3 I's RESEARCH

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CHAPTER I

INTRODUCTION

Background of the Study


The purchasing power of the youth today is said to be higher than any other
generations before, this goes to show that the said generation has influence that will continue
affecting the world’s economies (Honigman, 2013). As early as a child can be he or she must
be exposed in the area of financial management. The reason is that financial habits that
people learn during adolescence persist through adulthood (Seuntjens, Van De Ven,
Zeelenberg, & Van De Schors, A. 2016). The spending conduct of youth and their
constrained comprehension of cash administration strengthen tendencies that can potentially
result in costly budgetary errors today and later on (Bona, 2017).
As a child grows, their needs grow along with them. The ability to be able to avail
certain products like food or project materials is not the same for every child. Teenagers have
different costs regarding school and personal expenditures. Most teenagers have financial
support from their parents (Seriña-de La Paz & Que, 2013). In line with the previous
statement, the youth tend to forget the difficulty of obtaining money. The way teenagers
spend has many factors, such as habits, upbringing, lifestyle, economic status, and many
more. However, when it comes to budgeting money, many falls short as the majority of the
youth in the United States have less than one- thousand dollars in their savings account
(Elkins, 2017).
Money is the most common and universal medium of exchange to obtain the goods
and services a person needs. (Kenton, 2018). The factors age, personality traits, and
knowledge can serve as a basis on how college students manage their money. The ability to
manage expenses and savings is called budgeting Budgeting is significant for financial
stability, ensuring oneself of being able to pay for everyday expenses. Students learn how to
save their allowance as they grow and meet different requirements in school as well as things
they want to buy for their own. With their young age and lack of experience, it is hard for
college students to budget their allowance on their own (De Guzman et al., 2012).
Students learning to manage their money is a significant process during their maturing
stage. The practical skill of budgeting has become essential among human beings to maintain
and improve one’s place in society. One of the reasons why students waste their money is
because they do not have the correct priorities in mind. It is an expense many college students
choose not to forego. The ability of budgeting reflects the spending and saving habits of a
person. Where and on what they spend also says a lot about the identity of an individual. In
the US, it is noted that each year, college students pay about $5.5 billion on alcohol, mostly
beer (Collegescholarships.org, 2019). The spending and saving habits of a person also mirror
how financially literate he or she is. This research hypothesizes that there is a significant
relationship between financial literacy and financial behavior of students.
Hypothesis
The following are the hypothesis formulated for this study about the financial literacy
of ABM students in Danlagan National High School.

There is no significant difference in the level of financial literacy of senior high


school students when they grouped according to the following variables:
a. Sex
b. Grade level
c. Family Monthly Income

Statement of the Problem


This study is aimed to know the level of financial literacy of ABM students in
Danlagan National High School.
Specifically, this study will answer the following questions:

1. What is the level of financial literacy of the students as a whole and in the
following areas:

1.1 Spending Habits


1.2 Saving Habits
1.3 Financial Knowledge

2. What is the level of financial literacy of senior high school students in the three
areas when they are grouped according to the following variables?

2.1 Sex
2.2 Grade level
2.3 Family Monthly Income

3. Is there a significant difference in the following areas when the participants are
grouped according to the variables mentioned above?

3.1 Sex
3.2 Grade Level
3.3 Family Monthly Income

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