UNIVERSITY OF SANTO TOMAS

COLLEGE OF COMMERCE AND BUSINESS

ADMINISTRATION

FINANCIAL MANAGEMENT BEHAVIOR AND FINANCIAL WELL – BEING OF

THE GOVERNMENT – OWNED AND CONTROLLED

CORPORATION (GOCCs) EMPLOYEES Why not the “Impact of Financial

Behavior on the Financial Well-Being of Government owned and controlled

corporation(GOCCs) Employees”

Results to be presented:

1. Descriptive analysis

2. Correlation Analysis

3. Simple regression analysis

 Submitted by

Sabile, Jerome Mathew L.

Submitted to

Asst. Prof. Imelda T. Angeles, PhD

ABSTRACT

Key variables: Financial Behavior, Financial Well-being, Demographic,

and Socioeconomic
 Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Finance aspect is one of the most significant things in a family in order to develop their

life every day. However, the heads of family, like husband and wife who are working should be

able to manage the stability and development of family’s financial with a purpose to acquire

financial satisfaction for their family.

Financial difficulties in a family also could be caused by lack of financial knowledge and

communication, unemployment, and the usual error made by most individuals, poor budgeting

where could lead to loss revenue, luxurious expenses, unwise choices, and big lust in spending

money. At the end, a right financial planning must be practical in order to achieve family’s goals

and avoid difficulties mentioned before, which influenced by enough information about finance

(financial literacy) (Citibank Indonesia, 2014).

Financial management behavior is the achievement, distribution, and use of financial

resources oriented toward some goal. Empirical evidence supports that, if families achieve

effective financial management, both their economic well-being and their financial satisfaction

improve at the long term (Consumer Financial Protection Bureau, 2015). However, financial

management behavior is complex and difficult to implement. The supervision of money and

expenditure, which includes frugal and careful spending of money, is a useful protection against

risky financial practices.

 Moreover, financial management behavior may vary between younger and older people.

Although the repeated experience and practice of financial activities influence people’s skills to

manage their finances, empirical evidence seems to support that young people practice fewer

basic financial tasks, such as budgeting or regularly planning their long-term savings (Jorgensen

and Savla, 2010). Because of this evidence, it is of interest to analyze the antecedents of young

adults-(change to employees) financial management behavior.

Positive financial behavior such as small personal loan, compliance with budget,

decreasing life expenditures, financial planning, investment in pension fund and improving

financial saving capable of reducing the financial stress and directly affecting the financial well-

being (Sorhaindo & Garman, 2002).

Efforts in improving the financial well-being of an individual, family and society should

give greater emphasis to aspects of financial behavior. Financial behavior refers to one’s practice

of using a systematic financial management system, for example a consistent savings plan

through well thought and written plan with specific aims (Titus et al., 1989). Good financial

behavior is described by having effective behavior such as preparing financial record,

documentation on the cash flow, planning expenses, paying utility bills, controlling the usage of

credit card as well as a savings plan (Gorham et al., 1998). Prior research did describe how

financial well-being of an individual are influenced by his or her financial behavior (Godwin

et.al 1986).

Financial well-being is an essential concern for individuals, societies as well as for

countries. Generally, security involves the broad aspect of overall living quality which consist of

the level of salary, job security, housing facilities, quality of living standard, healthcare access,

education facilities, environment and social bonding, etc. (Hicks S, Tinkler L, Allin P.,2013)
 Considerate the financial security of lower-income group is a critical concern of any

government as this group struggles most to meet up with their necessities. Despite the

significance, little is known about financial well-being of low-income group.

Most commonly, financial well-being implies the financial circumstance as well as

enough money to meet one’s needs with security and freedom of choice. Various educational

disciplines have been studied in financial well-being including economics, financial advising and

organizations, developmental psychology, consumer decision-making and services marketing.

Several researchers define financial well-being with different standpoints. For instance,

according to Brüggen et al.(2017), financial well-being is the perception of being able to

preserve present and expected aspiration for living standards and financial freedom. Financial

well-being refers to an objective and subjective concept, where it contributes to an individual’s

evolution of his/her current financial condition (Vosloo W, Fouche J, Barnard J, 2014).

