Chapter II

The following literatures were found to be related and useful in exploring

the concepts of this study.

Needs.

According to Smith (n.d.), needs is a requirement or a necessary duty to

satisfy the basics in life or to live a healthy life, such as food, water,

clothing, housing. According to Marquit (n.d.), needs are the items needed

by people to survive, such as food, water, or shelter, but needs can also

be expanded through utility bills and minimum debt payments. Millennials

consider transportation and food as essentials (Tepper, 2018)

Wants.

According to Marquit (n.d.), wants are the items that you do not need to

survive, things that are nice to have only. There are times when needs

turn into wants which you take your needs beyond basics in life. According

to Jespersen (2017), wants are the expenses that make one live more

comfortably or things that are bought for fun and these are things people

can live without, but people buy them because they enjoy having it.

According to Schalk (2016) based on a study, college students, ages 18-

24, spend 27 billion dollars on non-essential items such as clothes, shoes,

alcohol, and entertainment

Savings.

Savings refers to the money put aside for future use rather than spending

it immediately. Pant (2017) defined savings as the money set aside for a

specific purpose. Pant also said that saving is not the absence of spending

but an intentional act of putting money aside for a specific needs or

purposes. But according to Shaankar (2018), savings consist of the

amount left after a person spends on products and services. For the

people who have a financial problem, savings can be useful at their

problem, for those who tend to rely on credit and loans to make ends

meet, there is no money left for savings. According to Decker (2018),

saving money is really important for students, it’s not just about saving

money to spend their wants but it is for their emergency purposes in the

future. It also benefits them through becoming financially independent;

having emergency money and extra money to go to school activities

(Wright, n.d), and an aid to parents and being able to treat them. Saving

money can be really useful for students.

Budgeting.

According to Peavler (2018), budgeting is the process of preparing the

output of your money that can cover a given time period in the future.

Peavler also mentioned that budgeting can be prepared for a short period

of time. Budgeting can be useful when one wants to spend money but also

want to save more money. Budget is a spending plan, which will put

money in control. It shows how much money one has, where money would

be used for needs. and wants, and when one would be able to reach goals
for savings. According to Buell (2007), he stated that “Budgeting is the

process of setting financial goals, forecasting future financial resources

and needs, monitoring and controlling income and expenditures, and

evaluating progress toward achieving the financial goals”.

According to Kline (n.d.), the benefits of budgeting is that it gives power to

control money; it helps track financial goals or helps a person avoid

spending on unnecessary things that will ruin financial goals. Budgeting

could also help to know exactly where a person’s money comes from,

where it is spent, and how much is earned at the end of each month.

Budgeting would not only help to control or track financial goals, but it

would also help a person organize his or her spending, and this will make

it easier to know where a person has been spending money. Kline (n.d)

also suggested that making a budget template can also help one stay

organized. Budgeting will also help to create an emergency fund and this

will allow a person to be prepared for future expenses. Similarly,

budgeting improves communication with others, debt payments, and

saving money (“10 Benefits of Budgeting Your Money, n.d.).

Budgeting Behavior.

Budgeting behavior of a student is affected by different factors. Each

behavior is different from another. Students have different wants and

needs hence; each have different expenses. This is influenced by their

personal and families’ lifestyle. According to Bona (2018), a person’s

lifestyle affects choices on what items to purchase; consequently, one’s

life style is based on family background. Salikin, Wahab, Masruki, & Nordin

(2012) also agreed that students’ parents affect their behavior.

Unfortunately, students are not aware of the importance of budgeting

(Shaji, Reghunath & Chandradathan, 2016). The same proponents

explained that they have discovered that students have their own savings,

however,they spend more than they save. How a person perceives

budgeting,especially its benefits, molds their financial management.

One factor that affects a budget is a person’s gender.

