FINANCIAL LITERACY AND SPENDING HABITS

OF ACCOUNTANCY STUDENTS IN ST. FRANCIS XAVIER COLLEGE

A Research

Presented to

the Faculty of College of Business Education of

St. Francis Xavier College

In Partial Fulfillment

of the degree of Bachelor of Science in

Accountancy/Accounting Information System

by:

Kaye Jay M. Enriquez

Jessa May P. Esmao

Jolina June A. Malahay

January 6, 2023

1
 SAINT FRANCIS XAVIER COLLEGE, INC.
San Francisco, Agusan del Sur
College of Business Education

CERTIFICATION OF THE EVALUATION COMMITTEE

This thesis, A Quantiitative Study on the Financial Literacy and Spending

Habits of Accountancy Students in St. Francis Xavier College prepared and
submitted by Kaye Jay M. Enriquez, Jessa Mae Esmao and Jolina June A. Malahay
in partial fulfillment of the requirements for the degree of Bachelor of Science in
Accountancy/Accounting Information Systems is found to be acceptable in content
and form, and recommended for oral examination.

Chairman

Member Member

JAY T. PUNAYAN, CPA

Adviser

APPROVAL OF THE
ORAL EXAMINATION COMMITTEE

This thesis has been orally examined by the Committee on Oral Examination
and is hereby approved.

Chairman

DR. ALONA S. GALACHE DR. EVANGELINE P. JAMILI, CPA

Member Member

JAY T. JJ, CPA

Adviser

ACTION OF THE COLLEGE OF BUSINESS EDUCATION

Accepted in partial fulfillment of the requirements for the degree of Bachelor of

Science in Accountancy/Accounting Information Systems

January 6, 2023 MARY RAZEL M. FUENTES, CPA, MBA

Date Dean

2
 Table of Contents

TITLE PAGE ………………………………………………………………………………….i

APPROVAL SHEET …………………………………………………………………...……ii

TABLE OF CONTENTS ……………………………………………………………………iii

CHAPTER

1 THE PROBLEM AND ITS BACKGROUND……………………………...1

Introduction………………………………………………………..……...1

Statement of the Problem………………………………………......…..3

Hypothese……….…….………………………………….………………4

Theoretical Framework.…….………………………………….………..5

Significance of the Study……………………………….……………….6

Scope and Delimitation of the Study………………………………......7

Definition of Terms………………………………………………………8

REVIEW OF RELATED LITERATURE AND STUDIES………………9

Conceptual Literature………………………………………………...…

10

Research Literature……………………………………………………..11

CHAPTER

2 RESEARCH METHODOLOGY…………………………………………..12

Research Design ……...………………………………………………13

Locale of the Study……………………………………………………14

Respondents of the Study ……………………………………………15

Data-Gathering Instrument …………………………………………..16

Data-gathering Procedure ……………………………………………17

3
Data Analysis…………………………………………………………..18

4
 CHAPTER 1

THE PROBLEM AND ITS BACKGROUND

This chapter includes the introduction, statement of the problem, theoretical

framework, significance of the study, research questions, scope and the delimitation,

and the definition of terms used.

Einführung

The economy of the modern world keeps changing over time in a way that

involves generations contributing to the change. Access to financial products and

services increases, and people need to be able to use the products and services

wisely and effectively. Additionally, younger generations today have higher

expectations for their standard of living, their professional prospects, and the state of

the economy. To evaluate young people’s knowledge and readiness in coping with

the reality of today’s economic situation, we will examine level of financial literacy

and spending behavior to gauge how well-prepared and knowledgeable they are to

deal with the realities of the current economic situation. This study will discuss the

level of financial literacy of Accountancy Students in SFXC in the field of financial

literacy as to how students in this course manage and spend their money wisely.

Organization for Economic Cooperation and Development (OECD.), defined

financial literacy as "A combination of knowledge, awareness, skill, attitude, and

behaviour necessary to make better financial decisions and ultimately achieve

individual financial well-being" (OECD INFE3, 2011). It is the ability to make informed

judgments, to take effective decisions and successfully implement it with regards to

the management and use of money. It is important, to ensure the sustainable

1
development of society and individual, particularly the youth. Taking into

consideration the fact that young individuals are a significant factor for the

development of national economy, substantial improvement of young people’s

financial literacy is essential. Young people with a high level of financial literacy

would be those who could give greater contribution to state economy, so it is

important to research the level of financial literacy among young people (Caplinska,

A., & Ohotina, A., 2019).

