1

Chapter I

INTRODUCTION

Problem and Its Background

Having good spending habits and financial knowledge is crucial for senior

high students as they start to gain financial independence. Developing a plan and

prioritizing expenses based on needs can help them make their money go further

and achieve their financial goals. This not only impacts their financial well-being

but also their relationships with family, friends, and others they meet. By teaching

them good financial management skills, they can practice and apply these skills

throughout college and beyond. Additionally, monitoring expenses helps them

stay on track with their budget and develop responsible spending behavior

(Bona, 2018).

In United States of America, overspending has become a prevalent issue

among Americans, with many individuals consistently spending more money than

they earn. This behavior often leads t/o financial instability, as individuals

struggle to cover their expenses and end up living paycheck to paycheck.

Breaking free from this cycle of overspending is crucial in order to achieve long-

term financial security and stability (Walrack, 2023).

In Malaysia, lack of financial capability often leads to spending behavior

issues such as indebtedness and overspending. These problems arise when

individuals struggle to manage their finances effectively, resulting in a cycle of

borrowing and overspending. Without the necessary financial skills and

 2

knowledge, many Malaysians find it difficult to maintain a balanced and

responsible approach to their finances (Kumar et al., 2022).

In Philippines, particularly in Tuguegarao, one of the challenges that

students often face is the difficulty in effectively managing their expenses.

Controlling spending becomes a daunting task for them, which can lead to

financial difficulties and potential accumulation of debt. This can be attributed to a

variety of factors such as peer pressure, lack of financial literacy, and limited

income sources. Without proper budgeting and financial discipline, students may

find themselves overspending on non-essential items and struggling to meet their

financial obligations (Abawag et al., 2019).

In Assumption Academy of Compostela, students are unaware of how

they spend their own money every day. They are not financial knowledgeable

making them to spend more to the point that they overspend and sometimes

borrow money from their fellow student. With spending often disconnected from

tangible consequences, students may develop impulsive habits. This study

helped them determine how financial knowledge affected their spending

behavior. Whether they have financial knowledge or not, their spending behavior

change. There is only limited prior research focused on understanding how

students, especially those in senior high, are affected by their spending behavior

through financial knowledge.

Review of Related Literature

 3

In this section, the researchers presented a discussion for related

literature which are relevant to the study. It is presented with the following theme

of Financial Knowledge and Spending Behavior of Senior High Students.

Regarding with its subthemes in Spending Behavior including Loyalty and

Overspending.

Financial Knowledge. Reswari et al. (2018), emphasize that while

possessing financial knowledge is essential, the true value lies in applying this

knowledge to guide financial decisions. The authors stress the importance of

translating financial knowledge into practical behaviors that promote effective

financial management. In summary, understanding financial concepts is merely

the initial stage, and the ability to convert this knowledge into actionable habits is

crucial when it comes to successful financial management.

However, financial knowledge involves having a sufficient understanding

of money to make responsible economic decisions. It is about knowing how to

manage money effectively, make informed financial choices, and navigate the

complexities of the economy. By being financially literate, individuals can take

control of their finances and make decisions that align with their financial goals. It

is an essential skill for navigating the financial world and ensuring long-term

financial stability (Anderson, Conzelmann & Lacy, 2018).

In addition, Garg and Singh (2018) stated the financial knowledge is

essential for effective decision-making about financial situation of someone. It

empowers individuals to make informed choices, guiding them in managing their

 4

finances wisely. This understanding is a fundamental prerequisite for navigating

the complexities of personal finance and ensuring a stable financial future.

On the other hand, knowledge in personal finance is assessed by the

understanding of individuals of various financial concepts. Young individuals

primarily acquire financial insights from schools and parents, with a focus on the

importance of savings. This emphasis on financial education at a young age

underscores the critical role of instilling financial knowledge early in life,

particularly for senior high students, to build a strong foundation for future

financial decision-making (Irianto, 2018).

Besides, young adults often encounter financial issues due to a lack of

knowledge, making poor decisions early in their careers. Similarly, high school

students face financial challenges as they lack understanding when making

crucial decisions about education and careers. Improving financial literacy among

senior high students is crucial for helping them make informed choices and avoid

long-term consequences (Yahaya et al., 2019).

Equally important, financial knowledge encompasses the understanding

and skills necessary for effectively managing personal finances to ensure long-

term financial stability. This includes the ability to make informed decisions about

saving, budgeting, investing, and managing debt. Individuals who possess

financial knowledge are better equipped to navigate the complexities of the

financial system and are more likely to achieve financial security throughout their

lives (Swiecka et al., 2020).

 5

But, for senior high students, acquiring financial knowledge is crucial as it

equips them with the skills needed to make sound financial decisions in their

transition to adulthood. Understanding concepts such as budgeting, saving, and

investing empowers students to navigate personal finances responsibly. This

knowledge becomes a valuable asset as they face decisions about education,

career paths, and managing expenses. Ultimately, instilling financial literacy in

senior high students provides them with a practical foundation for a financially

secure future (Hafni et al., 2020).

Moreover, senior high students gain financial knowledge by developing

skills such as budgeting, choosing investments, and understanding insurance

plans. Mastering these tools prepares them for adult responsibilities like

managing student loans and making informed financial decisions. These skills

establish a foundation for lifelong fiscal responsibility, ensuring a smoother

transition to financial independence (Renaldo, Sudarno, & Hutahuruk, 2020).

Similarly, according to Thavva (2021), financial knowledge refers to the

understanding and capacity to earn, manage, and invest money, as well as the

familiarity with various financial products and the capability to make well-informed

decisions regarding them. This includes the knowledge and skills needed to

effectively handle personal finances and make sound financial choices.

However, according to Jabar and Delayco (2021), financial knowledge

education plays a crucial role in enhancing understanding of financial matters of

consumers. This form of education offers valuable insights into financial rights

and responsibilities, empowering consumers to make informed decisions about

 6

financial products and services. By providing information and guidance, financial

knowledge education can help individuals navigate the complex landscape of

personal finance more effectively.

Besides, according to Cannon (2021), when personal finance education is

tailored to the specific objectives of students, it can enhance their ability to retain

financial knowledge and apply it to make well-informed financial choices. This

suggests that aligning financial education with the individual goals of students

can lead to more effective retention and application of financial knowledge.

However, financial knowledge significantly improves economic

performance and overall well-being, benefitting society. Low financial literacy

often leads to costly transactions and high borrowing fees. Enhanced financial

knowledge reduces fragility, helping individuals, including senior high students,

manage unexpected difficulties. Financially literate individuals are more likely to

seek professional advice and are better equipped to detect financial fraud,

highlighting the importance of early financial education (Aristei & Gallo, 2021).

Despite, senior high students acquire financial knowledge through

schools, seminars, training, and non-formal education. These avenues offer

practical insights into budgeting, investing, and financial planning. By engaging in

such educational opportunities, students equip themselves with the tools

necessary for making informed financial decisions as they enter adulthood

(Nyoto, et.al., 2021).

 7

In contrast, financial knowledge involves a fundamental grasp of financial

concepts, serving as a crucial dimension of financial literacy. In contemporary

contexts, financial knowledge is synonymous with financial literacy, reflecting the

evolving landscape of economic understanding. Mastering these concepts is

pivotal for individuals, particularly senior high students, as it forms the basis for

informed financial decision-making and fosters long-term financial well-being

(Normawati, Rahayu & Worokinasih, 2022).

On the other hand, according to the RBC Wealth Management (2022),

financial knowledge is the understanding of money matters and making wise

choices with our finances. When we are well-informed about money, we are

better prepared to handle both expected and unexpected events in life. Knowing

how to earn, spend, save, and invest money wisely helps us to stay financially

secure and leads to a better quality of life.

