EXPLORING HOW FINANCIAL LITERACY AFFECTS THE SPENDING

HABITS AND FINANCIAL WELL-BEING OF GRADE 11 STUDENTS

A Research Project
Presented to
Senior High School Department
Accountancy, Business and Management (ABM) Strand
EVELAND CHRISTIAN COLLEGE
San Mateo, Isabela

In Partial Fulfillment
of the Requirements for the Subject
INQUIRIES, IMMERSION, AND INVESTIGATION

ABADIEZ, Carla Mae P.

ADRIANO, Yvonne Xyrille A.
ALLAM, Ruben Jr. G.
DE LEON, Charish Mae V.
GALAPON, Ivinchelle Grace D.
GALOLO, Geosan C.
GRAGASIN, Michael B.
MINA, Mariah Ryzanjela C.
ORTIZ, Joshua A.
SOBREMONTE, Princess Larra G.

2024

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 CHAPTER I

THE PROBLEM AND ITS BACKGROUND

INTRODUCTION

It has become essential for individuals of all ages to be able to manage

their finances in a time of unusual economic complexity. The passage from

Junior high school students to Senior high school students brings with it

several financial commitments and choices that have a substantial impact on

students’ overall welfare. To understand the complex relationships between

knowledge, behavior, and overall welfare, this research paper examines the

key junction between financial literacy and students’ spending patterns.

Financial literacy education’s importance has only recently

gained widespread recognition, with educators, lawmakers, and parents all

acknowledging its significance in developing responsible financial practices.

Children of today are the economy's future; therefore, it is imperative to

provide them with the resources and information they need to make wise

choices regarding their finances. For those who are poor, financial literacy

makes it more difficult to improve their financial situation. People with lower

incomes may also be negatively impacted by financial assets if they fall into

the "bank fee poverty trap." They fall into this trap because they have little

bank balances or no mortgages Controller (2018). Additionally, research has

revealed that people with low financial literacy are more likely to make poor

financial decisions, accumulate more debt, and may encounter difficulties in

saving for their future.

A lot of people, mostly students have difficulties in managing their

finances because of their lack of knowledge in financial literacy. According to

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a study, more than 60% of respondents to a 2020 Intuit survey of at least

1,500 people reported lacking awareness of how much money they had spent

the previous month (Paul, 2021).

Financial literacy involves the knowledge and skills required for making

wise financial decisions. It entails understanding common financial challenges

such as emergencies, loans, and investments. Financially knowledgeable

individuals are familiar with budgeting, saving money, and distinguishing

between 401(k) and 529 plans. While grasping statistics and facts about

money is crucial, mastering financial literacy necessitates consistent, prudent

financial outcomes. Financial literacy is not solely about possessing

information but also about making prudent financial decisions.

(Yuen, 2022) found that some students still lack basic financial literacy

and management skills, indicating that higher education does not necessarily

lead to strong financial literacy.

A global study reveals the Philippines ranks 30th out of 144 countries

in financial literacy, with only 1% of surveyed Filipino adults correctly

answering financial literacy questions. (Crismundo, 2023). To fill up this gap,

education in financial literacy is now covered in grades K–12. The topics of

saving money, family budget pie charts, and unemployment are covered in

grades K–6, 6, and 11 which will be given focus in this investigation.

However, more considerate resources are required (Lee-Chua, 2020).

Also, Rep. Sharon Garin of the AAMBIS-OWA Party list observed that

financial literacy in schools has been slow, which is why she advocated for its

inclusion in all educational institutions. The Saves and Investments Act of

2021, also known as House of Representatives Bill 9058, aims to equip young

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Filipinos with the knowledge to start long-term savings and investments

before senior high school Metrobank (2023).

Having this, the researchers are motivated to find out how financial

literacy affects spending habits and the financial well-being students of the

students, particularly the Grade 11 students.

STATEMENT OF THE PROBLEM

The general research question associated with this topic is: How does

financial literacy impact the spending habits and financial well-being of Grade

11 students? This question is the main focus of the study, which aims to

investigate the complex relationship between financial literacy and the

financial behaviors of Grade 11 students. Additionally, the study seeks to

address the following specific inquiries:

1. What is the level of financial literacy of Grade 11 students?

2. Where do the Grade 11 students spend their allowance?

3. What factors affect their decision when it comes to spending?

4. Is there a significant relationship between the level of Financial Literacy and

their spending habits and financial well-being?

SIGNIFICANCE OF THE STUDY

The research study titled "Exploring How Financial Literacy Affects the

Spending Habits and Financial Well-being of Grade 11 Students" holds

significant relevance for students, teachers, parents, and future researchers.

To Students

This study offers students valuable insights into managing their

allowances wisely, helping them make informed spending decisions. It

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empowers them with financial literacy skills crucial for their future financial

well-being.

To Parents

Parents gain a deeper understanding of their children’s spending habits

through this study, enabling them to provide appropriate guidance on

managing allowances. It equips them with knowledge on how to effectively

support their children financially.

