BUDGETING AND SPENDING BEHAVIORS OF ACCOUNTANCY, BUSINESS AND

MANAGEMENT STUDENTS

LYAN JANE AGSAULLO

JONNALYN BUSALAN
JOCELYN BUSALAN
RUSHELL COLLADO

TUBAO NATIONAL HIGH SCHOOL

TUBAO, LA UNION

ACCOUNTANCY, BUSINESS AND MANAGE

APRIL, 2021
 CHAPTER I
INTRODUCTION

Background of the Study

Student budgeting primarily refers to management of financial expenses within
their assigned budget. Majority among student experience financial independence
without the supervision of their parents during high school year. On that span of time,
ABM students deals on a unique situation, because of limited incomes and high
expenses. According to the ABM students, many of them are unused to managing their
money. One of the biggest money challenges that they usually encounter is staying in
top of what they are spending, which means that they face difficulty in controlling the
way they spend.
Money is the most common and universal medium of exchange to obtain the
goods and services a person needs. (Kenton, 2018). The factors age, personality traits,
and knowledge can serve as a basis on how ABM students manage their money. The
ability to manage expenses and savings is called budgeting. Budgeting is significant for
financial stability, ensuring oneself of being able to pay for everyday expenses. Students
learn how to save their allowance as they grow and meet different requirements in
school as well as things they want to buy for their own. With their young age and lack of
experience, it is hard for them to budget their allowance on their own (De Guzman et
al., 2012). Westwood College from the United States conducted are search; the said
research found out that most college students spend the at least 60% of their allowance
in transportation, books, and supplies while the remaining 40% is spent on optional
activities- entertainment, apparel and services, travel and vacation.

Several factors make the behavior of the students dynamic and different from
each other. These factor can be technical as well as psychological and controllable or
uncontrollable. The major challenge that students face is the difficulty to budget their
expenses and save a proportional amount every month for contingent events. Most of
the students get their monthly allowance from their parents and are answerable to
them for their expenditure. Higher family income can contribute majorly to good
academic performance of the students but lower family income should not be an excuse
for poor performance. With the technological revolution and advancement, students
have adapted their budgeting and spending habits accordingly. The advanced marketing
strategies of the firms have made the students spend extravagantly on wants and not
just needs. And the marketing tactics have influenced the adults too which has led the
young to follow their footsteps and spend free-handedly. There is a vast difference in
the spending behavior of students of our country as the system to free the younger
population at an early age is different from the others. The more knowledge students
have about their financial responsibility and statues the less likely they are to be in debt
(Norvilitis, et al.,2006). Developing the saving habits of students can be an effective tool
to encourage the younger lot to live in a financially sustainable way.
Students learning to manage their money is a significant process during their
maturing stage. The practical skill of budgeting has become essential among human
beings to maintain and improve one's place in society. One of the reasons why students
waste their money is because they do not have the correct priorities in mind. It is an
expense many college students choose not to forego. The ability of budgeting reflects
the spending and saving habits of a person. Where and on what they spend also says a
lot about the identity of an individual. In the US, it is noted that each year, students pay
about $5.5 billion on alcohol, mostly beer (Collegescholarships.org,2019).
The spending and saving habits of the Accountancy, Business and Management
students also mirror how financially literate he or she is. This research hypothesizes
their behaviors on how they manage their money.
Framework of the Study
Theoretical Framework
According to a study conducted by a bank and financial institution, young people
spend money on cellphones, Internet cafe video games, cigarettes, and alcohol. They
also spend money on entertainment, as well as clothing and accessories. (ABS-CBN
News, TJ Manotoc, 2010) Teenagers congregate and browse. When it comes to
spending money, teenagers are engaged consumer, as well as in the influence they
wield in their families and on societal trend.
Despite having risen up during a time of rapid change, they have a remarkable
sense of self-assurance in their judgment (Tempo, 2010). A large percentage of students
seem to want what is "in" right now, what people are doing and using. Most teenagers
will have one or two sources of income, such as a parent's allowance or a career. The
answer to this question isn't found in the family's income or social status; rather, it is
found in the parents' way of life and upbringing of their children.
Muhammad Albeerdy and Behrooz Gharleghi (2015) concluded in a study
conducted in Malaysia that the factors education, financial socialization agents, and
money attitude have a direct impact on financial literacy rates among Malaysian
students. Furthermore, according to their findings, education was the most influential
factor among the three.
Samantha Villanueva (2017) conducted a similar study titled An Analysis of the
Factors Affecting the Spending and Saving Habits of College Students, which included
variables such as class year, gender, and ethnicity in one model, the Permanent Income
Hypothesis, and Hyperbolic Budgeting. Discounting is used in a different model to look
at college students' spending and saving habits. Despite the fact that the previously
identified variables have largely affected financial conduct, little or no action has been
taken to investigate the position of the various theories.
Review of Related Literature and Studies