Similarly, financial well-being can meet for needs and liability of recent and anticipated lifestyle

(Kempson E, Finney A, Poppe C.,2017). Muir et al. (2017) ascertained that the strongest

influencers of financial well-being are financial capability, financial inclusion, social capital,

income, and (mental) health.

B. Identification of the Problems

This research aims to examine the relationship between financial management behavior

and financial well – being of the Government – Owned and Controlled Corporation (GOCCs)

employees. Measuring many different domains of financial management behaviors and well-

beings are important because each domain can have a serious impact on family life that may

affect the services given by the government employees to their clients.

C. Limitation of the Problem

This study focuses on the financial management behavior and financial well – being of

the Government – Owned and Controlled Corporation (GOCCs) employees. The data collected

will be conducted to all the permanent employees of Social Security System (SSS) East Avenue

Quezon CIty Branch, Pag – Ibig Fund Intramuros Manila Branch and Philhealth NCR North

Caloocan Branch. The study will not cover problems that are not consider as one of the financial

behaviors and financial well – being. The other employees which do not fall as part of GOCCs’

permanent employees are not within the scope of this research. The study will be done through

the utilization of questionnaire to the respondents as a survey and reference. By strategy, the

researcher will be able to know the financial behavior and financial well – being of the

Government – Owned and Controlled Corporation (GOCCs).

D. Formulation of the Problem/Research Questions

This study generally determines the financial management behavior and financial well –

being of the Government – Owned and Controlled Corporation (GOCCs) employees.

More specifically, this study seeks to answer the following questions:

1. What is the profile of the student-respondents in terms of the following:

1.1. Sex;

1.2. Age;

1.3. Marital Status;

1.4. Years in service;

1.5. Highest educational attainment;

1.6. Agency;
 1.7. Gross Monthly Income; and

1.8. Net Monthly Income

2. What is the financial management behavior and financial well – being of the

respondents?

3. What is the level of financial planning as perceived by the respondents?

3. Is there a significant relationship between the financial management behavior and

financial well – being of the respondents?

4. Is there a significant difference on the financial management behavior and financial well

– being of the respondents when grouped according to profile?

E. Objective of the Study/Research Hypotheses

This study is anchor to identify the relationship between financial management behavior,

financial well-being and financial planning among Government – Owned and Controlled

Corporation (GOCCs) specifically the Social Security System (SSS) employees, Pag-Ibig Fund

employees and Philhealth employees.

F. Significance of the Study

The findings of this study will carry the following significance and benefits to various

sectors as follows:

Government. This study will be beneficial to the government since the results will show the

financial management behavior and financial well-being status of the GOCCs which will be an

eye opener to those who are in the position in conducting different programs about financial

management that may address the needs of GOCCs employees in handling their finances.

Government - Owned and Controlled Corporation Employees. The results of this research will

significantly benefit the GOCCs employees in determining their financial management behavior
and financial well – being state. In this manner, they will be able to do interventions to properly

handle their monthly finances.

Researcher. The results of this study will provide useful data on the evaluation of the financial

management behavior and financial well – being of the GOCCs employees which will help the

researcher in recommending appropriate trainings and workshop about financial management.

Future Researchers. To the scholars, it is of great use to conduct academic research. It acts as a

source of empirical literature and acts as a ground in conducting further studies in financial

management behavior and financial well – being.

 Chapter 2

LITERATURE REVIEW

2.1 Introduction

This section reviews the available literature on financial management behavior and

financial well - being, and the studies done related to financial management behavior and

financial well - being of the GOCCs employees, the conceptual framework and ends with a

summary of the reviewed literature.

2.2 Theoretical Review

Behavioral Lifecycle Theory

The behavioral lifecycle theory is mental accounting(citation). According to the theory of

mental accounting, people keep track of their money and expenses in their mind. They allocate

money to different categories and use them to cover expenses accordingly. According to Shefrin

and Thaler (1988), there are three main ways to categorize wealth: current income, current assets

and future income. People are keener to spend money from the first category and less interested

in using the money from the last category. It is more tempting for people to spend income than

assets such as savings. It is also possible for people to create more categories—for example, rent,

food, utilities, entertainment, etc. One key feature of mental accounting is that it makes these

wealth categories non-fungible. Hence, one cannot cover the expenses in the category for

entertainment with the money allocated to other categories.