In the other word, Schwarz (2022) recommends initiating the introduction

of financial knowledge concepts prior to the enrollment on higher education of

students. This indicates the importance of instilling financial knowledge at an

early stage to better prepare individuals for their future financial responsibilities.

In addition, financial knowledge is about comprehending financial

concepts, such as interest rates, student loans, credit scores, and budgeting. It

involves understanding how these concepts apply to your personal finances and

how they impact your financial well-being. By being financially literate, you can

make informed decisions about your money and take control of your financial

future. It is a vital skill for achieving financial wellness and stability (Wood, 2022).
 8

However, according to Stoll and Kiyosaki (2023), financial knowledge is

the capability to decisively address financial matters to accomplish personal,

family, and community financial objectives. This involves having the confidence

to take effective action with respect to financial decisions, leading to the

achievement of various financial goals.

In an article from Why Financial Literacy Should Be Taught in Schools,

(2023), having a strong grasp of financial knowledge is crucial in making

informed decisions and effectively managing finances. All aspects of life are

impacted by financial matters, making it essential to have a solid understanding

of money management. Without financial literacy, individuals may make ill-

advised spending or investment choices, leading to unsustainable debt and

undesirable economic outcomes. Therefore, instilling financial knowledge is vital

for equipping individuals with the skills to make sound financial decisions.

Moreover, strong financial knowledge is crucial for making informed

decisions and effectively managing finances across all aspects of life. Without a

solid understanding of money management, individuals may make ill-advised

spending or investment choices, leading to unsustainable debt and undesirable

economic outcomes. With robust financial literacy, individuals are equipped with

the skills to make sound financial decisions, allowing them to approach important

life decisions with the necessary data and confidence to make wise choices for

their financial well-being (Financial Knowledge and Decision-Making Skills,

2023).
 9

Nevertheless, financial literacy is crucial for students to develop a strong

understanding of personal finance management, budgeting, and investing. By

gaining financial knowledge early on, students can lay the groundwork for a

healthy relationship with money and set themselves up for future success. It is

important for students to prioritize their education in financial literacy as it will

provide them with the necessary skills and knowledge to navigate the

complexities of their finances throughout their lives (Fernando, 2023).

In other words, understanding how to manage your money, create

budgets, and make wise investment choices is what financial knowledge is all

about. It is a lifelong learning journey, and starting early can set you up for

financial success. Education is the key to money management (Silver 2023).

However, understanding financial terminology, concepts, and definitions is

what financial knowledge is all about. It is about knowing the basics of how

money works, and being able to make informed decisions about your finances.

This knowledge helps you navigate the world of money more effectively (Core

Concept: Financial Knowledge and Access, 2023).

As well, financial knowledge involves understanding and applying different

money skills, like creating a budget, saving money, and managing debt. It also

includes planning for retirement and making smart financial decisions for the

future (Tamplin, 2023).

Similarly, financial literacy refers to having the knowledge and skills to

manage money wisely. It means understanding how to budget, save, invest, and
 10

make smart financial decisions. Essentially, it is about being able to make

informed choices about your finances (Rose, 2023).

However, financial literacy is achieved through financial education. When

individuals are financially literate, they can make smart decisions about their

money that can help improve their overall financial well-being (Goebel, 2023)

In addition, financial literacy is about providing people with the knowledge

and tools they need to take control of their finances and improve their financial

well-being. It is about empowering individuals to make smart choices about

money so they can create a better financial future for themselves (Dale, 2023)

On the other hand, understanding financial knowledge involves grasping

various financial concepts and how they can impact your life. It is about knowing

the meanings of different terms in the financial world and how they can relate to

your personal situation. Taking it a step further, financial wellness involves

applying this knowledge to make positive changes in your behavior and financial

habits (Schuman, 2023).

However, financial literacy involves understanding your own financial

situation and how your choices can affect your financial security. Many people

already have a basic understanding of financial literacy, but it is important to go

further and understand how our actions can impact our long-term financial well-

being. It is about making decisions that will benefit us in the future instead of just

focusing on short-term rewards (Lovett, 2023).

 11

Likewise, understanding financial knowledge means recognizing the value

of learning about money and the economy. It is not just for certain types of

people – it is important for everyone, no matter their background. Financial

knowledge is not just about managing money and putting some aside – it is also

about developing practical life skills that will help us succeed in the future (Goree,

2023).

Besides, financial knowledge is knowing how money works in different

aspects of life. This includes skills like making a budget, investing wisely,

understanding how borrowing money works, and dealing with taxes. When

someone lacks this kind of knowledge, we say they are financially illiterate (CFI

Team, 2023).

Spending Behavior. Spending attitude refers to the students to adopt a

responsible and goal-oriented approach to managing their finances.

Understanding spending behavior is fundamental for students as it shapes their

regular financial choices. Cultivating good spending habits is not only a key factor

in achieving financial success but also a tool to make their money go further and

accomplish their financial goals effectively. Creating a budgetary plan enables

them to prioritize expenses based on their needs, fostering responsible financial

management. Given the newfound financial independence during their college

years, it is crucial to impart these skills, not just for their economic well-being but

also for the impact it has on their relationships. Monitoring expenses ensures

they stay within their budgetary limits, promoting both financial stability and

meaningful connections in their lives (Bona, 2018).

 12

Furthermore, according to Rosli (2019), the spending attitude of students

plays a pivotal role in shaping their financial well-being and long-term financial

stability. The choices they make during their academic years, such as prioritizing

needs over wants, budgeting wisely, and cultivating responsible financial habits,

can significantly influence their future financial health. A prudent spending

attitude can lead to reduced debt burdens post-graduation and pave the way for

a more secure financial future, while a careless approach to spending may lead

to financial stress and hinder their ability to achieve their financial goals and

aspirations. Therefore, nurturing a positive spending attitude among students is

essential for setting the foundation for a successful and financially sound

adulthood.

However, the connection between spending attitudes and overall well-

being is particularly pertinent for students (Brown & Gathergood, 2019). An

increase in spending, especially driven by materialistic attitudes, can

paradoxically lead to a reduction in well-being across various dimensions. For

students, this implies that prioritizing material possessions and indulging in

excessive spending might not necessarily lead to increased happiness or

satisfaction. In fact, fostering a more mindful and balanced spending attitude can

contribute to greater well-being by reducing financial stress and promoting

financial security. Therefore, understanding the potential negative consequences

of materialistic spending attitudes and encouraging students to adopt a more

holistic approach to their finances can be pivotal in enhancing their overall well-

being during their academic journey and beyond.

 13

In addition, money attitude has emerged as a crucial factor influencing the

financial well-being of individuals, particularly among students. The way students

perceive and approach money matters, including their spending attitude, can

significantly impact their financial health. A positive money attitude characterized

by financial responsibility, prudent budgeting, and mindful spending can lead to

better financial outcomes, while a negative or careless attitude towards money

may result in financial challenges and increased debt. Recognizing the

importance of cultivating a healthy money attitude is particularly relevant for

students, as it can set the stage for their future financial stability and success.

Therefore, addressing and improving the spending attitude of students should be

a priority in efforts to enhance their overall financial health (Sabri et al., 2022).

In addition, without a grasp of their spending tendencies, students are

likely to continue with their existing financial habits. They buy those things

because that is what the students are doing every day. It assists in establishing

clear financial goals and sheds light on potential pitfalls, challenges, and

vulnerabilities that might be lurking in their spending attitude, a valuable insight

for students aiming to enhance their financial decision-making (Cara, 2022).

