Review Related Literature

Financial Management Capabilities

Financial management is a practice of planning your funds to sustain your needs and
wants. According to Towanda Mitchell (2011), that financial management is a way of
how an individual manage their financial situations in a responsible way in order to
achieve their financial independence. An individual who have a skill in managing
their finances knows how to weigh their expenditure and debts. Financial
management is also a key factor to achieve a financial autonomy (Contreras, R., et.
Al, 2021). Accounting students who have already a prior knowledge on how to
manage their finances might still face difficulties to manage their finances, that’s
because there are factors that affect their decisions.

Financial management capabilities is an ability that someone possess who manages

their finances well, they have enough knowledge, a good attitudes, skills, and
behaviors with regard to managing their resources and understanding their financial
situations, selecting, and making use of financial services that fit their needs (The
World Bank, 2024). Young adults specifically the students can benefit if they acquire
these skills, they can achieve a financial well-being wherein they can fully meet their
current and ongoing obligations, feel secure of their financial future, and are capable
of handling their finances and making financial decisions that allow them to enjoy life
(youth.GOV, 2024). In order to acquire this necessary skills an individual must
practice the following skills, money management, savings management, expenditure
management, debt management, and investment management.

Money Management

Money management is a practice when an individual starts to manage their finances,

they will have a better point of view of where, when, and how they will spend their
money. Once an individual start to follow their budget strictly, they will do their best to
spend within their budget, and it can even increase their savings. With a good money
management practice, an individual can learn to control their money and achieve
their financial goals (Letting Agent Today blog, 2015). Moreover, money
management can be a challenge sometimes even for the very well-off, and it is more
difficult to do it if you are a student, especially when you have to budget your
allowance for a week or month (Jantz, 2022).
Savings Management

Savings management is a process of estimating money to save based on the factors

such as tracking, planning, and mapping savings. It can help to control spending and
achieve in savings by having a clear pictures of accounts and planning strategies
(Zycus Procurement Blog, 2023). When an individual practices savings
management, it will help them to be frugal, and spend their money wisely. According
to Banco Central de la Republica (2021), that “Saving money is a healthy habit that
is built on a day-to-day basis. You should start today to get in a lot of practice in
saving until it becomes a habit.” A students should acquire this skill because it is
helpful not only today but also in the future.

Expenditure Management

Expenditure management is also one of a necessary skill that a person should have.
Expenditure management focuses on ensuring that the money that is allocated to
pay your expenses should be prioritize. This also include planning of resources and
transferring money to functions, controlling, and executing expenditures (Morrell,
2017). Having a good management on expenditure will lessen the burden of
acquiring more debts, it will help an individual to be careful in spending their money
lavishly.

Debt Management

Debt management is a process of organizing and controlling debt in a way that

lessen financial risk and increase the ability to meet financial goals. This also
involves assessing debt situations, creating a plan on how to repay debt, and
implement strategies to prevent future debt-related problems. Debt management is a
key factor especially to those students who have student loans, or other forms of
debt (Tamplin, 2023). A good debt management practice will enable an individual to
assess their need and up to what amount can they afford to borrow.

Investment Management

Investment management is a process of decision making about investment. It also

encompasses a wide-range of investment opportunities for individuals to grow their
wealth (Pandey, 2023). Investment management is a good practice especially if an
individual need funds. This is also applicable to students, having a good investment
management practice will help them to be more observant and read the market
trends.

References

Contreras, R. C. C., Olapane, E., Cataluna, M. P., & Buenviaje, L. C. (2021).

Financial Management Capabilities among personnel in a State University in the
Philippines. Journal of Economics, Finance and Accounting Studies, 3(2), 158-168.

(https://doi.org/10.32996/jefas.2021.3.2.16)

(https://al-kindipublisher.com/index.php/jefas/article/view/2391)

Towanda Mitchell .(n.d). Financial Information Rights and Education: UMBC, Money
Matters Seminar.

(http://www.umbc.edu/promise/Fianacial%20%Management%20Seminar.htm)
Retrieved 20 June 2011.

The World Bank (2024). Financial Inclusion and Consumer Protection

(https://responsiblefinance.worldbank.org/en/responsible-finance/financial-
capability#:~:text=Financial%20capability%20encompasses%20the
%20knowledge,services%20that%20fit%20their%20needs.)

Youth government (2024). Financial Capability and Literacy

(https://youth.gov/youth-topics/financial-capability-literacy#:~:text=Financial
%20capability%20is%20%E2%80%9Cthe%20capacity,future%2C%20and%20are
%20capable%20of)

Letting Agent Today (2015). The Importance of Having Good Personal Finance
Management

(https://www.lettingagenttoday.co.uk/the-importance-of-having-good-personal-
finance-management#:~:text=When%20you%20start%20managing%20your,can
%20achieve%20your%20financial%20goals.)

Jordan Jantz (2018). 10 Money Management Tips for College Students

(https://www.rasmussen.edu/student-experience/college-life/money-management-
tips-for-college-students/)
Zycus Procurement Blog (2023). Financial Savings Management

(https://www.zycus.com/glossary/financial-savings-management/#:~:text=Financial
%20savings%20management%20refers%20to,and%20planning%20their
%20strategies%20accordingly.)

Banco Central De La Republica Argentina (2021). What is Saving?

(https://www.bcra.gob.ar/BCRAyVos/Aprendiendo-a-ahorrar-que-es-el-ahorro-
i.asp#:~:text=Saving%20is%20the%20portion%20of,Why%20should%20we
%20save%20money%3F)

Lance Morrell (2017). Expenditures and Revenue Management

(https://thedocs.worldbank.org/en/doc/484781545085003699-0090022018/related/
100Expenditure0and0Revenue0Mgt.pdf)

True Tamplin (2023). Debt Management

(https://www.financestrategists.com/financial-advisor/debt-management/
#:~:text=Debt%20management%20refers%20to%20the,prevent%20future%20debt
%2Drelated%20problems.)

Nikhil Pandey (2023). What is Investment Management? Types, Career, And How It
Works?

(https://emeritus.org/in/learn/finance-investment-management/)