepreneurship
Southern de Oro Philippines College

In partial Fulfillment of the requirement for degree

Bachelor os Science Business Administration
Major in Financial Management

By:
Eugene G. Quigao
Jean Mariz C. Muñez
Jeann Grace M. Estrada
Lady Ann B. Nepomuceno
Giza Joy D. Abejo
 Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter involve discussions of different views, literature and studies reviewed
related to students financial knowledge and self-control, their relation to saving behavior.

Related Literature and Studies in Local Setting

According to Republic Act No.10922 Section 4. Economic and Literacy of Students
and the Youth - to improve the economic and financial literacy of students and the youth,
all public and private elementary and secondary schools under the DepED, the state and
private colleges and universities under the CHED, the Technical Education and Skills
Development Authority (TESDA), and the NYC, in coordination the NEDA, are hereby
mandated to conduct consciousness-raising and knowledge-expanding activities on
economic and financial literacy including the setting up of literature comers, organizing
fora, trainings, and conducting basic economic and financial management classes.

The DepED is also encouraged to assess and revise the high school curriculum to
make it more age-appropriate, and ensures that economic and financial education becomes
an integral part of formal learning.

In the study of (Villafuerte, 2015), as a student should learn about personal finance
in elementary and highschool were the importance of savings, thrift values and how the
love of money is the root of all evil. That these are not enough and other financial habits
such as expenses tracking, wise spending and the concept of budget planning should also
be taught to children as early as possible.

The financial literacy level of the average Filipino remains alarmingly low (Lucas,

2018), a problem that begins with poor childhood education that persist until their adult
years, according to the country’s financial regulatory. The same study indicated that money
management habits formed in childhood stay into adulthood. Those who began savings as
children display better attitudes to saving, and tend to outperform their peers who did not
develop the habit early in the areas of choosing financial products ans services, monitoring
expenses and planning for retirement.
 Primarily the research is focused on the development and validation of the
Academic Self-efficacy scale for Filipino junior high school students (Dullas, 2018). Self
efficacy refers to

People’s beliefs in their capabilities to produce certain effects and to learn or perform
behaviors at designated levels .

Here in the Philippines, certain laws are enacted to ensure that the Filipino youth
are equipped with the right tools to smoothly navigate the financial aspect of life (Remo,
2019). Financial Institution such as banks have also taken on the challenge to promote
financial education in the country. Like BDO Foundation, the corporate responsibility arm of
BDO Unibank, creates financial literacy videos and education materials for school-age
children.

Finance experts have stressed the importance of educating the youth to boost financial
literacy in the country, given that a high 41 percent of millennials fail to save. The sector is
counted on to help contribute to the strengthening of the country’s economy in the coming
years. At the Financial Executives Institute of the Philippines (Finex) Future Business and Finance
Leaders Forum at the De La Salle University (DLSU) in Pasay City over the weekend, COL
Financial Group Inc. Chairman Edward K. Lee stressed the importance of investing early. He said
this will not only benefit the person but help in nation-building, as well (Cu, 2017).

The Philippines is one of the fastest-growing economies in the region today, (Go, 2017)
giving the people the chance to have more financial power than before. However, all these will
only go to waste if we do not understand how money works and what are the consequences of
having bad money habits. Now, everyone seems to talk about ‘financial literacy’ but not a lot
about ‘financial education’.

According to the study of (Rios, 2017), there are students today who have the best
gadgets but are not even up-to-date with their tuition payments. They would not miss an
opportunity for a ‘night out’, even if they know it means being absent in class the following day.
With some, a ‘good time’ sometimes would cost them their following meals. True, many of
today’s students are resourceful enough to find part-time jobs to fill their free time. The thing is,
the jobs and earnings of “working students” are often unable to improve their dire situation.
Once they have money hanging around their necks, they seem to feel uncomfortable from the
weight, and so they want to spend it away quickly.

The study is very essentials because it aims to solve problems on spending money. This
will help the Filipino individuals to spend their money wisely. Also, it will help and teach people
specially shopaholics the importance of money. Moreover, this study will make people save
money and spend it wisely. In addition, spending money when people earn it is enjoying. With
the help of controlling money, Filipinos should know how to control their spending habits, if not
then they would end up in a lot of trouble. To know how do Filipinos spend their money. To
understand why do Filipinos spend beyond their means. To help Filipinos handle money wisely.
To educate young adults to become a financially literate, (Lacuesta, 2014).