Sereetrakul,Wongveeravuti, & Likitapiwat (2013) explained that males and

females are raised differently by their parents resulting to different saving

and spending habits. There were studies that suggest women to spend

more than men

(Balhorn, n.d). Women spend more money than men because shopping is

one of the nature of women, unlike men who are very simple when it

comes to clothing, and men usually just buy foods, unlike women that will

buy even the things that they really do not need (Shringi, 2018). Some

reasons why girls are more expensive than boys are: girls needs

accessories like purses, shoes, make up, hair stuff, and there are other

feminine things to pay for, like when their body changes, they start to buy

pads due to menstruation. In addition, boys are not interested in those

things.

Furthermore, Ning (2007) also believes that women spend more money

than men, but both of them spend big money. For example, men usually

spend money for the things that they only need to use, but sometimes
they spend money for buying cars or high-definition television. However,

even though men buy cars, women still spend more money than men

because women often buy stuff that they do not really need or not that

useful because women love shopping. According to Kent (2015), he

believed that when it comes to financing, men are much better than

women because women were too much obsessed in the word “shopping”,

while men did not spend money on useless things, that is why men save a

lot of money than women because they can limit themselves on what they

should buy. Sherry (n.d.) also agrees that girls spends more money than

boys. However, Sereetrakul et al. (2013) stated that Thai male students

range from 13-18 years old spend more

money than female students.

Even though women may seem to spend more than men, according to

Henry, Weber, & Yarbrough (2001) and Stollack, Vandenberg, Steiner, &

Richards (2011), women budget better than men. Stollack, et al. (2016)

also produced a resulted to the same notion that women are much better

budgeters and planners than men.Students’ money usually comes from

allowances given by parents (Villanueva, 2017; Bona, 2018). When

parents give high allowance, tendencies lead to their children also having

high expenses. Similarly, Villanueva (2017) explained the same concept in

her paper stating that

students who have higher allowances has more consuming power.

However,
Wong (2013) disagrees and says people with low income tends to have

less

expenses than high income people (Wong, 2013). Income of a person is a

driving force that affects budget and savings. Percueleza et al. (2016)

explained that with a person’s current income their expenses and savings

may stay the same, increase in expenses then decrease in savings or vice

versa.

Synthesis

When a budget works, it is easier to save since “to budget helps you

save” (Johnson, n.d, para. 6). There are many budgeting techniques that

can make managing money easier, although, not all follows one budget. A

budget differs for every individual since each individual have different

behaviors towards budgeting. A person’s budget is created based on the

one’s considered needs and wants. Other factors like gender and amount

of income also affects a budget.

Based on studies, there are already brackets on what are needs

(essentials) and wants (non-essentials) (Smith, n.d; Marquit, n.d; Tepper,

2018; Jesperson, 2017; & Schalk, 2016). Nevertheless, these are

components that still differs from one person to another. A need of person

A may be a want for person B and vice versa.Most studies stated above

suggested that men save better than women due to the fact that women

tend to spend more money (Kent, 2015).

Compared to men, the expenses of a woman are greater (Ning, 2007;

Shringi, 2018; & Sherry, n.d). On the contrary, there are some researches

that stated women save and budget better than men (Henry et al., 2001;

Stollack et al., 2016; & Sullivan, 2015). Less had been said about men

asgreat budgeters.

Daily allowance affects one’s budget as well. It is a variable that has

become a crucial part of students’ life, since money is their means to

purchase. Lower allowance makes it more difficult for a student to budget

an allowance to satisfy one’s needs and wants and also be able to save

money at the same time (Percueleza, et al., 2016). This statement can be

easily accepted, but there are still studies which stated otherwise Both

men and women especially students should save because it is beneficial

to them. Savings can help students for their future. Having savings can

provide people with (1) financial independence; (2) emergency money;(3)

debt-free living; (4) family bonding; and (5) future earnings. In having

financial savings, budgeting is beneficial to (1) control and organize

income and expenses; (2) focus on financial goals and become aware of

financial status; (3) create emergency funds and pay debt easily; (4)

improve communication with others about finance; and (5) satisfy needs

and wants. In spite of the studies and data collected, there are still gaps

that needed to be filled, since studies were conducted from different

settings and used different variables that could have affected the results

of the research. The researchers sought to explore the budgeting behavior

of Senior High School students and how the profile of the person affects

this.