Loyalty. Customer loyalty refers to when customers continue to support

the product of services of a company, even when other companies try to get

them to switch. This means that loyal customers keep spending their money with

the same company instead of going to competitors (Bilgin et al., 2018).

Similarly, another significant influencing component of customer loyalty

that establishes a long-term relationship with the firm is satisfaction. Consumer

 14

satisfaction varies according to the needs of the consumer. Price, value, and

availability in accordance with customer expectations all have an impact on

creating satisfaction. Customer loyalty to products or services is always

determined by continued satisfaction, and it is less expensive to make satisfied

consumers happy than to acquire a new customer (Ranabhat, 2018).

As well, when customers keep coming back to buy from a company, it

helps the company make more money and attract new customers. This is

because loyal customers contribute to the success of the company by making

more purchases (Agarwal & Mehrotra, 2018).

However, the perception of increased value in loyalty programs has drawn

more interest from customers, leading to a higher likelihood of them wanting to

become a part of these programs. This is due to the attractive benefits and

rewards that are offered through these programs, spurring more people to

consider joining (Naylor, 2018).

Moreover, marketers are prioritizing customer loyalty programs to build

strong relationships, a strategy relevant in education. For students, loyalty

extends beyond academics to the overall experience, and effective programs can

enhance retention. By focusing on relationships, educational institutions may

positively influence student spending behaviors, encouraging investment in

additional services and contributing to long-term success (Khalil et al., 2018).

In other words, past research has indicated that just being part of a loyalty

program does not automatically make customers more loyal. To improve the
 15

effectiveness of loyalty programs, businesses should understand what customers

value and continuously monitor, assess, and update their programs. Ultimately,

the success of a business depends on how well its loyalty program drives

customer loyalty (Yang et al., 2018).

Despites, student loyalty, as defined by Waari et al. (2018), goes beyond

mere satisfaction, representing a lasting fondness and connection with a product.

This emotional bond translates into repeat purchases and positive word-of-

mouth, bolstering the reputation of the brand. In terms of spending behavior,

strong customer loyalty not only encourages repeat business but also fosters a

willingness to invest in higher-value offerings, ultimately contributing to the

overall growth and success of the business.

But, earning and using rewards from loyalty programs can be exciting and

provide enjoyable benefits for customers. These rewards can motivate customers

to keep spending and coming back to the business (Montoya & Flores, 2019).

Equally important, a loyalty program that offers attractive benefits can

encourage customers to keep coming back and spending more. This can

increase the perceived value of the business among customers. As a result,

more people may be inclined to join the program, leading to higher customer

retention and spending (Gandomi et al., 2019).

In addition, loyalty programs are more important now because there are

so many options for customers to choose from, and businesses need to keep

customers coming back to make more money. Loyalty programs help with that
 16

because they make customers want to stay with a business (Chaudhuri et al.,

2019).

Furthermore, brand loyalty is a consumer behavior pattern in which

consumers get committed to specific brands and purchase the same products

again over time. Loyal clients used to buy products from their favorite companies

on a regular basis, regardless of convenience or price (Jain & Tyagi, 2019).

Brand loyalty focuses on multiple digital touch points through which

business authorities will have a clear understanding of consumer purchasing

patterns via smartphones, apps, blogs, web search utility, and other critical

elements of the digital landscape for clients who are digitally connected to the

brand and products through numerous digital platforms and e-commerce portals

(Gogineni, 2019).

Besides, customer satisfaction is measured by the product and quality

development of the company, as well as service and improvement to fulfill

consumer expectations. Customer satisfaction can be measured in a variety of

ways (Khairawati, 2019).

Similarly, in the study by Menidjel et al. (2020), they explain that when

customers have positive feelings about their experience with a company, it

strongly affects their satisfaction and their likelihood to recommend the company

to others. This means that when customers have a good time shopping, they are

more likely to stay loyal and tell others about their positive experience.
 17

In other words, loyalty results from the desire of a consumer to continue

using the goods or services we provide. And getting loyal clients is a lengthy

process that needs time and effort. Customers are said to be loyal if they are

accustomed to purchasing goods or products offered by business actors or

companies. Habits are developed when customers make repeated purchases

within a specific length of time, however if the buyer does not purchase goods or

items within a certain period of time, that person is not a customer but merely a

buyer or consumer (Widodo, 2021).

However, although it is difficult to specify a specific reason why

consumers become brand loyal, they contend that the demand of the consumer

may be tied to reaching psychological fulfillment, with brands influencing repeat

purchase behavior of customer through incentives (Bonagas & Vu, 2022).

The firm will not exist unless you have pleased clients who continue to buy

from you. New consumers are more expensive to recruit and spend less money

than loyal, repeat customers. It is vital for business success to keep customers

coming back for more. That is why short-term profit grabs fail. Loyal clients are

just better for business: they help you expand and maintain high earnings

(Chambers, 2022).

In contrast, as loyalty programs gain global importance, particularly in

education, their relevance extends to students. The emphasis on creating

emotional connections aligns with efforts to foster genuine loyalty among

students, recognizing that retaining loyal students is economically advantageous

compared to acquiring new ones. In the academic context, enhancing student

 18

loyalty may influence spending behavior, with loyal students more likely to invest

in additional educational services, contributing positively to the success of the

institution through recommendations (Naula, 2022).

Besides, a loyalty program encourages people to buy products from,

interact with, or use the services of a particular business. Customers are

recognized and rewarded across many channels depending on their purchases

or other interactions with your company. Interacting with you is far more crucial to

these clients than any single transaction. A loyalty program focuses on long-term

objectives such as building a team of advocates and increasing the number of

monthly recommendations (McKinsey, 2022).

In addition, brand loyalty assumes a vital part in the progress of

organizations across different enterprises. Yet, the elements of purchaser

conduct are continually developing, and ongoing patterns show a huge change in

how buyers approach their buying choices (Wood, 2023).

However, customer loyalty in the context of service marketing is when

customers want to stick with a particular business and tell others about it. This

means that they are willing to keep spending their money with that company and

also recommend it to their friends and family (Hidayat et al., 2023).

Overspending. According to Bona (2018), when we keep an eye on our

money, it helps us avoid spending too much, making hasty purchases, and

paying more than we should for things. The way students spend money can have

different impacts on their lives, including how they get along with family, friends,
 19

and others they meet. Overspending can affect not only our finances but also our

relationships and general well-being.

However, it is widely believed that the reason for their declaration of

bankruptcy was due to their lack of proper financial planning and potential

overspending. It is possible that their failure to effectively manage their finances,

including not setting up a budget and monitoring their spending, resulted in their

financial downfall. Additionally, their lack of understanding of basic financial

concepts may have also contributed to their financial difficulties, leading to

insurmountable debt and ultimately having to file for bankruptcy. Therefore, it is

crucial for individuals to prioritize financial literacy and develop a better

understanding of managing their money to avoid similar hardships (Gazi, 2018).

It is crucial to maintain effective control over our expenditure habits.

Without such control, there is a risk of overspending or mishandling finances,

which can hinder our ability to make prudent decisions regarding financial

allocation. (Rahman & Gan, 2020).

Similarly, the bankruptcy cases are increasing, especially among young

people, as many lack basic financial knowledge. It is important for young people

to learn how to manage money wisely from an early age to avoid making poor

financial decisions. People who do not understand how to handle money tend to

overspend, which can lead to financial difficulties. The Covid-19 pandemic has

made the situation even more challenging for Malaysians, impacting their ability

to handle money wisely (Mohamad, 2020).

 20

Compulsive buying and overspending are alike in how people act, but

different experts see them in different ways. Psychiatrists study compulsive

buying as a repeating and troublesome behavior for a person. This is similar to

how overspending is looked at, especially when thinking about students who

might spend too much money (Vastag & Balassa, 2020).