A good financial literacy is necessary for every individual to manage his/her

finances to achieve prosperity. For this to happen, individuals need to have a smart

financial behavior to make them have the skills and confidence in using knowledge

to be able to identify financial products and services (Dwiastanti, 2015). Nowadays,

young people, especially the college students are lacking in their financial decisions.

College students face a unique situation during their college time period due to

limited incomes and high expenses (Micomonaco, 2003). One of the most difficult

money challenges that they typically experience is staying on top of what they are

spending, which means that they have difficulty controlling the way they spend and

most of them are unsure on how to manage their money wisely (Holland, 2016).

Financial literacy is not fully emphasized in the Philippine education system.

The researchers decided to study the financial literacy and spending habits of

students under the Bachelor of Science in Accountancy in Saint Francis Xavier

College. The study determined the current status of the students in terms of personal

finance and how the students can improve their knowledge and skills toward proper

management of their finances. Likewise, it aimed to find out how beneficial it is for a

college student, specifically to BSA students, to understand the manner and

2
importance of their financial literacy and spending habits so that they can have the

ability to determine how and where their money goes. This study can also help them

avoid committing more money management mistakes and be more confident in

managing their finances.

Statement of the Problem

Generally, this study aimed to determine the level of financial literacy and

spending habits of Accountancy students in Saint Francis Xavier College.

Specifically, this seeks to answer the following questions:

1. What is the demographic profile of the respondents in terms of:

a. Age

b. Sex

c. Course

c. Year level

d. Monthly allowance

2. What is the students’ level of financial literacy?

3. What is the students’ level of spending in terms of:

a. Personal needs

b. Academic purposes

c. Food

d. Transportation

4. Is there a significant difference in financial literacy and spending habits when

grouped according to variable profile?

3
Hypothesis

There is no significant difference in financial literacy and spending behavior when

grouped according to variable profile.

Theoretical Framework

An individual's financial decision evolves as they mature. According to the

Life-Cycle Theory of Consumption, a person's financial behavior evolves as they

mature and is influenced by the amount of goods and services they consume in

relation to their needs and wants.

An individual's basic financial knowledge is made up of the principles they

have learned at home and from various institutions. This then influences how they

behave with regard to money. The way someone views this fundamental financial

idea has an impact on how they behave in terms of their spending. Different factors,

such as their sex and age, have an impact on their behavior. Because different

sexes have different personalities and characteristics, gender influences how they

make decisions. The other factor, age, also has a significant impact on behavior

because as people get older, their needs and desires differ.

Conceptual Framework

The following diagram shows the independent and the dependent variables of

the study which help grasp and understand what the research is about. The

conceptual framework is formulated to explain the relationship between dependent

variable and independent variables. In this study, spending habits are regarded as

dependent variable whereas; demographic profile and financial literacy are

categorized as independent variables.

4
Figure 1. Conceptual Framework.

Demographic Profile

 Sex
 Course
 Year Level
 Ethnicity
 Socio Economic Status
Spending Habits
 Monthly allowance
 Personal Needs
 Academic
purposes
 Food
 Transportation

Financial Literacy

Independent Variable Dependent Variable

5
Scope and Delimitation of the Study

The study was conducted in St. Francis Xavier College wherein accountancy

students were used as a sample. This study will focus on determining the financial

literacy and spending habits among college students, particularly, BSA students of

Saint Francis Xavier College. In this regard, this study will find out the demographic

profile of respondents in terms of age, sex, course, year level, and monthly

allowance. At the same time, the respondents assess spending habits in terms of

personal needs, academic purposes, food, and transportation.

Significance of the Study

The study aims to provide valuable data which will be helpful in making the

decisions for college administrators, instructors, parents, students, and Future

researchers. By indicating financial awareness, students' spending patterns may

alter for the better. The researchers hope to learn about the financial literacy of

accountancy students in terms of spending habits.

Students.The findings of this study would benefit the students by giving awareness

about their current condition with regards to spending.Especially that they are

accountancy students, in which they may handle money and resources in the future

where they will be needing the skill to maintain their resources.

6
Teachers. The findings of this study would benefit the teachers by being aware of

their student's level of financial literacy and spending habits, they will be able to

know what necessary skills they need to focus on in teaching their students.

