16

CHAPTER II

REVIEW OF RELATED LITERATURE

This chapter shows the studies and related literature which

are research bring out further information about the topic
factors that affect excessive use of money.

Money is used as a tool for many purposes in our everyday

lives but the meaning that money carries subjected to an
individual’s valuation. An individual’s attitude towards money is
learnt from the culture of society, and one’s childhood and
adulthood experiences (Tang et al.,2003).

Money may not be the best solution to how people most happy
are, but money do matters. As Mae West once said, “I’ve been
rich, and I’ve been poor; believe me, rich is better.”

According to Tang, Tang and luna-Arocas (2005), an

individual’s attitude towards money is not a need but it is the
love of money and his or her “desire for money”. In a
materialistic society, almost every one works for money. It is
especially true if people who value money, their minds are
controlled heavily by money and they thereby become the slaves
for money (Tang et al., 2003).

For many people, pocket money is their first taste of

financial responsibility. Giving a teenager a regular, set amount
of money and responsibility of paying for something they want
gives them the opportunity to practice good money management.
 17

“An allowance is not an entitlement or a salary. It is a

tool for teaching children how to manage money.” (Godfrey, 2013)
allowance is an amount of money given. It is a need for teenagers
where they can save up for their wants or daily needs.

Financial literacy is a basic knowledge that people need in

order to survive in a modern society. Garman & Forgue (2000)
defines financial literacy as knowing the facts and vocabulary
necessary to manage one’s personal finances successfully. People
with low levels of financial literacy seem to benefit more.

Financial literacy can clearly be a factor in avoiding

financial risks, it is also important for taking advantage or
financial opportunities. According to Huston (2010, p.306),
financial literacy such as health or general literacy might be
conceptualized with two main dimensions: understanding personal
finance knowledge and using it.

Meanwhile, in financial literacy studies, it can be largely

seen that financial literacy is interchangeable termed with
financial education, financial knowledge or financial
sophistication in the literature (e.g., Howlett, Kees and Kemp,
2008, pp.223-242; Al-Tamini and Bin Kalli, 2009, pp.500-516;
Smith, Finke and Huston, 2011, pp.3-15; Yoong, See and
Baronowich, 2012, pp. 75-86).

No matter where or how we shop, the temptation to spend

money on random stuff follows us everywhere we go. People spend
money for so many reasons, and if we’re just a little honest with
 18

ourselves, a lot of those reasons can be chalked up to how we’re

feeling in the moment.

Teenage years can be difficult and money matters can seem

insignificant. But good money management is important for them to
learnt financial independence as they get older. It is important
that teenagers recognize the value of money and understand that
it’s not an unlimited resource. Giving them the freedom to manage
their own budget will teach them two valuable lessons: only spend
what you can afford and avoid the pitfalls of unplanned expenses.

Good money management skills are the process of budgeting,

saving, investing, spending the cash usage. Though it is not
something we are born with, they are acquired over one’s lifetime
through many successes and some failures as well.

Part of teaching teenagers how to manage their finances

comes down to setting boundaries with the money you give them not
bailing them out if they overspend. It’s better to learn the hard
way now, while the amounts are small, rather than later when
overspending can lead to problem debt. It is important to control
for financial resources and financial knowledge in predicting
financial stress of Senior High Students. It appears that
subjective measures of knowledge and self-efficacy may be equally
as important.

Students having knowledge of personal financial management

and the marketplace are indicative of a greater ability to manage
the family’s financial resources (Godwin, 1994). People are more
likely to achieve their financial knowledge limits personal
 19

management and may cause financial problems, resulting in lower

financial well-being.i

Humans need certain needs in order to grow and operate

normally (Brewster Smith, 1977; Lederer, 1980). Everything that
is missing generates a need, which leads to a state of
"disequilibrium" (Doyal & Gough, 1991). According to Alderfer
(1972), needs must be met in order to maintain homeostasis. Needs
are things that are required to achieve a certain state of being,
such as being well, a member of a family, or a worker (McLean &
McMillan, 2009). The majority of writers accept that meeting
basic needs avoids "extreme injury" and death (Doyal & Gough,
1991; Kamenetzky, 1992; Lederer, 1980; Mallmann, 1980; Marshall,
1998; McLean & McMillan, 2009; Reader, 2005; Soper, 1981;
Thomson, 1987; Wiggins, 2005). Others add to this meaning by
mentioning the prevention of disease and the enhancement of
quality of life (Loewy, 1990; C. B. Macpherson, 1977). According
to Gough (2004) and Alkire (2005), needs and how they are
addressed are often dictated by experts rather than the people
who are supposed to gain. Normative needs are those that are
identified by experts. When it comes to normative needs, they are
specified by guidelines. Differences in these normatively
identified needs can occur because experts disagree and evidence
changes over time. It's also debatable if these requirements
apply to the whole population.ii

In economics, human wants refer to all of a person's

desires, aspirations, and motivations. And economic wants are
those that can be satisfied with any kind of goods or services.
Economic human wants include things like food, housing, clothes,
and so on. Non-economic wants such as harmony, passion, and
 20

affection, for example, cannot be purchased. We can classify

wants into three broad categories in economics. These are
Necessaries, Comforts, and Luxuries. Let us take a look at all
three. Human desires are completely necessary for life and
survival. Further necessaries will be divided into life
necessaries, quality necessaries, and finally traditional
necessaries. The first and most critical desires are
unquestionably necessary for survival. Food, water, clothes,
housing, and other necessities are among them. Comforts are the
desires that make a person's life more pleasant and fulfilling.
In general, these are things that save the human labor or provide
him with comfort in his daily life. Things like fans, furnished
homes, special occasion clothes, and so on fall under this
category of human desires. These are items that provide humans
with pleasure and social status. They are not required for
survival or comfort, but they do bring joy and acceptance to the
world. These desires may be classified as superfluous. And such
objects are usually very costly.iii
i
lib.vit.edu/studentsrepo.vm.edu.my/coureshero.com/researchgate.net/scribd.com/
nrol3.neda.gov.ph

ii
journals.sagepub.com
iii
toppr.com