On other hand, someone with low financial literacy often struggles with

money issues, such as having a lot of debt that they cannot pay off and not being

able to save for the future. They may also have trouble making good choices

about spending and may make impulsive purchases that they cannot really

afford. Learning more about how to manage money can help people avoid these

problems and make smarter decisions about spending (Hamid & Loke, 2021).

However, lack of financial knowledge can lead to poor financial decisions,

such as overspending and taking on debt. Automated online shopping and digital

payment methods can make it even easier to make impulsive purchases. This

can create financial difficulties and hinder financial responsibility (Yin et al.,

2022).

On the other hand, spending too much money will always hurt your

budget. Financial experts say it is important to avoid spending more than you can

afford and taking on expensive debts to have a good financial life. This advice is

especially relevant for students who should be careful not to overspend (Nair,

2022).
 21

Likewise, spending too much money is a tricky and common issue that

many people face, even if they do not notice it. Luckily, there are reliable ways to

prevent the problem of spending more than you possess. This is important

advice for students who need to be cautious about overspending (Spangenberg,

2022).

Moreover, many young people face money problems because they spend

too much and borrow too much money. Young people often have more debts that

are not backed by collateral, making them more at risk when things like losing a

job or higher interest rates happen. This happens a lot with students who spend

too much money (Achtziger, 2022).

However, not knowing about personal finances is tied to overspending,

excessive credit card uses, growing debt, and playing many lotteries. Without

financial literacy, people may make risky choices, spending more than they

should and accumulating debts. Learning about finances is vital to avoid these

problems and make smarter money decisions (Plooy, 2022).

In other words, if you are bad at handling money, you might spend too

much and end up owing a lot of money. This can be really stressful and can even

make you sick. So, it is important to learn how to manage your money to avoid

these problems (Remdzan et al., 2023).

Simply focusing on the money aspect of overspending is not enough. To

really make a difference, we need to understand the deeper reasons behind why

we spend the way we do. By diving into our feelings and thoughts about money
 22

and spending, we can make lasting changes in how we manage our finances

(Hathai, 2023).

However, getting a grip on spending and staying within a budget starts

with understanding how our feelings and thoughts influence our money

decisions. Recognizing these patterns can help us change our mindset to

prioritize financial security and long-term goals. This self-awareness can be a

powerful tool in curbing excessive spending habits (Delker, 2023).

Despites, many young people are tempted to spend money on

unnecessary items due to societal pressure and a lack of understanding about

the importance of smart financial choices. This often leads to overspending and

financial struggles. Limited access to resources that teach financial management

skills also contributes to this issue (Wutun, Niha & Manafe, 2023).

In contrast, negative financial behaviors such as overspending and

borrowing too much money can lead to long-term financial problems. These can

include not having enough money for emergencies or retirement and making

quick decisions about investing. This behavior can make it hard to feel secure

and stable when it comes to money (Rahardjo, Jessica & Christa, 2023).

As well, having the right attitudes and beliefs forms the basis for effective

money management skills. These skills are crucial for adults to steer clear of

overspending and unnecessary borrowing. By cultivating positive financial habits,

individuals can avoid the pitfalls associated with spending behavior and ensure a

more responsible approach to handling money (Cipriano et al., 2023).

 23

However, shopping is a normal part of life, but it is easy to do too much for

various reasons like the convenience of tapping and swiping. Bright and tempting

things on social media can make it hard to resist spending. When students spend

too much and too often, it can lead to problems (Schwartz, 2023).

On the other hand, spending too much can really hurt your money

situation. It may bring on a lot of debt, stress about money, and a constant

struggle to make enough money. When you keep spending more than you make,

it is hard to save for the future or buy things that can make your money grow.

Students who overspend may find it tough to handle unexpected costs, which

can make them feel not secure with their money. Also, it can make relationships

hard and cause emotional problems because always worrying about money is

not good for your overall well-being (Reynolds, 2023).

Related Studies

The findings of Wiharno (2018) indicated that the variables of financial

knowledge, financial behavior, and financial attitude exert a partially significant

positive influence on personal financial management. This implies that a partial

enhancement in these variables—financial knowledge, financial behavior, and

financial attitude—will result in an increase in the personal financial management

variable.

However, the research unveils a widespread issue of low financial literacy

among youth globally, raising concerns. Furthermore, the study notes that

several socio-economic and demographic factors, including age, gender, income,

 24

marital status, and educational attainment, play a role in influencing the financial

literacy levels of youth. Additionally, the research highlights an interconnection

between financial knowledge, financial attitude, and financial behavior (Garg

& Singh, 2018).

On the other hand, the findings of Rasyid et al. (2018) suggest that: 1)

locus of control significantly influences investment decisions; 2) financial

knowledge has a notable impact on investment choices; and 3) income plays a

significant role in investment decisions. Among the three variables examined,

financial knowledge emerges as the most influential in shaping investment

decisions.

Otherwise, the research of Saurabh and Nandan (2018) revealed positive

links between financial knowledge and satisfaction, mediated by financial risk

attitude. It also found similar positive connections between financial socialization

and satisfaction, with financial risk attitude as the mediator in both cases. The

study emphasizes the mediating influence of financial risk attitude in the

relationships between financial knowledge, financial socialization, and financial

satisfaction.

In the study of Yahaya et al. (2019), the results indicate that the

participants possess a moderate degree of financial understanding. Those who

underwent a Financial Management course demonstrated a superior level of

financial knowledge in contrast to those who did not partake in such a course.

Notably, financial knowledge exerted a noteworthy impact on financial attitudes,

and these attitudes, in turn, significantly affected financial behavior. However, it is

 25

noteworthy that financial knowledge itself did not exhibit a significant influence on

financial behavior.

Nevertheless, post-estimation analysis indicated that elevated scores in

comprehensive objective financial knowledge were, in part, influenced by

superior scores among male individuals. Participants in financial education

exhibited increased subjective knowledge and financial self-efficacy scores,

irrespective of gender and age (Rothwell & Wu, 2019).

In addition, the study of Cherotich, Ayuya and Sibiko (2019) demonstrates

that elevated financial knowledge significantly enhances the performance of

women-owned farm enterprises. More precisely, individuals with greater levels of

financial knowledge are correlated with increased savings and higher margins for

their enterprises.

In contrast, the analysis presented in the study provides evidence of

causal links between financial knowledge and financial behavior, employing a

novel instrument derived from the newspaper reading habits of respondents. The

study affirms the likelihood of a negative selection bias, indicating a potential

underestimation of the causal impact of knowledge on behavior in a conventional

regression framework. The research includes mediation analyses, revealing that

approximately 13% of the causal effect of knowledge on behavior is mediated

through financial attitude (Fessler, Silgoner & Weber, 2019).

However, results indicate positive links between education, asset balance,

and use of financial information according to the study of Kadoya and Khan
 26

(2020). Financial trouble is associated with lower knowledge, less favorable

attitude, and irresponsible behavior. Males are more knowledgeable, while

females show more positive behavior and attitudes. Age is linked to knowledge

positively but to attitude negatively, suggesting middle-aged individuals in Japan

are more knowledgeable, while younger and older individuals are more positive

in behavior and attitude.

But, the outcomes from ordinary least squares (OLS) regressions indicate

that gender does not emerge as a significant predictor across three financial

capability scales. Decomposition analysis reveals that the majority of the

observed gender gap in financial literacy can be attributed to differences in

individual characteristics (endowments), especially when psychological traits are

incorporated into the model (Robson & Peetz, 2020).