Administrators of SFXC. The findings of this study would then assist the

administration in determining what initiatives and policies to employ to address the

improvement of students' financial literacy.

Parents. The findings of this study will enable parents to determine how financially

literate their children are and to arm themselves with the information they need to

help their children become financially literate.

Future researchers. For the Future researchers who want to do the study on the

same issue might use this work as a reference in conducting new research.

Definition of Terms

Financial Literacy - refers to the capacity to comprehend and use a variety of

financial concepts and abilities, such as personal financial management, budgeting,

and investing.

Spending habits - is the way you are used to paying money for things, the things you

spent money for and how much you are used to spending, all of which is hard to

change.

Financial Knowledge – this refers to the sufficient knowledge about facts and

personal finances and is the key to the personal financial management behaviors.

7
Financial behavior - defined as how good a household or individual manages

finances such as Saving habits, Budgeting habits, Debt Management Habits, and

Spending Habit.

Review of Related Literature and Studies

Financial literacy refers to the understanding of basic financial skills and

concepts. It’s not just about knowing the information, but about successfully

implementing it into your own life. When people have financial literacy, they have the

knowledge and confidence to make informed financial decisions. It allows people to

responsibly manage their money, borrow and save, and plan and invest for the

future. Financial literacy is more important than ever before. As technology grows

and society changes, finances become even more complicated. As a result, it’s

essential that college students leave school with solid financial knowledge.

Unfortunately, financial literacy rates are decreasing and Americans’ financial habits

show it. Savings rates are decreasing while debt is increasing, and wages are

remaining stagnant. College students who prioritize financial literacy will be able to

overcome these challenges and live comfortably in the future.

According to Mason and Wilson (2000), a financial literacy is a "meaning -

making process" in which individuals use a combination of skills, resources, and

contextual knowledge to process information and make-decisions with knowledge of

the financials consequences of that decision. From the definition given above, it can

be concluded that financial literacy is an individual decision making that uses a

combination of several skills, resources, and contextual knowledge to process

information and make decisions based on the financial risk of the decision.

8
 Financial literacy is a basic knowledge that people need in order to survive in

a modern society. People should know and understand credit card and mortgage

interest, insurance, and saving and investing for the future. Garman & Forgue (2000)

defines financial literacy as knowing the facts and vocabulary necessary to manage

one’s personal finances successfully. Having knowledge of personal financial

management and the marketplace is indicative of a greater ability to manage the

family’s financial resources (Godwin, 1994). People are more likely to achieve their

financial goals with appropriate knowledge. Lack of personal financial knowledge

limits personal financial management and may cause financial problems, resulting in

lower financial well-being.

The Wisconsin Hope Lab recently released a report last 2018 that looked at

43,000 students from 66 colleges, universities and community colleges from 20

states and the District of Columbia. The survey found that 36 percent of university

students don't have enough money for enough food and 42 percent of community

college students are hungry or not getting a balanced diet (Goldrick-Rab,

Richardson, Schneider, Hernandez, & Clare, 2018). Learning financial literacy is a

promising way to improve financial capacity for today’s young people (Duquette,

2018). Students tend not to know what to value first, and they tend to spend it on

things that are not important. That is why, it becomes inevitable for people to

overspend when they buy things because they do not know how to prioritize the

significant ones (Paine, 2012). Not knowing what to prioritize is the time when

financial planning comes in. Based on the book "Financial Management” by

Ferdinand L. Timbang (2015), financial planning is useful for both short-range and

long-range plans. Financial planning serves as a basis of the operations or the

allocation of funds the person has to undergo. Financial planning summarizes.

9
 In one word: ‘budgeting. '‘Financial literacy is both an important life skill and a

critical intellectual competency' and 'an essential component of a college degree.'

(Kezar, & Yang, 2015). It is not mandatory to be a 9 professional to be a financial

literate, but one needs to be a person who can maximize present money to gain

financial stability. Logically speaking, it is necessary that students must learn how to

handle money as they are expected to earn at a later stage in their lives.A study by

Acheampong, Kyei-Baffour, Hanson-Cobbinah, & Osei, (2015), about the

Assessment of Financial Literacy among University Students, found out that almost

half of the population surveyed is financially illiterate. One reason for the low level of

knowledge is the systematic lack of personal finance education in the college

curricula. Given the lack of financial education, it is not surprising that the results

show that university students have inadequate knowledge of personal finance.