Behavioral life-cycle(BLC) theory was created to describe irrational (or bounded

rational) behavior. BLC is extended from the life cycle theory (LC) of saving by Modigliani and

Brumberg (1954/2005), but unlike LC theories, the BLC theory highlights self-control, mental

accounting and framing. When the LC theory assumes that people are rational, the BLC assumes
that people have dual-self conflict and that this lack of self-control can cause irrational behavior.

When the

LC theory assumes that people are consistent with their decisions, the BLC theory assumes that

people are not because of the framing effect. When the LC theory assumes that all money is

fungible, the BLC theory claims that because of mental accounting, all money is not fungible. In

this way, the BLC theory manages to explain why a lack of self-control can lead to bad

decisions. Hence, the BLC theory offers a theory to explain how and why self-control also

affects financial behavior, and therefore, it is used in this thesis. Furthermore, the BLC theory is

supported by empirical evidence (Graham & Isaac, 2002; Strömbäck et al., 2017).

2.3. Review of the Related Studies

Series of study have been conducted to determine the financial behavior and well – being

of an individual. The study of Setiyani, R. and Solichatun, I. (2019) showed that financial

literacy, financial socialization, financial attitude, financial confidence, and financial behavior

have positive effect on financial well-being. Financial literacy, financial socialization, financial

attitude, and financial confidence also have a positive effect on financial behavior. Then,

financial literacy, financial socialization, financial attitude, and financial confidence have a

positive effect on the financial well-being through financial behavior.

In addition, the study of Godwin & Carrol, 1986; Scannel, 1990; Porter & Garman, 1993;

Godwin, 1994; DeVaney, Gorham, Benchman et al., 1996; Parrotta & Johnson, 1998; Joo &

Garman, 1998; Hira & Mugenda, 1999; Kim et al., 2003; Joo & Grable, 2004; Kim & Garman,

2004 have shown financial behavior as positively correlated with financial well-being. This is

strengthened by the study conducted by Xiao & Shim (2009) that observed the correlation

relationship between financial behaviors which varied with the level of satisfaction in life.
 On the other hand, Mazzarol, et al. (2015) conducted a study on the financial

management practices of companies in Australia and Singapore regions. The study surveyed 145

companies with data being collected through primary means. The study established that

companies have both formal and informal financial management practices which largely

differed. The organization that had well organized financial management practices had improved

financial performance. However, the study was not able to determine the exact financial

management practices that existed or the relationship between the research variables.

The result of the previous studies will help the present study in identifying the financial

management behavior and financial well – being of the Government Owned and Controlled

Corporations to better understand the current situations of the respondents and to suggest

interventions and innovations to address the gaps that will be identified.

2.4 Conceptual Framework

Independent Variables

Sex; Dependent Variables

Age;

Marital Status;

FINANCIAL BEHAVIOR
Years in service; FINANCIAL WELL -BEING

Highest educational attainment;

Agency;

Gross Monthly Income; and

Net Monthly Income

Figure 1.0 Research Paradigm(Hindi sya tugma sa research objective mo)

The illustration shown above depicts the paradigm flow of the research. It has two (2)

boxes identified as the independent variable and the dependent variable.

The Independent variable deals with the determination of the profile of the respondents in

terms of their sex, age, marital status, years in service, highest educational attainment, agency,

gross monthly income and net monthly income. It was also included in the independent variable

box the financial management behavior and financial well - being. The framework also presents

the significant relationship and difference in the given variables.-Show this in your framework-

show the direction of your objective.

2.5 Hypothesis
The research is guided to answer the following null hypotheses:

H01: There is no significant relationship between the financial management behavior and

financial well – being of the respondents.

H02: There is no significant difference on the financial management behavior and

financial well – being of the respondents when grouped according to profile.