The results of the study of Johan, Rowlingson and Appleyard (2020)

reveal that, after accounting for other variables, the personal finance course had

a positive and statistically significant influence on financial knowledge. However,

there was no statistically significant effect of the course on financial attitudes or

behavior. The study indicates that family financial socialization played a crucial

role in shaping financial knowledge, attitudes, and behavior. Additionally, income,

work experience, year/field of study, and discussions about money with friends

emerged as significant drivers of financial behavior.

Moreover, the findings of Dewi et al. (2020), revealed that a significant

proportion of respondents were classified as "fair" in terms of financial attitude,

financial skills, and financial behavior. The study also highlighted notable
 27

connections not only between financial attitude and financial management

behavior but also between financial skills and financial management behavior.

On the other hand, according to the result of the study of Cruijsen, Haan

and Roerink (2021), individuals with higher financial knowledge are inclined to

place greater trust in financial institution managers and exhibit increased

confidence in the prudential supervisory authority. Ultimately, the findings

indicate a positive correlation between trust in the supervisory authority and trust

in the financial sector.

In the study of Kaiser et al. (2021), the findings indicate that, on average,

financial education initiatives result in positive causal impacts on both financial

knowledge and subsequent financial behaviors. The effects of these programs

are of significant economic relevance, comparable to the outcomes observed in

educational interventions across various fields, and remain robust even when

accounting for potential publication bias in the existing literature. Additionally, we

explore the cost-effectiveness of interventions aimed at financial education.

On the other hand, in the study of Normawati, Rahayu and Worokinasih

(2021), ultimate model, it was revealed that financial knowledge, digital financial

knowledge, and financial attitudes have a positive impact on financial behavior.

Additionally, financial behavior plays a significant moderating role in the

correlation between financial knowledge, digital financial knowledge, financial

attitude, and financial satisfaction.

 28

The findings of Iramani and Lutfi (2021), indicates that financial

experience, financial knowledge, financial status, and marital status exert a direct

impact on financial well-being. Additionally, financial behavior serves as a

significant mediator in the relationship between financial experience, financial

knowledge, locus of control, and financial well-being.

Similarly, the findings indicated a noteworthy impact of Financial

Knowledge on both Financial Behavior and Financial Satisfaction. Enhancing

Financial Knowledge is crucial, as it directly and indirectly influences Financial

Satisfaction. There is a recognized need for improvement in Financial

Knowledge. The suggestion is made that the Central Bank could supply financial

knowledge resources to educators teaching specific subjects, allowing for the

dissemination of this knowledge to students (Panjaitan, Renaldo & Suyono,

2022).

The findings of Shanmugan et al. (2022) suggest that there is a positive

correlation between information access and subjective financial knowledge with

information behavior, information behavior shows a positive association with risk

propensity, sustainable investments are positively linked to risk propensity and

cognitive biases, and risk propensity acts as a mediator in the relationship

between information behavior and sustainable investments.

Furthermore, the research of found a positive correlation between financial

knowledge and financial well-being, highlighting its crucial role as a moderator in

the relationship between myopia and financial well-being. When accounting for

both the direct impact of financial knowledge and its interactive effects, it became
 29

evident that financial knowledge might enhance the financial well-being of

individuals with myopic discounting tendencies at a considerably lower rate

compared to those without such tendencies (Lee, Kim & Hanna, 2023).

Theoretical Framework

According to the theory of Planned Behavior by Ajzen (1985), behaviors

are influenced by intentions, which are determined by three factors: attitudes,

subjective norms, and perceived behavioral control. It is also possible for external

factors to directly force or prevent behaviors, regardless of the intention,

depending on the degree to which a behavior is actually controlled by the

individual, and the degree to which perceived behavioral control is an accurate

measure of actual behavioral control.

The theory posits that attitudes significantly impact intentions and

subsequent behavior. In this context, a study could evaluate the attitudes of

senior high students toward financial knowledge and responsible spending. For

instance, it may determine whether students perceive financial knowledge as

valuable or if they have a positive outlook on saving money. Subjective norms,

encompassing social influences on behavior, could be investigated. The research

determined into the impact of parents, peers, or teachers on spending behavior

of senior high students. For example, it could analyze whether the spending

habits of students are influenced by the attitudes and behaviors of their friends

regarding money. Emphasizing the importance of perceived behavioral control in

predicting behavior, the study assessed how much control senior high students

feel they have over their spending. It determined whether students believe they
 30

possess the necessary financial knowledge and skills for informed spending

decisions. Utilizing the Planned Behavior theory, the research offered insights

into the factors determining the financial knowledge and spending behavior of

senior high students, potentially guiding interventions or strategies to foster

responsible financial habits in this demographic.

Independent Variable Dependent Variable

Financial Knowledge Spending Behavior

Loyalty

Overspending
 31

Figure 1: Research Paradigm

Conceptual Framework

In this study, the independent variable is Financial Knowledge, and the

dependent variable is Spending Behavior.

Financial knowledge for senior high students revolves around the idea of

equipping them with the necessary financial skills and understanding to make

informed decisions about their personal finances, as well as preparing them for

future financial responsibilities. Financial knowledge at this level typically covers

a range of topics such as budgeting, managing income and expenses,

understanding banking services, dealing with debt, saving and investing, and

other fundamental financial concepts. The goal is to determine that students

have a solid foundation in financial knowledge and can confidently manage their

finances as they transform to adulthood. This knowledge is essential for their

long-term financial well-being and can have a significant impact on their future

financial success.
 32

Spending behavior with overspending and loyalty as indicators for senior

high students involves understanding how young individuals manage their

spending habits and the influence of consumer loyalty on those habits.

Overspending refers to the tendency to spend more money than one can afford,

often leading to financial instability and debt, while loyalty relates to the

inclination of consumers to stick with a particular brand or company due to

various factors such as trust, habit, or perceived value. By determining the

spending behavior of senior high students in terms of overspending and loyalty to

certain brands or products, educators and researchers gained valuable insights

into the financial decision-making processes of young consumers. This

understanding used to develop financial knowledge programs that focus on

responsible spending, avoiding overspending, and making informed purchasing

decisions, and promoting healthy financial habits and behaviors among young

individuals as they transform into adulthood and take on increased financial

responsibilities.

Statement of the Problem

The study aimed to determine the relationship between spending attitude

and financial management of the senior high students.

1. What is the level Financial Knowledge?

2. What is the level of Spending Behavior in terms of:

2.2 loyalty; and

2.3 overspending?
 33

3. Is there a significant relationship between financial knowledge and

spending behavior of senior high students?

Hypothesis

H1: There is a significant relationship between financial knowledge and

spending behavior of the senior high students.

Scope and Delimitation

This study aimed to determine the relationship between spending attitude

and financial management of the senior high students at Assumption Academy of

Compostela. It covered the academic year 2023-2024. The research employed a

quantitative approach through correlational studies. It included the collection of

data through a random sampling method using structured questionnaires to gain

quantitative insights into these financial aspects among the targeted student

population. This study is done in two weeks. To ensure the feasibility of the

researcher and relevance, certain boundaries and limitations is adhered to. The

study only focused on 100 senior high students and did not include the lower

grade levels. It only got the senior high students from Assumption Academy of

Compostela and did not include the other schools or institutions within the

community. The study did not delve into the financial group such as adults or

working professionals. It did not cover the impact of the external factors such as

economic conditions or family background on the financial knowledge and

spending behavior of senior high students.

Significance of the Study

 34

Senior High School Students. This study provides senior high schools

students understanding about how financial knowledge impacted spending

behavior, helping students make informed decisions, avoid debt, and plan for

their future financial well-being.

Parents. This study helps parents to support and guide their children in

developing responsible spending habits, fostering financial literacy from an early

age.