To Teachers

Teachers, especially those teaching subjects related to business, can

utilize this study as a credible resource for lesson planning. It provides them

with real-world examples and data to enhance classroom discussions on

financial management and responsible spending.

To Future Researchers

This study serves as a valuable reference for future researchers

interested in exploring similar topics. It offers a framework and insights that

can guide their research efforts and contribute to the ongoing conversation on

financial education and youth spending behavior.

SCOPE AND LIMITATION

The primary goal of this study is to examine the impact of financial

literacy on the spending habits and economic well-being of Grade 11

students. The purpose of this study is to assess the level of financial literacy

among Grade 11 students. Ultimately, the researchers would want to

understand the factors affecting the decision-making of the Grade 11 students

before spending their allowances.

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Limitations of the study

This study is limited only to Grade 11 Students of Eveland Christian

College. The researchers will determine the respondents with the use of

Simple Random Sampling. The findings of this study may not apply to other

students in different grade levels or ages, as financial systems or educational

approaches in different regions may not be fully considered.

CONCEPTUAL FRAMEWORK

INDEPENDENT VARIABLE DEPENDENT VARIABLE

 Spending
 Level of
habits
financial
 Financial well-
literacy
being

DEFINITION OF TERMS

Financial Literacy – refers to the knowledge and ability of an individual to

understand and use different financial skills, including managing personal

finances and budgeting effectively.

Spending Habits – These are the patterns and choices individuals make

when using their money to purchase.

Financial Well-being – It is a condition in which an individual can comfortably

fulfill current and ongoing financial responsibilities, feels confident about their

financial future, and can make choices that lead to a satisfying life.

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 CHAPTER II

REVIEW OF RELATED LITERATURE

This chapter is an overview of related studies and literature that helped

the researchers find the gap between these past researches.

Research Literature

Financial literacy is an essential skill for individuals to navigate the

complexities of personal finance. It encompasses a range of knowledge and

abilities, including budgeting, saving, investing, and managing debt.

Enhancing financial literacy is essential for individuals to make informed

decisions that promote financial well-being and stability.

Studies show that knowing about money helps people make better

financial choices. Greater financial knowledge is linked to positive money

habits like saving and investing wisely. This connection indicates that

understanding finances can help individuals handle their money well, reduce

financial worries, and create a stable financial future. The growing body of

research undeniably highlights the crucial role of financial literacy in fostering

sound financial behavior and achieving financial well-being. Studies like those

by Kamel & Sahid (2021) and Suyanto et al. (2021) demonstrate a clear

correlation between higher levels of financial literacy and positive financial

behaviors such as responsible saving and investing, even among individuals

with limited resources. Lone & Bhat (2022) also suggest that financial literacy

empowers individuals to navigate their finances effectively, manage financial

stress, and ultimately build a secure financial future.

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 Moreover, teachers and leaders see how important it is to know about

money. They work together to create effective programs. The focus is on

giving people the right information and abilities to make smart financial

choices and adjust programs to fit different needs and groups of people for

wider reach. Recognizing the transformative potential of financial literacy,

educators and policymakers are increasingly collaborating to develop more

impactful programs. Jayaraman & Jambunathan (2018) advocate for joint

efforts to equip students with the knowledge and skills necessary to make

informed financial decisions and mitigate potential pitfalls. Zhang & Chatterjee

(2023) also emphasize the need for adaptable and diverse programs tailored

to specific needs and demographics to reach a broader audience.

Another important factor is understanding how people spend money

and their backgrounds, it is the key to creating good financial literacy

programs. Research shows that teaching financial skills from a young age is

essential because people's spending habits can change as they grow up.

Factors such as age, gender, and ethnicity can also affect how much risk

people are willing to take with their money. This means that programs should

be adjusted to fit different groups of people. Therefore, understanding

spending patterns and demographics helps design effective financial literacy

programs. Research, like that of Cude (2021), emphasizes the importance of

instilling financial literacy and budgeting skills from a young age, highlighting

the differences in spending habits between teenagers and college students.

Sang (2021) further underscores the influence of demographic factors like

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age, gender, and ethnicity on financial risk tolerance, suggesting programs

should be tailored accordingly.

Financial literacy can also significantly impact lifestyle choices and

employability. Gunawan & Chairani (2019) found a link between financial

literacy and responsible spending habits, while Lopus et al. (2019)

demonstrated the effectiveness of programs combining financial literacy and

soft skills training in improving the employability of vulnerable youth.

Furthermore, local environmental factors significantly influence

financial literacy levels. Being able to use banks and money sources makes a

big difference in what you know about finances. Making sure everyone has

the same chance to learn about money is important. Lastly, teaching about

money in ways that fit each person can help them make smart choices and

keep their money safe for the future. Cucinelli et al. (2019) found that access

to financial institutions and resources significantly impacts financial literacy.

Addressing these disparities and making programs more inclusive are crucial

steps toward ensuring everyone can achieve financial well-being.