 Chapter 3

RESEARCH METHODOLOGY

This chapter outlines various methods which will be applied in the conduct of this

research. It includes type of research, place and time, research design, population, sample and

sampling technique, research variable and instruments, validity and reliability of the instruments,

data collection procedures, data analysis and ethical considerations.

A. Approach and Type of the Research

Research Design

The main purpose of this study is to assess the financial management behavior and

financial well – being among chosen permanent employees of Government Owned and

Controlled Corporations (GOCCs). This implies the utilization of descriptive research approach.

This approach attempts to identify the characteristics of a problem through description.

Because the financial management behavior and well - being cannot be described in all its detail,

careful selection of facts must occur. Facts should be gathered according to pre-determined

criteria and for the purpose of demonstrating relationships of interest. To the extent that the

descriptive study of a particular problem provides one with a generalized understanding of a

phenomenon that, in turn, can be employed to understand other specific problems, this

approach is useful and acceptable. 

B. Place and Time of the Research

This study will be conducted at Social Security System (SSS) East Avenue Quezon City

Branch, Pag – Ibig Fund Intramuros Manila Branch and Philhealth NCR North Caloocan Branch

for the 4th quarter of fiscal year 2022. These places were selected since it they are GOCCs.

C. Population, Sample, and Sampling Technique

 This study will cover all the permanent employees of Government Owned and Controlled

Corporation (GOCCs) specifically Social Security System (SSS) East Avenue Quezon City

Branch, Pag – Ibig Fund Intramuros Manila Branch and Philhealth NCR North Caloocan Branch

as its population. The sampling technique to be utilized is stratified random sampling to the

permanent employees of SSS, Pag-Ibig Fund and Philhealth. According to Hayes, A. (2022),

Stratified sampling is a common sampling technique used by researchers when trying to draw

conclusions from different sub-groups or strata.

The table below shows the sample size of the respondents per strata. This presents the

data to be used in the conduct of this study.

Table 1. Sample Taken from the GOCCs employees Population

Government Owned and Controlled Number of Employees

Corporation (n)
Social Security System (SSS) 50
Pag – Ibig Fund 50
Philhealth 50
Total 150

Research Variable and Instruments

Validity and Reliability of the Instruments

The instrument that will be used in this study is adapted in the study of Camilla

Strömbäck, Kenny Skagerlundb, Daniel Västfjällb,d, Gustav Tinghöga entitled “Subjective self‐

control but not objective measures of executive functions predicts financial behavior and well‐

being”. The instrument is divided into 3 parts. Part I includes the demographic profile of the

respondents (Sex, Age, Marital Status, Years in service, Highest educational attainment, Agency,

Gross Monthly Income and Net Monthly Income). Part II contains the 9 item questions about
financial management behavior of the respondents. This part will be scored using 5-point Likert

scale (5 – Always, 4 – Often, 3 – Sometimes, 2 – Rarely, 1 - Not at all). The last part is sub-

divided into two parts. The first part covers the 4 – item questions on financial anxiety and the

last part consists of 3-item questions on financial security of the respondents. This will be scored

using a 5-point Likert scale (5 – Strongly Agree, 4 – Agree, 3 – Neither, 2 – Disagree, 1-

Strongly Disagree).

Data Collection Procedures

After securing the needed permission from the office of the different Government Owned

and Controlled Corporation (GOCCs) to float the questionnaires and gather pertinent data, the

researcher will send communications to the permanent employees of the identified GOCCs,

informing them of the study along with the survey link. To fast track, the gathering of data, the

researcher posted the survey link thru crowdsourcing in social media sites like Messenger via

group chats. Google form automatically summarizes the data in spreadsheet and the researcher

organized the data by properly coding them before statistical analysis.

Data Analysis
This research study will be utilizing the following descriptive data analysis tools:

frequency counts, mean, and percentage in knowing participants’ profile variables. Additionally,

frequency count and percentage were used in tabulating the data that were gathered. The study

will also use the weighted mean and the overall mean. These were inputted in the Statistical

Package for the Social Sciences (SPSS) software for further statistical analysis and treatment. In

a more detailed form, the said tools were described as follows:

Frequency and Percentage Distribution. These tools were utilized in presenting the profile of the

respondents.
Overall Mean. This statistical tool was used to determine the interpretation answers of research

questions situated in the research study.