Making enough money to cover basic expenses counts a lot in allowing people to have
leftover cash at the end of each month. However, results of a new World Bank survey suggest
education may have a significant effect in household financial security, (Montecillo, 2015). The
World Bank this week said its recent baseline survey on financial inclusion in the Philippines showed
most Filipino families’ incomes were eaten up by basic necessities every month. As expected, this
represents a significant hurdle in the amount of savings Filipino families can set aside. About 55
percent of families said the money they were making every month barely covered expenses. Of the
families that report saving money, only half keep their cash in banks.

Young Filipinos are keep on saving money, says survey (Corrales, 2014). In accordance to
the survey, young Filipinos are also interested in the banking sector, a report on country’s Banking
Financial, Services and Insurance (BFS) industry showed. This was revealed after ThoughtBuzz, a
web page application that provides social monitoring, carried out a research and examined social
media chatter in its “Young Filipinos and Finance” report that revolved around the banking sector.
The report revealed that the discussion on social media channels and networks centered heavily on
banking topics (70%).

Related Literature and Studies in Foreign Setting

Financial knowledge

In the study (Sulong 2017), Financial literacy can be defined as an individual’s

capacity to choose suitable ways in managing personal finances. In addition, financial
understanding increase awareness that is reflected by financial performances. It was
asserted that financial literacy is in association with financial education which empowers
students toward successfully dealing with their personal finances. Financial education is the
ideal way on enriching students, financial knowledge (Sulong 2017).

On the findings of a study (Mahdzan and Tabiani, 2013), having 192 respondents
indicated that financial literacy directs personal savings. It was discovered that financial
literacy is vital and is a positive determinant to saving behavior. It was then supported by a
study (Padula, 2013) that financial literacy raised savings and revealed a positive outcome
on savings among the sample population of 50 years old and above individuals. On the
study (Beckmann, 2013) investigating the effects of financial literacy on household savings,
revealed that it has a positive effect to a person’s saving. Also, in a simple of 400 person
from Zimbabwe, found out that personal has a strong association to financial literacy
(Mutsonziwa, 2017).

Financial knowledge and financial behavior have a strong association with each
other (Hilgert et al, 2003). The results of the study revealed that individuals having higher
level of financial literacy, are person who associate themselves in investments, cash flow
manage, and other financial activities. The study on examining the relationship between
financial literacy and investment in low cost fund found out that a person having a high leve
of financial literacy are concerned on fund expenses and can choose low cost fund (Hasting
and Mitchell, 2009).

All over the history, people have regularly taken several many different financial
decisions about expenditures, savings and/or investments. In this perception, so that the
expenses are managed, and investments are determined in terms of profitability, people
need financial information and knowledge, partly provided by financial education
(Campbell, 2006; Lusardi & Mitchell, 2017).

In acknowledgment to the recognized need to progress financial literacy, an

extensive range of private business, non profit organizations and government agencies have
industrialized financial education materials and programs (Fox et al, 2005). Furthermore, a
study utilized Jumpstart test scores from 2000 through 2006 and conveyed that high school
seniors who acquired a full-semester high school course in personal finance had average
scores that were no higher than all seniors who took the test (Mandell, 2008). These
national test data, however, have limitations in their usefulness to assess the effectiveness
of financial education because od inadequate jurisdiction linked to course content, test
measurements, teacher preparation and amount of instructions. (Walsted et al, 2010).

Outcomes of a double obstacle analysis specified that students with comparatively

higher levels of financial knowledge were not meaningfully different from students with
comparatively lowers levels in terms of the possibility of having a credit card balance.
Opposing to outlooks, those with higher levels of financial knowledge had significantly
higher credit card balances (Robb & Sharpe, 2009).

Self-Control

Individuals save too little for retirement and spend to much (Sotiropoulos &
d’Astous, 2013). Due to this incapability of having bad financial choices, psychological
characteristics must be studied to explain how self-control influences positive financial
performances. As self-control refers to the capacity of future-selves to manipulate current
self, its failures lie through an individual’s procrastination and failure to resist temptations.

Poor self-control is usually to engage in compulsive purchases (Achtiziger et al,

2005). These results later then supported by a study (Gathergood, 2012) indicate that
individuals having self-control problems are prone to endure credits and unforeseen
expenses leading to over indebtedness.