SYNTHESIS

The literature review on financial literacy shows how important it is to

manage money well and be financially stable. Studies found that knowing

more about finances helps people make smart choices with their money, like

saving and investing wisely. Experts are working together to create programs

that teach financial skills to different groups of people, making sure the

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lessons fit their needs. Understanding how people spend money and their

backgrounds helps make these programs better. Financial literacy also affects

lifestyle and job opportunities, with programs teaching both money skills and

other useful job skills. Making sure everyone has access to financial help and

resources is important for helping everyone be financially secure.

The researchers have reviewed different studies related to financial

literacy and spending habits. They noticed that most studies often look for

factors that affect students’ daily allowance. However, the causes of those

factors that affected their financial situation were not considered. In this study,

the researchers aim to investigate the level of financial literacy of the students

in terms of money-related decisions.

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 CHAPTER III

METHODOLOGY

This chapter discusses the methodology used in the process of this study.

This chapter will cover all aspects concerning the overall data in the research,

including the research design, the respondents of the study, the data analysis

procedure, and the sampling techniques used to collect data. Furthermore,

the validated research instrument given to the respondents and the statistical

treatment used to determine how does financial literacy affects the spending

habits and financial well-being of Grade 11 Students of Eveland Christian

College.

RESEARCH DESIGN

The presence of financial literacy among Grade 11 students has significant

implications for their spending habits and overall financial well-being. To

examine the effect of the level of financial literacy on the spending habits of

Grade 11 students. Exploring the spending habits of Grade 11 students and

their relationship with financial literacy is important to understand the factors

that influence their financial decision-making. In this study, the Correlational

research method was utilized to analyze the association between financial

literacy and the spending habits of Grade 11 students.

RESPONDENTS

This study aimed to know how financial literacy affects the spending

habits and financial well-being of Grade 11 students. The Grade 11 students

were utilized using simple random sampling to be the sample or respondents.

Moreover, they are the most suitable subjects for this study.

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 To calculate the required sample size for this study, researchers

utilized Slovin’s Formula, considering a 5% margin error.

Slovin’s Formula:

N
n= 2
1+ Ne

The Grade 11 consists of 7 sections, with a total population of 393.

However, we utilized a pilot test in Grade 11 Responsibility. Therefore, we

only employed the questionnaire to the 6 sections left as the total population

will be 344 and the computed sample size will be determined to be 185.

ABM Persuasiveness 66 19% 36

STEM Wisdom 60 17% 32

STEM Honor 56 17% 30

STEM Dependability 58 17% 31

HUMSS Courage 53 15% 29

HUMSS Charity 51 15% 27

TOTAL 344 100% 185

DATA GATHERING PROCEDURE

Upon the approval of the proposal, the researchers forwarded a

request letter to the office of the Principal for the conduct of the study. After

the principal approved the letter, the researchers administered the

questionnaires to the respondents. Subsequently, all the questionnaires were

retrieved by the researchers per class. The results were tabulated and

submitted for statistical analysis and to the necessary data inquiry using the

statistical treatment.

3.4 DATA ANALYSIS

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 Quantitative data analysis is a method of studying and understanding

numerical data, identifying patterns, trends, and connections between

variables using mathematical computations and statistical testing. It converts

individual data points into meaningful insights, enabling informed decision-

making (Hotjar, 2023).

In this study, the following data analysis methods was used for every research

problem:

Percentage Frequency Distribution. A common method for interpreting

the relative frequency of survey inquiries and other information. The

procedure entails counting the total number of observations in each data point

and then dividing it by the total number of observations (MyJove, 2024).

This method was used for assessing the level of financial literacy of

Grade 11 students (research problem 1), determining where these students

spend their allowance (research problem 2), and determining the factors

affecting the decision when it comes to spending (research problem 3).

Pearson Correlation Coefficient. The Pearson correlation technique is a

widely used method for analyzing numerical variables. It provides a

correlation coefficient between -1 and 1, indicating a substantial and positive

association between variables (Mujtaba et al., 2019).

This method was used to determine the significant relationship

between their level of financial literacy, their spending habits, and their

financial well-being (research problem 4).

3.5 RESEARCH INSTRUMENT

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 The researchers used a questionnaire to assess Grade 11 students’

spending habits and financial literacy. The questionnaire was distributed

individually to the selected respondents in the three (3) main parts: (a) Level

of Financial Literacy; (b) Where Students Spend Their Allowance; and (c)

What Influences the Spending Decisions of Students.

The first section is designed to measure the level of financial literacy

and comprises seven questions. In the second section, the researchers

investigate the allocation of the students’ allowances, consisting of six

questions. The third section, dedicated to understanding the various factors

that influence the spending decisions of Grade 11 students, encompasses

seven questions.

It is important to keep in mind the level of measurement in determining

every respondent’s satisfactory level for the selected Grade 11 students. To

measure their responses, a Likert scale was utilized. A Likert scale is a

quantitative rating system used to evaluate beliefs, attitudes, or actions. In this

study, the following scale of measurement will be applied: (a) Always, Often,

Sometimes, Rarely, or Never; and (b) Strongly Agree, Agree, Neither Agree,

nor Disagree, Strongly Disagree, or Disagree.

References:

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Cude, B. J. (2021). Defining financial literacy. The Routledge handbook of

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