Pearson Product Moment Correlation Coefficient. This is used to identify the significant

relationship between the respondents’ financial management behavior and their financial well –

being.

Analysis of Variance (ANOVA). This tool is used to determine the significant difference between

the financial management behavior and their financial well – being and the respondents’ profile.

Scoring of the Questionnaires

The data that were retrieved from the assessment-type questionnaire were converted into

numerical weight using the 5-likert point scale. The researcher classified them into different

quantities that enabled her to categorize the data.

To assess the financial management behavior among the different identified GOCCs, the

researcher used the following table for interpretation:

Table 2. 5 Likert Scale to Assess the Financial Management Behavior of the respondents-
(gawin mong 4 or 6 choices para walang safe answer)
Point Scale Qualitative Description
4 3.51 – 4.50 Always
3 2.51 – 3.50 Often
2 1.51 – 2.50 Rarely
1 1.0 – 1.50 Not at all

For the financial well - being by the respondents in financial anxiety and financial

security of the respondents, the research will use the following table for interpretation:

Table 3. 5 Likert Scale to Assess the Financial Well – Being of the respondents
Point Scale Qualitative Description
4 3.51 – 4.50 Strongly Agree
3 2.51 – 3.50 Agree
 2 1.51 – 2.50 Disagree
1 1.0 – 1.50 Strongly Disagree

Ethical Considerations

This research is an original study and will be conducted as a basis in recommending for an

appropriate and effective intervention on proper financial handling of hard-earned money. Authors of

books, journals, publications, as well as websites from the internet which were used as references in the

conduct of this study are properly acknowledged and cited. Head of Offices’ consent will be secured

before the conduct of this study. Further, confidentiality of the data/documents generated from the

respondents’ is highly ensured. All the data to be collected will solely be used for the purpose of this

study.
References:

Brüggen EC, Hogreve J, Holmlund M, Kabadayi S, Löfgren M (2017). Financial well-being: a

conceptualization and research agenda. J Bus Res 79:228–

237. https://doi.org/10.1016/j.jbusres.2017.03.013

Citibank Indonesia (2014). Citi Indonesia launches ‘Managing Your Wealth’.

Consumer Financial Protection Bureau. (2015). Financial Well-Being: The Goal Of Financial

Education. Available on:

consumerfinance.gov/data-research/research-reports/financial-well-being.

DeVaney, S. A., Gorham, E. E., Bechman, J. C., & Haldeman, V. A. (1996). Cash-flow

management and credit use: effect of a financial information program. Financial

Counseling and Planning, 7, 81-86.

Godwin, D. D. (1994). Antecedents and consequences of newlywed’s cash flow management.

Financial Counseling and Planning, 5, 161-190.

Godwin, D. D., & Carroll, D. D. (1986). Financial management attitudes and behavior of

husbands and wives. Journal of Consumer Studies and Home Economics, 10, 77-

96. http://dx.doi.org/10.1111/j.1470-6431.1986.tb00110.x

Gorham, E. E., DeVaney, S. A., & Bechman, J. C. (1998). Adoption of financial management

practices: a program assessment. Journal of Extension. Retrieved May 25, 2006,

from http://www.joe.org/joe/1998april/a5.html
Graham, F., & Isaac, A. G. (2002). The behavioral life-cycle theory of consumer behavior:

Survey evidence. Journal of Economic Behavior & Organization, 48(4), 391–401.

https://doi.org/10.1016/S0167-2681(01)00242-6

Hicks S, Tinkler L, Allin P (2013) Measuring subjective well-being and its potential role in

policy: perspectives from the UK Office for National Statistics. Soc Indic Res

114(1):73–86. https://doi.org/10.1007/s11205-013-0384-x

Hira, T. K., & Mugenda, O. M. (1999). The relationships between self-worth and financial

belief, behavior, and satisfaction. Journal of Family and Consumer Sciences,

91(4), 76-82.

Joo, S., & Garman, E. T. (1998). Personal financial wellness may be the missing factor in

understanding and reducing worker absenteeism. Personal Finance and Worker

Productivity, 2(2), 172-182.