Individuals having poor self-control are less likely to save for retirement (Choi et al,
2011). On a study (Miotto and Parente, 2015) investigating people’s demographics, self-
control and propensity for future that people who acquire higher self-control reflects a
sound finance. Individuals with better self-control are having less anxiety in association to
financial matters, tend to be more secure and confident (Stromback, 2017). Thus, the study
also indicated that self-control doest not solely affect an individual’s financial behavior but
also, optimism and deliberative thinking puts into place.
 Apart from self-control, optimism and deliberate thinking as non-cognitive factor,
greatly influence an individual. As a results indicate that optimistic individuals have good
financial behavior are less anxious regarding financial matters because they are most
confident in facing financial situations.

Saving Behavior

Financial wellness is a state where individuals enjoys satisfaction with their earnings
and savings. It also reflects individual’s awareness on opportunities, the capacity to make
ends meet and acquire sense of security, fairness in the distribution system (Joo, 1998).

According to the study (Parcia, 2017) on employees financial literacy, behavior,

stress and wellness, the data on the findings revealed that employees are good payers and
good spenders if enough salary is earned to support basic needs. This would indicate that
careful planning on budgets harnesses a person’s consciousness regarding financial matters.

Saving decisions are derived from the limitations imposed by poor financial
knowledge lack of information and wrong sources of financial advices (Lusardi, 2008). The
lack of literacy, information and procrastination prevents people from saving. The findings
on individuals savings and financial literacy shows that the inclination to demographics of
the population greatly influence people regarding different saving styles.

At an early age, individuals are open to numerous approaches of handling personal

finances, which can frequently lead to the progress of poor habits (Gutter, Garrison &
Copur, 2010). Several students end up having numerous costly money mistakes which
causes financial problems (Xiao et al, 2007). As young adults simple financial understanding
is important to students to be able to figure our good financial spending habits while having
good education in college (Wong, 2013).

The study revealed that the saving behavior of students is absolutely influenced by
the degree to which they deliberate the upcoming consequences of their existing activities
(Larson, 2013).

Financial Education
 Financial education is the procedure by which financial consumers/investors
progress their understanding of financial products and concepts and, through data,
mandate and/or objective assistance, improve the skills and confidence to become
further aware of financial risks and prospects, to make informed selections, to
distinguish where to go for help,and to yield other effective actions to improve their
financial well-being (OECD, 2005).

With the alarming rates of bankruptcy, consumer debt levels, poor savings
rates among only put financial education on its place among Americans. These
series of results originated form unfortunate family financial management and low
financial literacy levels (Fox et al, 2005). Those who study literacy usually revealed
that some, not in general consumers/students lack the financial literacy needed to
make significant financial judgments in their best interest (Perry 2008; Braunstein &
Welch, 2002).

Chapter 3

RESEARCH METHODOLOGY

This chapter presents the methodology of the study. It includes the

research design, research environment, research respondents, research
instrument, data gathering procedure, categorization of variable, and statistical
treatment of the study.

Research Design
 This study is used to obtain information about the present situation to
gain understanding of a certain phenomena (Cristobal et.al, 2017). The research
utilize the research design to determine the relationship among the different
variables indicated in the study. Moreover, the researchers used the adopted
research design to describe and to prove the relationship between the
independent and dependent variable in this study. The researchers investigated
the two factors on to savings namely the financial literacy and the self-control and
its relation to students saving behavior.

Research Environment

This study will be conducted at Southern Philippines College (SPC) which

is located at Julio Pacana St., Licuan, Cagayan de Oro City within the second
semester of the Academic Year 2019-2020. Southern Philippines College is a
private domestic corporation , non-sectarian and co-educational institution in
Northern Mindanao.

Southern Philippines College offers Senior High School Tracks specifically

academic tracks such as Accounting Business and Management (ABM),
Science, Technology, Engineering,and Mathematics (STEM), Humanities and
Social Science (HUMSS) and General Academics (GA’s) which are aligned to
the K-12 Curriculum. The researchers have chosen the school due to the
proximity of location and the cost effectiveness in conducting the study.
 Legend

Southern
Philippines
College

Julio
Pacana St.
Lucuan of
Cagayan de
Oro City

Figure 2. Location
Map
Research Respondents

The respondents of this study are the fifty (50) Senior High School students
composed of 25 respondents from grade 11 and other 25 students coming from
grade 12 of Southern Philippines College, Julio Pacana St., Licuan, Cagayan de
Oro City, which was chosen purposively, considering, the convenient
accessibility and proximity to the researchers. The respondents are part of

Research Sampling Procedure

The researchers adopt convenience sampling method to obtain data.