Another research paper by Mohd Rahim Ariffin and Zunaidah Sulong (2017)

studies specifically about the financial literacy level and students' perception towards

saving behavior of a population, showed that saving behavior, parental socialization

and peer influence had a positive correlation with financial literacy, whereas self-

control showed a negative correlation with financial literacy. In the Philippine

economy, prices of the commodities become higher, and money has gained more

value today. Additionally, there are little to no objects left that cannot be bought by

money. It is why it is essential to spend it wisely and to do so; one must have

sufficient knowledge about budgeting (De Guzman et al., 2012).

Spending Habits

Poor spending habits are a behavioral pattern that is characterized by a lack

of self-discipline regarding continued overspending. According to the social learning

10
theory, spending habits are learned from parents and other key personalities

(Fluellen, 2013). Individual childhood experiences comprise ways parents manage

money and the money management lessons received. Parents are critical impetus in

their children‘s lives when growing. The positive and negative spending habits

displayed are subject to their parents‘ habits (Hadzic & Poturak, 2014). The

agents of socialization, such as family and peer groups, have great influence on an

individual ‘s attitude towards money (Hadzic & Poturak, 2014). Pillai et al. (2010)

state that a young adult ‘s spending habits play a key role in the sustainability of their

finance resources and is an important variable in financial judiciousness. Young

adults have the tendency to immediately spend their money on consumable

products, thereby neglecting long-term financing matters such as investment (Shaari

et al., 2013). Financially literate students normally spend a greater proportion of their

money on durable goods, such as housing, education, and investment rather than

on food, clothing, and other luxury goods. Thus, an improvement in students'

financial literacy is desirable and recommended for universities (Shaari et al., 2013).

11
 CHAPTER 2

Research Methodology

This chapter presents the research methodologies used in the study. This

covers the research design, locale of the study, respondents of the study, research

instrument, validity of the research instrument, reliability of the research instrument

and data-gathering procedure.

Research Design

The researcher will use descriptive research design where quantitative

methods were employed to collect and analyze data. Descriptive research, according

to McNeill and Chapman (2018), aims to describe the traits or behaviours of a target

audience as well as to describe or validate an objective or hypothesis with regard to

a particular group of people. This design will include procedures in which

researchers will administer a survey to a sample or group of respondents in order to

describe the perceptions, attitudes, behaviors or characteristics of the population.

A quantitative method, according to Creswell (2014), is a type of study where

it involves the processes of collecting, analyzing, interpreting, and writing the results

of a study. Specific methods exist in research that relate to identifying a sample and

population, specifying the strategy of inquiry, collecting and analyzing data,

presenting the results, making an interpretation, and writing the research in a

manner consistent with the study. This particular approach will guide the researchers

in assessing the financial literacy and spending habits of accountancy students.

12
Locale of the Study

Sour
ce: Google Map

Figure 2: Location Map of Saint Francis Xavier College

The study will be conducted in the Bachelor of Science in Accountancy

Department, specifically in the P and M building of Saint Francis Xavier College

where most of the accountancy students were having their class.

13
Respondents of the Study

The researcher selected the college students of St. Francis Xavier College to

be the respondents of the study. Specifically, the researchers will have St. Francis

Xavier College accountancy Students only, to participate in the study since they’re

usually the ones who are and will be exposed more in financial matters that they

need to be aware of the level of their financial literacy.

Moreover, the researchers will use the purposive sampling procedure for the

selection of the respondents. Crossman (2020) stated that a purposive sampling

method is a non-probability sample that is chosen according to the

characteristics of a population and the objectives of the study. A non-

probability sampling is based on judgment where elements have an unequal chance

of being chosen.

Instrumentation

The researchers will use a questionnaire as their research instrument to

gather necessary data. Some parts of the survey questionnaire were adapted to the

research study entitled, "Spending Behavior of Management Students of University

of Saint Louis Tuguegarao, Cagayan Abawag, et al., 2019.”

The questionnaire is divided into three parts. The first part was designed to

determine the respondent’s personal data and information such as age, sex, course,

year level, and their monthly allowance. The second pertains to the financial literacy

of the respondents. The last part is about the spending behavior of the respondents,

they were asked to indicate to what extent they agree or disagree with the

statements about personal needs, food, academic purposes and transportation. We

will also be using a 4-point likert scale to measure our respondent’s answers.