Teachers. This study is helpful for educators to tailor curriculum and

teaching methods to enhance financial education, preparing students for real-

world financial challenges.

School Administrators. This study helps in designing programs that

promote financial literacy within the school system, fostering a financially capable

student body.

Policymakers. This study provides understanding about the relationship

aids in crafting policies aimed at integrating financial education into the

curriculum, contributing to a financially literate society.

Future Researchers. This study provides a foundation for further

research, allowing for the development of more effective strategies to improve

financial literacy among students.

Definition of Terms
 35

Financial knowledge. Refers to the understanding of students in financial

concepts such as how to spend and manage their money while in school. This

could include knowledge of how to manage personal finances, make good

financial decisions, and understand financial products such as loans, credit, and

banking.

Spending behavior. Refers to the act of students using their own money

to purchase their wants or to pay for important expenses at school. It

encompasses the patterns and choices people make when deciding how to use

their financial resources.

Loyalty. Refers to students being committed to a specific brand or product

that they want to spend their money on at school. It reflects consumer

preferences, habits, and the value they place on the relationship with a particular

brand or product.

Overspending. Refers to when students spend too much on things, they

see around school without considering their financial situation. It often involves

making purchases that exceed the income of each one or budget, leading to

financial strain and potential economic hardship.

 36

Chapter II

METHODOLOGY

This chapter explains the various methodologies used in gathering data

and conducting analysis that is relevant to this study. The methodologies will

include the location of the study, the research design, the types of data, the

methods of data analysis, the data collection methods and their management,

and the type of respondents.

Research Design
 37

This study employed a quantitative correlational research design. This

study aimed to determine the relationship between spending attitude and

financial management of the senior high students. According to Bhandari (2023),

a correlational research design looks into relationships between variables without

allowing the researcher to control or manipulate any of them. This research used

quantitative correlational research design to determine if there is a relationship

between the financial knowledge of students and their spending behavior. By

doing so, a random sampling technique is used with a total of 100 students

participated in the study and answered the adapted research questionnaire

focusing on the theme of Financial Knowledge and Its relationship to the

Spending Behavior of Senior High Students. In research questionnaires, each

item rated on a 5-point likert scale.

Research Locale

The research took place at Assumption Academy of Compostela (AAC) on

Jose P. Laurel Street, Poblacion, Compostela, Compostela Valley Province.

AAC, a secondary Catholic school, was founded by Fr. Frank Taney, a Maryknoll

Missionary, with the support of Bishop Joseph W. Reagan and the Assumption

Sisters. The institution held its inaugural graduation in the 1964-1965 school

year, witnessing both academic and physical development over the years. Sr.

Ramona E. Bastasa, f.m.a., serves as the directress/principal, and Rafael

Campos Balleser is the Senior High Academic Coordinator at AAC. This

institution offers a grade 11 and grade 12 level of education in senior high school

which corresponds to the needed participant category for this study. It offers
 38

three strands for senior high school, which are the Accountancy, Business, and

Management (ABM), Humanities and Social Sciences (HUMSS), and Science,

Technology, Engineering, Mathematics (STEM) that fit the category of

participants needed for this study. The population of this institution is more than

900 both pupils and students.

 39

Figure 2: Location Map of Poblacion Compostela Highlighting

Assumption Academy of Compostela
 40

Research Respondents

The respondents for this study were Senior High School students from

Assumption Academy of Compostela, Inc., selected through random sampling to

ensure equal opportunities for every individual. As emphasized by Acharya

(2013), this method is crucial for creating a representative sample that accurately

reflects the characteristics and diversity of the entire population. A total of 100

students participated in the survey, with 50 respondents from each grade level.

The selection of Senior High School students is strategic, considering that they

are directly affected by the factors under investigation and possess the

necessary knowledge to address the research problem. In addition to examining

spending attitudes, the study aims to shed light on how senior high school

students manage their financial status and their behavior in spending money.

Research Instrument

In this research study, the researchers utilized an adapted research

questionnaire focusing on the theme of Financial Knowledge and Its relationship

to the Spending Behavior of Senior High Students. The questionnaire included

subthemes such as Loyalty and Overspending, with each item rated on a 5-point

Likert scale as follows: (5) Very Often, (4) Often, (3) Sometimes, (2) Rarely, (1)

Never.

The research questionnaires for Financial Knowledge were adapted from

the study of Panjaitan et al. (2022), incorporating a selection of 5 items rated

 41

from 1 to 5. Additionally, another adapted questionnaire from Marasigan et al.

(2022) was employed for indicators related to Loyalty and Overspending.

Table 1. Scale of Financial Knowledge

Range Description Level Interpretation

4.20-5.0 Very High (Very This means that financial knowledge is

Often) always manifested.

3.40-4.19 High (Often) This means that financial knowledge is

manifested.

2.60-3.39 Average (Sometimes) This means that financial knowledge is

occasionally manifested.

1.80-2.59 Low (Rarely) This means that financial knowledge is

rarely manifested.

1.0-1.79 Very Low (Never) This means that financial knowledge is

never manifested.

Table 2. Scale of Spending Behavior

Range Description Level Interpretation

4.20-5.0 Very High (Very This means the spending behavior are

Often) always manifested.

3.40-4.19 High (Often) This means the spending behavior is

manifested.
 42

2.60-3.39 Average This means the spending behavior is

(Sometimes) occasionally manifested.

1.80-2.59 Low (Rarely) This means the spending behavior is rarely

manifested.

1.0-1.79 Very Low (Never) This means the spending behavior is never

manifested.

Data Gathering Procedure

The researchers observed the following steps before, during, and after the

implementation of the study.

Before Implementation. The researchers initiated this study by first

identifying the indicators for the variable spending behavior of senior high

students. To properly conduct the study, the researchers prepared a letter of

approval addressed to the school principal, requesting permission to conduct the

study within the school premises. The letter outlined how the researchers

planned to conduct their study face-to-face, specified the location for data

collection, and mentioned the exact number of students involved.

During Implementation. After having the authority to make research in

senior high school department, the researcher then proceeded to each strand.

The researchers personally approached the senior high school students to

answer the questionnaire. The researchers gave the questionnaire to the

respondents on each strand and on each grade level if they agree to answer it.
 43

The researchers provided personal instructions to the respondents, urging them

to answer the questionnaire honestly and with their hearts. With forms outlining

the goals of the study, how the data of participants will be used, and their rights

as participants were given to them as part of the informed consent process, they

were asked before participating. Throughout the questionnaire completion

process, the researchers were present to assist respondents with any questions

they found difficult to understand. The researchers also monitored the

respondents to ensure that they answered their respective questionnaires.

After Implementation. Once the data was collected, the diligent and

hardworking researchers expressed sincere gratitude towards the willing and

cooperative respondents for their invaluable collaboration in contributing to the

research. To uphold the utmost level of confidentiality and privacy, the dedicated

researchers assured the participants that their answers would remain strictly

confidential, with the information being utilized solely for research purposes.

Ensuring the integrity of the data, the researchers meticulously gathered all the

completed questionnaires provided by the respondents, leaving no stone

unturned in their efforts. With great care, they embarked on an extensive analysis

of the gathered information, refraining from introducing any additions or

deletions, thereby preserving the authenticity and accuracy of the data.

Employing the rigorous and widely accepted Pearson Correlation formula, the

researchers effectively utilized statistical techniques to extract insightful and

meaningful results from the collected data.

 44

Statistical Treatment of Data

Responses to the questionnaire by the Senior High Students of

Assumption Academy of Compostela was statistically analyze with the data

requirements of the study. Descriptive statistics such as frequency count mean,

percent and rank are considered. To know if there is a correlation between the

independent and dependent variables Pearson Correlation was applied to

determine the strength of the linear relationship between two variables

specifically to the spending attitude and financial management of students in

Assumption Academy of Compostela, Inc.