This chapter includes the ideas, finished thesis, generalization or conclusions,

methodologies, and others. Those that were included in this chapter helps in
familiarizing information that are relevant and similar to the present study.
According to Mohammad Ali Nasiri, Azizuddin Sultani, R Chandrashekhar on their
research “Saving Behavior of Afghan Students in Mangalore City, India”, many studies
have been done so far internationally to determine how the youths mainly, University
students manage their money. To the best of our knowledge, no one has yet studied
Afghan students' spending and saving behavior. Therefore, this study investigates the
saving and spending behavior of Afghan Students in Mangalore City, India. Three
different categories of students, undergraduate, postgraduate, and research scholar, are
taken into consideration. The study's main objective was to determine how the Afghan
students manage their income and expenditure while pursuing higher studies in India.
The study also aims to determine the reasons for savings and whether there is any
significant difference in the three categories of respondents' spending patterns. Primary
data was collected through a structured questionnaire and analyzed using various
statistical tools such as descriptive statistics and ANOVA. It was found that there exists a
significant difference in the spending pattern of the three groups of students. Besides, it
was also noticed that male and female respondents have slightly different reasons for
savings. The Afghan students were thrifty about spending money and had a relatively
higher propensity to save by reducing their expenses, and they had the habit of paying
fixed costs first. The study further revealed that the Afghan students have not been
saving regularly. The researchers conclude that there is a significant relationship
between the parents’ socioeconomic status and the students’ academic performance.
This paper compares student allowance with academic performance. It does not
consider the various commodities on which a student spends and just talks that with
higher allowance, the academic performance of a student improves.

There are many groups of students that spent their money differently especially
among gender. Its look on how students manage their education’s money that they get
whether from scholarship, loan or by parent. Females tended to spend more money on
clothes, while men spent more money on entertainment and eating out (Wang and
Xiao, 2009). According to Norvilitis et al.(2006), women are more likely to report having
a budget then men, but women more frequently accumulate higher amount credit card
debt and total debt (Micomonaco, 2003).
There have been many articles, studies, and researches about the said topic
among students all over the world, an example would be Atie Nadome’s research about
the “Spending Habits among Malaysian University Students .” In this study, Atie Nadome
(2014) explained that spending behavior has never been stable, especially among
university students because many of them are experiencing independence for the first
time. Although in the Philippines most children are likely to still live with their parents
during senior high school and college years, their needs have drastically increased
compared to before. As of today, laptops, cellphones, internet connection, and even
personal vehicles have become essentials to students in attending and finishing their
studies. Thus, the spending habits of students today are bound to be significantly
different from the spending habits of students in the past.
A study made by Dr. Saravanan and Devakinandini (2014) namely ‘A study on
Perception of College Students about Spending of Pocket Money With Reference To
Students Studying in Arts and Science Colleges in Coimbatore’ examines how the socio-
economic status can influence the expenditure of pocket money. Most of the young
people get attracted by the society, and they are spending their valuable money in the
wrong means. They should know the value of money and the right way of handling it.
According to Crystal Paine in her book “The Money Saving Mom’s Budget" (2012), young
adults should be taught on how to save and prioritize what is essential. The book shows
that people should learn how to say ‘no' when it is not crucial. To be able to save
efficiently, one must learn how to weigh what is essential versus what is irrelevant or
not needed.
Statement of the Problem
This study is aimed to know the behaviors of Accountancy, Business and
Management students of Tubao National High School in budgeting and spending money.
Specifically, this study will answer the following questions:
1. What are the profile of the respondents in terms of;
a. Age
b. Gender
c. Monthly Allowance
2.What is the overall financial knowledge among students, as well as in each of the
following areas?
a. Spending Habits
b. Saving Habits
3. What are the factors and practices that affect the respondents on budgeting and
spending money.
4. What are the recommendations this research can provide to create awareness to
the incoming ABM students based on their findings?