Non-probability sampling technique is employed in the research as it ensures
good estimates of the population characteristics (Malhotra, 2010). This is the
easiest non-probability sampling technique as the sample is selected randomly
until the required sample size has been met (Saunders et al., 2009). Therefore,
the questionnaires will be distributed to the school students haphazardly to the
amount of the sample size.

Research Instrument

The research instrument is adopted from the research of main instrument

that was used in this study was modified survey questionnaire form related study
entitled, “Determinants to Saving Among the University Students in Malaysia”
(Thung et al, 2017). The first part of the survey questionnaire was comprised of
different statements on the respondents‘ financial knowledge and self-control.
The last part of survey questionnaire was focused on the respondent’s saving
behavior. On the random survey, each respondents has answered the questions
and the researchers recorded the answers in order to expedite the present
purpose of the survey in a proper manner.

Data Gathering Procedure

The researchers asked verbal permission to the office of the Principal of the
Senior Highs School Department, Southern Philippines College for an approval in
conducting the distribution of the survey questionnaires during break time. Upon
introducing the study, the researchers oriented the respondents on the purpose
of the study. It is purposeful way to be able to have an accurate and reliable
responses. The respondents’ queries were entertained. All questionnaires were
immediately gathered after the respondents have answered all the necessary
information to gain a higher response rate. The data gathered were allied tallied
and interpret for future understanding.

Categorization of variables/Scoring Guidelines

A. Independent Variables

Table 1. Financial Knowledge

Description Mean Scale / Range Score

Strongly Agree 3.25-4.00 4
Agree 2.50-3.25 3
Disagree 1.75-2.49 2
Strongly Disagree 1.00-1.74 1

Table 2. Self-Control

Description Mean Scale / Range Score

Strongly Agree 4
Agree 3
Disagree 2
Strongly Disagree 1
B. Dependent Variables (Saving Behavior)
Description Mean Scale / Range Score
Strongly Agree 4
Agree 3
Disagree 2
Strongly Disagree 1

Statistical Treatment of Data

In analyzing the data, the researchers utilized the following statistical tool.

1. In determining the extent of influences on students saving behavior in terms of

financial knowledge and self-control, frequency, percentage, standard deviation and
weighted mean was used.

2. In determining the students, saving behavior frequency, percentage, standard

deviation and mean was used.

3. In analyzing the relationship between the students’ financial knowledge, self-control

and saving behavior, Person Product Moment Correlation will be utilized.
 REFERENECES

Maholtra, N.K (2010). Marketing research; an applied orientation (6th ed.). United States
of

America: Pearson Education, Inc.

Saunders, M., Lewis, P. & Thornhill, A.(2009). Research methods for Business students
(4th ed.).

Harlow, England: Prentice Hall.

Definition of Terms

The following terminologies are used in the study. In order to provide understanding, the
definition below is operationally defined:

Attitude. It refers to the driving force of a person and result of the derived perception.

Behavioral Intention. Indicates as motivational factor influencing the actions of a

person.

Behavior. This terms refers to the controlled factor by a person’s perception providing
series of actions which cause behavior.

Demographic Profile. It signifies how the respondents were grouped in accordance to

their differences in terms of gender and strand. This is also one of the independent
variable in the study.
Fatalistic Attitude. It denotes to the attitude of Filipinos having huge trust to destiny
which is evident in their saving behavior.

Generic Saving. It pertains to the type of saving habits teens have which are traditional
and derived from the classical norms in saving.

Perceived Behavior Control. It signifies to the ease or difficulty to perform the action.

Social Norms. It refers to custumary codes, which could be an informal belief among
students on the idea of saving which hugely affect their saving behavior.

Stimuli. It pertains to the responses of the person to the factors or phenomena happening
within his environment.

Subjective Norms. It signifies to a person’s favorable beliefs about a certain group or

certain behavior.

Theory. It indicates to the basis of the study which the researchers used to prove or
disprove a certain idea.