Pearson Correlation

The range of the linear Correlation Coefficient is from -1 to +1. If there is a

strong positive linear relationship between the variables, the value of r will be

close two +1. If there is a strong negative linear relationship between the

variables, the value of r will be close to -1. When there is no linear relationship

between the variables or only a weak relationship, the value of r will be close to

0.

Mean - This was used to determine the level of performance of the samples.

Formula: µ =∑X

Where µ= the population mean

 45

X= given values/data

N= total number of values

Pearson R – this will be used to measure the strength between two variables.

݊ሺᎂ‫ݔ ݕ‬ሻ െሺᎂ‫ݔ‬ሻሺᎂ‫ݕ‬ሻ

‫ ݎ‬ൌ
݊ ȭ‫ ݔ‬ଶ െ ȭ‫ݔ‬ ଶ ሾ݊ ȭ‫ ݕ‬ଶ െ ȭ‫ݕ‬ ଶ ሿ

Where:

X= values for independent variable

Y= values for dependent variable

n= total number of values

∑xy= summation of the product of the two variables

∑x = summation of the independent variable

∑y = summation of the dependent variable

Trustworthiness

As researchers do not employ instruments with established validity and

reliability measures, it is important to consider how the researchers made the

research findings credible, transferrable, confirmable, and trustworthy.

 46

Credibility. Credibility refers to the degree to which a research report is

plausible and acceptable, with special reference to the level of agreement

between participants and the researcher (Mills et al., 2010). To assure the

credibility of the data, the researchers formulated research questions that gave

them the data they needed while avoiding questions that could offend the

participants. The words that have been utilized have been carefully chosen, and

the tone is appropriate. The researchers will also try to rephrase some phrases to

make them more comprehensible for the participants.

Confirmability. Confirmability relates to the extent to which the outcomes

could be confirmed or corroborated by others (Trochim, 2020). To ensure

confirmability, the researchers will gather data based on the responses of the

participants and not on any potential bias or motivations of the researchers. After

the transcription of the data, the researchers will present it to the participants to

make sure that what they recorded is consistent with what the participants

answered.

Transferability. Transferability refers to the extent to which qualitative

research findings can be extended or applied to different contexts or settings.

(Trochim, 2020). To address transferability, the researchers presented the results

to the school and the senior high school faculty. The goal of the researchers was

to generate outcomes that would be beneficial for the participants. The

researchers believed that the experiences of the participants at Assumption

 47

Academy of Compostela encouraged the school faculty and teachers to work

efficiently for the academically successful students.

Dependability. Dependability emphasizes the need for the researcher to

take into account the ever-changing context in which research takes place. The

research is in charge of detailing the changes that occur in the setting and how

these changes influenced the methodology of study (Trochim, 2020). In order to

ensure dependability, the researchers supported the outcome of the study with

literature. This was to prove that the phenomenon being investigated also existed

in other places.

Ethical Considerations

The researchers wrote letters of approval to the faculty of the said school

and to the adviser and/or teachers of the senior high school 12 students. The

letters specified the location, the exact dates, and the number of days that the

researchers used in the study. After the letters are approved, the researchers will

approach the respondents face-to-face. Before the interview, the researchers

tried to establish rapport with the participants. This was to make the interview

more effective. When everything was set, the participants were asked to sign a

letter confirming their consent to the activity. The letter of consent contained

specifics concerning the confidentiality and anonymity of the participants in the

production of the study. It was also very clear in the informed consent that

participants could stop the interview at any time if they felt uncomfortable with the

question. Codes were used in place of the actual names of the participants to
 48

ensure confidentiality. During the interview, the researchers used the local

language of the location where the participants were residing. The interviewers

were mindful of the personal information and privacy of the participants. It was

also closed to the public to ensure the privacy of the information and the

particular data gathered from the interview were kept safely. The researchers

made sure that the study was driven by ethical concepts such as respect for

people, beneficence, fairness, consent, and secrecy, as outlined by Mack et al.

(2005).
 49

Chapter III

PRESENTATION, ANALYSIS, AND INTERPRETATION OF DATA

This chapter presents and elaborates on data gathered from various

Senior High Students of Assumption Academy of Compostela. This comprises

data analysis, interpretation, and research conclusions based on the problems

and hypothesis established in the first chapter. The presentation and discussion

of the data and results are organized in accordance with the problem sequence.

The level of financial knowledge is presented below:

Statement Weighted Description

Mean Level
I understand financial concepts such as money 4.14 High
management, investment and budgeting.
I understand interest rates, financial costs, and 3.65 High
credit terms.
I understand investment returns and risks. 3.63 High
I understand how to minimize risk in 3.45 High
investments.
Purchasing power decreases when inflation 3.71 High
increases.
Grand Weighted Mean 3.72 High
Table 1. The Level of Financial Knowledge of Senior High Students

Table 3 shows that the level of financial knowledge of senior high student

is high, with a grand weighted mean of 3.72. This means that financial knowledge

is manifested. This implies a high level of understanding of financial concepts,

interest rates, investment returns, and the impact of inflation on purchasing

power. The statement “I understand financial concepts such as money

 50

management, investment and budgeting” had the highest mean score of 4.14

and the statement “I understand how to minimize risk in investment” had the

lowest 3.45.

The findings are also evident in the result of Rasyid et al. (2018), that

there is a significant impact of financial knowledge on investment choices, which

would include an understanding of financial concepts, interest rates, investment

returns, and the impact of inflation on purchasing power. It highlights the

importance of financial knowledge in shaping investment decisions of individuals.

Statement Weighted Description

Mean Level
I stick with the same product for a long time. 3.76 High
I tend to allocate my budget towards items I 3.99 High
spend on regularly.
I firmly believe that the if items I spend on are 4.12 High
worth it, then I will stick to that brand.
I am open in trying out other offerings from the 3.73 High
same brand or company I have been
consistently using and supporting.
When it comes to items I have purchased, I 3.78 High
often recommend them to my fellow students.
Grand Weighted Mean 3.88 High
Table 4. The level of spending behavior of senior high students in terms of
loyalty.

Table 4 shows that the level of the spending behavior of senior high

students in terms of loyalty is high, with a grand weighted mean of 3.88. This

means that the spending behavior is manifested. This implies that students tend

to stick with the same product for a long time, allocate their budget towards items
 51

they spend on regularly, and firmly believe in the value of the items they

purchase.

Additionally, the students are open in trying out other offerings from the

same brand and often recommend their purchases to others. The statement “I

firmly believe that the if items I spend on are worth it, then I will stick to that

brand” had the highest mean score of 4.12 and the statement “I am open in trying

out other offerings from the same brand or company I have been consistently

using and supporting” had the lowest mean score of 3.73.

The result is also supported by the findings of Normawati, Rahayu &

Worokinasih (2021), suggests that individuals with higher financial knowledge,

digital financial knowledge, and positive financial attitudes tend to exhibit certain

behavioral patterns, such as loyalty to certain financial products or services,

allocating budget towards regular expenses, and recommending their financial

decisions to others. It highlights the link between financial knowledge, attitudes,

behaviors, and satisfaction, which aligns with the described consumer behavior

patterns.

Table 5. The level of spending behavior of senior high students in terms of

overspending.