Joo, S., & Grable, J. E. (2004). An exploratory framework of the determinants of financial

satisfaction. Journal of Family and Issues, 25(1), 25-50.

http://dx.doi.org/10.1023/B:JEEI.0000016722.37994.9f

Jorgensen, B. L., and Savla, J. (2010). Financial literacy of young adults: the importance of

parental socialization. Fam. Relat. 59, 465–478. doi: 10.1111/j.1741-

3729.2010.00616.x

Kempson E, Finney A, Poppe C (2017) Financial well-being: a conceptual model and

preliminary analysis (Final edition). Consumption Research Norway – SIFO

Kim, J., & Garman, E. T. (2004). Financial stress, pay satisfaction and workplace performance.

Financial Education, 69-76.

Kim, J., Garman, E. T., & Sorhaindo, B. (2003). Relationships among credit counseling clients’

financial well-being, financial behaviors, Financial Stressor Events, and Health.

Financial Counseling and Planning Education, 14(2), 75-87.

Mazzarol, T. et.al.,(2015). The financial management practices of small to medium enterprises.

Small Enterprise Association of Australia and New Zealand. Retrieved from

https://cemi.com.au/sites/all/publications/SEAANZ-2015-Mazzarol-Reboud-

Clark.pdf

Modigliani, F., & Brumberg, R. (2005). Utility analysis and the consumption function: An

interpretation of cross-section data. In: F. Franco (Ed.). The collected papers of

Franco Modigliani (vol 6). Massachusetts: Massachusetts Institute of Technology

(Reprint of Modigliani, F., & Brumberg, R. (1954). Utility analysis and the

consumption function: An interpretation of crosssection data. In: Kurihara, K. K.

(Ed.), Post Keynesian economics. New Jersey: Trustees of Rutgers College).

Muir K, Hamilton M, Noone J, Marjolin A, Salignac F, Saunders P (2017) Exploring financial

wellbeing in the Australian context. University of New South Wales, Sydney,

Centre for Social Impact & Social Policy Research Centre

Parrotta, J. L., & Johnson, P. J. (1998). The impact of financial attitudes and knowledge on

financial management and satisfaction of recently married individuals. Financial

Counseling and Planning, 9(2), 59-74.

Porter, N. M., & Garman, E. T. (1993). Testing a conceptual model of financial well-being.

Financial Counseling and Planning, 4, 135-165.

Setiyani, R. and Solichatun, I. (2019). Financial Well-being of College Students: An Empirical

Study on Mediation Effect of Financial Behavior. Creative Commons Attribution

License. 10.18502/kss.v3i11.4026

Sorhaindo, B., & Garman, E. T. (2002). Profina Debt Solutionssm 18-Month Panel Study:

Changes in Financial Behavior and Incidence of Financial Stressor. Interim

Report. Retrieved December 22, 2004, from

http://www.education.incharge.org/_assets/research_reports_and_publications/

76.pdf

Strömbäck, C., Skagerlund, K., Västfjäll, D., & Tinghög, G. (2020). Subjective self-control but

not objective measures of executive functions predicts financial behavior and

well-being. S2214-6350(19)30189-3. https://doi.org/10.1016/j.jbef.2020.100339

Thaler, R. H., & Shefrin, H. (1981). An economic theory of self-contol. Journal of Political

Economy, 89(2), 392-406. https://doi.org/10.1086/260971

Titus, P. M., Fanslow, A. M., & Hira, T. K. (1989). Networth and financial satisfaction as a

function of household money manager’s competencies. Home Economics

Research Journal, 17(6), 309-317.

http://dx.doi.org/10.1177/1077727X8901700404

Vosloo W, Fouche J, Barnard J (2014) The relationship between financial efficacy, satisfaction

with remuneration and personal financial well-being. Int Bus Econ Res J

13(6):1455–1470

Xiao, T., & Shim, S. (2009). Acting for happiness: financial behavior and life satisfaction of

college students. Social Indicator Research, 92, 53-68.

http://dx.doi.org/10.1007/s11205-008-9288-6