14
Data Gathering Procedure

To have a complete view of the study’s analysis, data is systematically

gathered during the collection of data from a variety of sources. It is the core part of

the study because it will serve as the foundation for the desired results. To complete

the process of gathering data and information, appropriate tools or instruments were

needed. To begin the process, the researcher will address a letter of approval to

conduct a study at St. Francis Xavier College. The researchers will construct a set of

guide questions and it will be validated by a statistician.

Permission from the willing respondents will be asked before the researchers’

conducts the brief orientation regarding the scope of the study. To secure that the

questionnaires will be properly filled out, the researchers will personally monitor the

respondents while answering.

Data Analysis

The data will be gathered through the use of survey questionnaires. The

researchers will use Statistical Package for the Social Sciences (SPSS) in analyzing

the data. With the application of appropriate statistical approach for the study, data

will be tally, analyze and interpreted after. The following are the specific statistical

tools that the researchers will be using:

Frequency and Percentage. This will determine the profile of the respondents

in terms of age, sex, course, year level and their monthly allowance.

Weighted Mean. This will assess the financial literacy of BSA students.

15
Ethical Consideration

An important component of every research is the ethical issues. The primary

goal of the research, truth, and error avoidance is the dissemination of original

knowledge and to match it. Additionally, ethics permits researchers to formulate their

studies collaboratively with the aid of their teacher, classmates, and those with

experience in the field.

Accountability, trust, respect, and fairness are requirements for this ethical

consideration among all individuals engaged in a study. The goal of this value is to

safeguard the contributors' collective intellectual property rights. Another ethical

aspect is our responsibility to the public by safeguarding the study participants. The

methods used to acquire information and the way it is used are the main ethical

concerns in research.

REFERENCES

Sources

Caplinska, A., & Ohotina, A. (2019). Analysis of financial literacy tendencies

with young people. Entrepreneurship and Sustainability Issues, 6(4), 1736–1749.
https://doi.org/10.9770/jesi.2019.6.4(13)
Lusardi, A. (2019) Financial literacy and the need for financial education:
evidence and implications. Swiss J Economics Statistics 155, 1 (2019).
https://doi.org/10.1186/s41937-019-0027-5
Dwiastanti, A. (2015). Financial Literacy as the Foundation for Individual
Financial Behavior. Online), 6(33).
Holland, K. (2016). How to help your new college student avoid money
minefields. Retrieved on December 04, 2022 from
https://www.consumerreports.org/budgeting/money-101-for-collegestudentshowto-
budget/

16
 Jeevitha, P. and Kanya Priya, R. (2019). A Study on Saving and Spending
Habits of College Students with Reference to Coimbatore City. Retrieve December
2022 from https://ijrar.com/upload_issue/ijrar_issue_20543376.pdf
Abawag, C., Ancheta, J., Domingo, I., Rabina, G., Saclote, A. & Taguinod G.
(2019). Spending Behavior of Management Students. Retrieved on December, 2022
from:https://www.academia.edu/38979306/Spending_Behavior_of_management_stu
dents
Mason, C. L., & Wilson, R. M. (2000). Business School.
Garman, E. T., & Forgue, R. (2014). Personal finance. Cengage Learning.
Godwin, D. D. (1994). Antecedents and consequences of newlyweds' cash
flow management. Financial Counseling and Planning, 5.
Belasco, A., Bergman, D., & Trivette, M. (2022). Colleges Worth Your Money:
A Guide to What America's Top Schools Can Do for You. Rowman & Littlefield.
McCarthy, P. C. (2015). Today's college student: Measuring the effectiveness
of financial literacy education and effect on subsequent student debt. Indiana
University of Pennsylvania.
Albeerdy, M. I., & Gharleghi, B. (2015). Determinants of the financial literacy
among college students in Malaysia. International Journal of Business
Administration, 6(3).
Ariffin, M. R., Sulong, Z., & Abdullah, A. (2017). Students’ perception towards
financial literacy and saving behavior. World Applied Sciences Journal, 35(10), 2194-
2201.
Harikumar, P. N., & Susha, D. (2017). Factors affecting the financial literacy of
the bank customers. Splint International Journal of Professionals, 4(7), 15-23.
Basa, C., De Guzman, V., & Marchetti, S. (2012). International migration and
over-indebtedness: The case of Filipino workers in Italy.

17