Statement Weighted Description

Mean Level
I ensure to plan out my monthly spending and 4.16 High
saving.
There are times when my allowance does not quite 4.06 High
cover all of my expenses.
Sometimes, I find myself borrowing money to meet 3.16 High
my needs and desires.
Most of the time, I end up reaching my spending 3.64 High
limit.
 52

I have observed that borrowing money plays a 3.35 Average

significant role in enhancing my financial capability.
Grand Weighted Mean 3.67 High

Table 4 shows that the level of the spending behavior of senior high

students in terms of overspending is high, with a grand weighted mean of 3.67.

This means the spending behavior is manifested. This implies that students

generally plan out their monthly spending and saving, although there are

instances where their allowance does not cover all expenses. However, they do

not frequently find themselves borrowing money to meet their needs and desires,

and they often observe that borrowing money enhances their financial capability.

The statement “I ensure to plan out my monthly spending and saving” had the

highest mean score of 4.16 and the statement “I have observed that borrowing

money plays a significant role in enhancing my financial capability” had the

lowest mean score of 3.35.

The result is also parallel to the findings of Johan, Rowlingson and

Appleyard (2020), it reveals that students who undergo personal finance courses,

coupled with family financial socialization and discussions about money with

friends, tend to develop better financial knowledge, attitudes, and behaviors. It

suggests that these individuals are more likely to plan out their monthly spending

and saving, manage their finances effectively, and may not need to borrow

money frequently. Additionally, they may perceive borrowing money as a tool to

enhance their financial capability rather than a necessity.

Table 6. Overall summary

No. Summary Weighted Description Level

 53

Mean
1. Loyalty 3.88 High
2. Overspending 3.67 High
GRAND WEIGHTED MEAN 3.77 High
Overall, the grand weighted mean for spending behavior is 3.77, indicating

a high level of spending behavior among senior high students.

The findings of Yahaya et al. (2019 indicates that participants possess a

moderate degree of financial understanding. Those who underwent a Financial

Management course demonstrated a superior level of financial knowledge in

contrast to those who did not partake in such a course. Notably, financial

knowledge exerted a noteworthy impact on financial attitudes, and these

attitudes, in turn, significantly affected financial behavior. However, it is

noteworthy that financial knowledge itself did not exhibit a significant influence on

financial behavior.

The significant relationship between financial knowledge and spending

behavior:

Table 7. The Correlation Matrix

Spending Spending
FINANCIAL Behavior In Behavior In
KNOWLEDGE Terms Terms
Loyalty Overspending
Spending Behavior
0.228* —
in Terms Loyalty
Spending Behavior
in Terms 0.083 0.346*** —
Overspending
Spending Behavior 0.185 0.801*** 0.839***
Note. * p < .05, ** p < .01, *** p < .001

The correlation matrix table presents the correlation coefficients between

financial knowledge and spending behavior in terms of loyalty and overspending

 54

among senior high students. The correlation coefficient for financial knowledge

and loyalty is 0.228, indicating a positive and significant relationship (p < .05).

Additionally, the correlation coefficient for financial knowledge and overspending

is 0.083, suggesting a positive but non-significant relationship (p > .05). These

findings imply that there is a significant association between financial knowledge

and loyalty in spending behavior, while the relationship with overspending is not

statistically significant. Therefore, it can be concluded that financial knowledge

moderately influences loyalty in spending behavior among senior high students.

Regression Analysis

Model Coefficients - SPENDING BEHAVIOR

Stand.
Predictor Estimate SE t p
Estimate
Intercept 3.183 0.3193 9.97 < .001
Financial
0.158 0.0848 1.87 0.065 0.185
Knowledge
Table 8. Coefficient of the Linear Regression

Notably, the linear regression model revealed a marginally significant

relationship between financial knowledge and spending behavior, with a

coefficient of 0.158, a standard error of 0.0848, and a t-value of 1.87 (p = 0.065),

suggesting that financial knowledge moderately influences spending behavior

among senior high students.

Table 9. The Model Summary

Model Fit Measures

Adjusted
Model R R² F df1 df2 p
R²
 55

1 0.185 0.0344 0.0245 3.49 1 98 0.065

Hypothesis Testing

The model fit measures for the relationship between financial knowledge

and spending behavior among senior high students indicate a weak positive

relationship (R = 0.185, p = 0.065). The coefficient of determination (R² = 0.0344)

suggests that only 3.44% of the variance in spending behavior can be explained

by financial knowledge. The F statistic (F = 3.49, df1 = 1, df2 = 98, p = 0.065)

further indicates that the model is not statistically significant. Thus, the

relationship occurred only by chance.

 56

Chapter IV

SUMMARY OF FINDINGS, CONCLUSION, AND RECOMMENDATIONS

This chapter sums up the findings of the research and narrates the

conclusion and recommendations made by the researchers for future research.

Summary of Findings

1. The level of financial knowledge of senior high student is high, with a

grand weighted mean of 3.72. This means that financial knowledge is

manifested. This implies a high level of understanding of financial

concepts, interest rates, investment returns, and the impact of inflation on

purchasing power.

2. The level of the spending behavior of senior high students in terms of

loyalty is high, with a grand weighted mean of 3.88. This means the

spending behavior is manifested. This implies that students tend to stick

with the same product for a long time, allocate their budget towards items

they spend on regularly, and firmly believe in the value of the items they

purchase.

3. The level of the spending behavior of senior high students in terms of

overspending is high, with a grand weighted mean of 3.67. This means

the spending behavior is manifested. This implies that students generally

plan out their monthly spending and saving, although there are instances
 57

where their allowance does not cover all expenses. However, they do not

frequently find themselves borrowing money to meet their needs and

desires, and they often observe that borrowing money enhances their

financial capability.

4. These findings imply that there is a significant association between

financial knowledge and loyalty in spending behavior, while the

relationship with overspending is not statistically significant. Therefore, it

can be concluded that financial knowledge moderately influences loyalty in

spending behavior among senior high students.

Conclusions

The research was conduct to determine the relationship between financial

knowledge and spending behavior of senior high school students. The result

showed that the factor “loyalty” in spending behavior has the higher mean having

a grand weighted mean of 3.88. Based on the findings of the study, the level of

financial knowledge and spending behavior of the students revealed a strong

positive relationship. It is concluded that that financial knowledge moderately

influences loyalty in spending behavior among senior high students. The result

also found that financial knowledge and spending behavior are high. Thus, it can

be said that financial knowledge is one of the factors that influence the ability of

students in handling there spending behavior. Since based from the obtained

value from the Pearson Product Moment Correlations Coefficient (0.185), it is

proof that Financial Knowledge significantly influences the level of Spending

Behavior, especially when it is high.

 58

In relation to the Theory of Planned Behavior by Ajzen (1985), financial

knowledge significantly influences attitudes towards spending behavior,

subjective norms regarding financial management, and perceived behavioral

control over spending habits. Students with higher financial knowledge tend to

exhibit more positive attitudes towards responsible spending and feel more

confident in their ability to control their financial decisions. Moreover, external

factors such as education directly impact spending behavior, highlighting the

importance of financial literacy programs in promoting responsible financial

behaviors among students. This convergence of findings underscores the

relevance of the planned behavior in understanding and addressing spending

behavior in educational settings.

Recommendations

The following recommendations are hereby presented:

1. The monitoring and tracking plan of students’ budget, regularly checking

their income and expenses, and gain financial knowledge and skills by

attending seminars and workshops.

2. The enhancement of financial literacy guidance of children and

understanding of responsible spending habits.

3. The integration of teacher’s life experiences for budgeting skills and

responsible spending habits into their teachings.

4. The school needs to conduct seminars and workshops to educate the

students on how to budget their allowances.

 59

5. The enhancement of the curriculum by integrating financial literacy

program for senior high school students.

6. The wider scope and exploration to other location for the association

between financial knowledge and spending behavior in terms of

overspending.