Definition of key terms

Spending. According to Oxford Dictionaries, spending is the money available to be spent
on pleasures or entertainment. D’Silva (2008) defined spending behavior as a conduct
influencing the manner in which student utilize their money to fulfill their needs and
needs with no utilization of control. He elaborated that the spending behavior of
students today is fairly not quite the same as before, he claimed that students are
getting more into consumer is consistently. Studies have shown different factors that
can affect the spending behavior of individuals (Levenson, 2014).  Spending habits are
the behavioral pattern in using up assets of a person. Operationally it refers to the
pattern of participants on how and where they spend their money. Itis also one of the
areas that can identify the budgeting and spending behaviors of the students.
Budgeting. According to CIMA (Chartered Institute of Management Accountants) UK, a
budget is “A plan quantified in monetary terms prepared and approved prior to a
defined period of time, usually showing planned income to be generated and,
expenditure to be incurred during the period and the capital to be employed to attain a
given objective.” Cecil Gillespie defines budget as “a plan of operations, integrated and
coordinated, comprising all phases of business activities and summarized to show the
financial results of carrying out the plan”. Keller & Ferrara defines Budget as “a budget is
a plan of action to achieve stated objectives based on predetermined series of related
assumptions. In conclusion, saving habits is a person’s repetitive behavior pattern on
how he or she handles finances that he or she may have disposables income at the end
of a given period. Operationally, it refers to the ability of the participants to save and
budget their money. It is also one of the areas that can identify the student’s budgeting
and spending behaviors
Behaviors. According to Marc H. Bornstein, human behavior is the potential and
expressed capacity for physical, mental, and social activity during the phases of human
life. Habits are behavior patterns acquired by frequent repetition (Merriam Webster,
2019).   A primary motivation of many investigators in the field has been to determine
how the culminating mental abilities of adulthood were reached during the preceding
phases. From a practical standpoint, these are what the research is looking at as a
whole.  

Importance of the study

Future researchers. They will know more about the topic and broaden their knowledge
in the said field. They will be able to craft better questions and engage better in other
participants. They will then become more confident in their answers and have better
outcomes. They can also help with the understanding of the factors affecting students'
budgeting and spending behaviors.
Students. Grade 12 Accountancy, Business and Management students allow to have
knowledge in budgeting and spending money. They will also be able to save money in
daily life in order to better handle their budgets. Additionally, this can increase their
understanding of how they handle money. This research also provides financial
information, which aids in learning.

Parents. They are a student's main source of financial help for school and personal
expenses. This research will give insight on the budgeting abilities of youth in a specific
age group. The study may also assist parents in determining where and how teenagers
spend the most money, as well as when they spend the most. In addition, the study
encourages early financial management education, which is likely to begin at home.
Teachers. The teachers are also beneficiaries in this study, because it can help them to
be aware in managing their money especially in spending and budgeting their
allowance. Also, it is preferable if teachers are aware of how school practices impact a
student's regular budgeting and expenses. Teachers can help their students not only
academically, but also financially, by assigning low-cost assignments.

Administrators. To the administrators, they can also use this study to have an idea on
how to become more knowledgeable when it comes to spending and budgeting their
own money. The school administration will also be able to change their curriculum and
provide money management courses based on the findings of the report. Of course, this
form of program will help a child become better prepared for the future, increasing the
chances of having successful graduates. The study will also stress the importance of
understanding one's saving and spending behaviors.

Scope and limitations of the study

This research gives focus on the budgeting and spending behaviors of Grade 12
Accountancy, Business and Management students and was conducted only at Tubao
National High School (TNHS) during the second semester of the school year 2020-2021.
The gathering of related studies to be cited and used as support for this research will be
taken from books, journals, magazines and in the form of websites in other words taken
online. The respondents of the study are only limited to Grade 12 students, especially
the ABM students. It will not include those from any school's elementary department,
junior high school students, or college department. The researchers have planned to
survey 20 students, ten (10) girls and ten (10) boys ranging from 16-19 years of age. This
research is stated to effectively study regarding of the budgeting and spending
behaviors of ABM students. The fact that the student researchers can't guarantee that
the participants answered the survey honestly, despite the fact that it was encouraged,
is a limitation of this study. Another major drawback of the study is that it was
conducted during a big crisis, and the researchers were unable to survey their senior
high school department due to quarantine.