CHAPTER I

The PROBLEM and its SETTING

Introduction

Financial knowledge is one’s understanding of matter that is related to finance.

Each individual must be understanding of the macroeconomic and microeconomic

environments, as well as fundamental daily challenges finance includes saving,

investing, borrowing, paying interest rates, inflation, and consumer prices, among other

goods. As a result, financial literacy is a sort of financial knowledge. The phrase

“financial knowledge” is occasionally used interchangeably in this field of study with

financial knowledge.

The process of making a spending plan is known as budgeting. Budget refers to

this plan for spending money. Making this spending plan enables you to estimate your

financial situation in advance and decide whether you will have enough money to

accomplish your goals (MyMoneyCoach, 2022). On the other hand, budgeting practices

are the methods on how people plan, organize and spend their money.

According to Grohmann (2018) and Lusardi (2017), evidence from many

countries demonstrates that financial literacy has a favorable impact on people’s

financial inclusion and is a significant factor in determining wealth and economic

inequality. Wealth disparity results from a gap between those who are financially

educated and those who are not, as individuals with financial understanding are more

likely than those without to make prudent investments.

In the Philippines, lots of people suffer from shortage of income. According to

Business Mirror (2022), only 25% of Filipinos were able to correctly answer financial
literacy questions in polls, indicating that the notion of financial literacy is almost

unfamiliar to the bulk of our country’s residents.

CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the foreign and local literatures and studies gathered from

online journals, books and research study resources by the researchers in order to have

guide and more accurate paper. This helped the researchers to have a better

understanding and wider perspective on the topic gathered.

1. Related Literature

Financial Knowledge

Individuals need financial knowledge to compare financial products and services

and make appropriate, well-informed financial decisions. Consumers can navigate

financial matters with greater confidence and respond to news and events that may have

implications for their financial well-being if they have a basic understanding of financial

concepts and the ability to apply numeracy skills in a financial context. (Organisation for

Economic Co-operation and Development, (2020)

According to Klapper et. al (2015) financial knowledge is essential now, as

financial products are becoming more complex are accessible to a large portion of the

population. For instance, numerous governments countries attempting to increase the

number of individuals with bank accounts and access to financial services and there is a

substantial increase in access to credit products. In addition, the pension environment

has changed. Participants who previously relied on their jobs or governments for their

financial stability after retirement will now be in charge of making decisions.

 CHAPTER III

RESEARCH METHODOLOGY

This chapter presents the methodology that will be done by the researchers in

conducting the study. It includes the research design, the respondents of the study, the

instruments use in gathering the data, instruments’ reliability and the statistical tool that

will be used by the researchers in the study.

Research Design

This research study used descriptive correlational design. This quantitative

research study is aimed to provide static pictures of situations as well as establish the

relationship between different variables (McBurney & White, 2009).

Descriptive research aims to accurately and systematically describe a

population, situation or phenomenon. It can identify characteristics, trends and

correlations. (McCombes, 2019)

A correlation reflects the strength and/or direction of the relationship between

two (or more) variables. A correlation’s direction can be either positive or negative. A

correlational research design looks into relationships between variables without allowing

the researcher to control or manipulate any of them. (Bhandari, 2021)

 CHAPTER IV

PRESENTATION, ANALYSIS and INTERPRETATION of DATA

This chapter presents the analysis and interpretation of data collected and

interpretation of data collected by the researchers in order to come up with the answers

to the questions of the study.

1. What is the level of financial knowledge of residents in Barangay Estrella in

terms of:

a. expense tracking

b. planning

Table 4

Mean Perception of the Residents in Barangay Estrella in their Level of Financial

Knowledge in Terms of Expense Tracking

No. Items Mean Description

1. Tracking family’s daily expenses. 3.50 High

2. Listing down expenses. 3.20 Moderate

3. Calculating the total money spent. 3.56 High

4. Categorizing expenses. 3.26 Moderate

5. Awareness of the different types of expenses. 3.40 Moderate

6. Recognizing which should be considered as an 3.38 Moderate

expense or not.
7. Comparing recent expenses to past expenses. 3.48 Moderate

8. Awareness of the importance of receipts. 3.74 High

 CHAPTER V

SUMMARY of FINDINGS, CONCLUSION and RECOMMENDATION

This chapter presents the summary of findings, conclusions and

recommendations the researchers propose after coming up with their analysis.

Summary of Findings

The results of the analysis are the following findings:

1. Residents of Barangay Estrella has moderate level of financial knowledge

in terms of expense tracking and planning indicated by the overall mean of 3.

2. Residents of Barangay Estrella has moderate status level of budgeting

practices indicated by the overall mean of 3.

3. There is a negligible relationship between financial knowledge in terms of

expense tracking and budgeting of residents in Barangay Estrella since the

computed r-value is – 0.14. While there is a low or slight relationship between

financial knowledge in terms of planning and budgeting practices of residents in

Barangay Estrella since the computed r-value is 0.25. Therefore, the null hypothesis

is rejected.