Chapter 2 Final
Chapter 2 Final
This chapter provides foreign and local related literature and studies gathered from online journal
resources used by the researchers who were seeking this paper as a guide in order to have more
accurate studies. This related literature helped the researchers have a better understanding and a
wider perspective on the topic gathered.
It is important to set the context of the literature review work by first providing:
The main purpose of the literature review work was to survey previous studies on the
relationship between having allowances, spending habits, and financial literacy.
LOCAL STUDIES
When parents or guardians give their children money for their daily needs and expenses,
this is known as an allowance (Galulu et al., 2017). When a need is sufficiently piqued, it
becomes a motive. The consumer's need to meet those needs drives such a decision. Given his or
her preferences and tastes, the customer acts rationally by attempting to maximize utility
(Guzman, 2001). Utility is defined as the enjoyment or pleasure derived from owning, using,
consuming, or utilizing goods and services (Medina, 2003).
(Abawag, C.F.N et al., 2019) discovered that the majority of their respondents' monthly
allowances were spent on food in the Philippines. Spending is especially restricted on necessities
for personal use and intellectual pursuits. According to their research, gender, course, year level,
and ethnicity are all factors that influence differences in spending behavior. According to a study
conducted at the University of Saint Louis in Tuguegarao City, Cagayan, male students are more
impulsive spenders. Teenagers socialize and shop. They also spend money on entertainment,
dining out, and clothing and accessories (TJManotoc, ABS-CBN News, 2010). (par. 2)
One's food spending habits are influenced by their income (or allowance, in this case),
which allows them to stick to their budget (Homburg, Koschate, & Totzek, 2010).
Fast food would be the norm in the United States, where people work long hours at the office.
FAFH accounts for half of a person's meal expenditure (Bhuyan, 2011). University students, on
the other hand, bring their own meals to campus or choose to purchase food from the institution
(Felinic, Nola, & Matanic, 2008).
Financial difficulties are one of the factors identified by higher education systems around
the world as a source of stress for students (Aherne, 2001; Joo, Durband, & Grable, 2008;
Roberts, Golding, Towell, & Weinreb, 1999). It should come as no surprise that financial stress
and uncertainty have a negative impact on students' well-being (Mahmoud, Staten, Hall, &
Lennie, 2012; Smyth, Hockemeyer, Heron, Wonderlich, & Pennebaker, 2008). Financial stress
has been linked to a variety of negative behaviors, interpersonal issues, and academic outcomes
in students, including higher self-reported mental health needs (Hyun, Quinn, Madon, & Lustig,
2006), difficulties adjusting to college (Meehan & Negy, 2003), and social difficulties (Adams,
Meyers, & Beidas, 2016; Northern, O'Brien, & Goetz, 2010).
According to Felipe (2007), "a large number of students tend to seek what is the "in"
trend, what individuals are doing or utilizing "right now." It is common for children to have one
or two sources of money, such as an allowance from their parents or a job. This question does
not have an answer. It is more of a way of life and raising the children that the parents have
given them than looking at the family's money or social position. According to ("Students
between teens and generation Y," 2006), and with college students being big consumers of
electronics, retail, mobile/wireless, autos, cosmetics, credit cards, fast food, and many other
things, it is important to understand their dining out views and opinions. Furthermore, children
and teenagers in the Philippines represent a billion peso market. Teenagers in the Philippines
collectively spend more than 300 billion pesos per year. Despite the fact that DLSU students
constitute a small portion of the population, understanding their dining and spending habits may
help marketing and strategy firms better understand the preferences, purchasing, and spending
patterns of this influential group, according to the study (Study: Teen youth make up a billion
peso market, 2012).
Filipinos are frequently self-assured when it comes to money management. They also
have a sense of entitlement that drives them to purchase items. Disinformation, as well as
incorrect practices and attitudes, demonstrates that the vast majority of Filipinos are prone to
"blind spending" and lack financial literacy. Mamaya na lang, or procrastination, allows people
to make excuses for not saving money based on cultural beliefs (fFE Life and lifestyle magazine
editors, 2014). A variety of internal and external factors may influence impulse purchases.
Personality factors (see Sofi and Nikka, 2017), individual goals, and personal financial resources
may all contribute to this behavior at the individual level. Externally, appealing market cues may
persuade consumers to make impulsive purchases (Iyer et al., 2020).
Budgeting has always been a part of people's daily lives. It's always there; some people
have enough resources, while others don't. Expenses vary according to a person's socioeconomic
status. Students who receive a weekly allowance may struggle to manage their finances well. The
purpose of this research is to find out how poorly allocated allowances affect the academic
performance of Grade 12 accounting, business, and management students. Using a qualitative
approach and descriptive research methodology, this study investigated the impact of poor
budgeting on the academic achievement of grade 12 ABM students.
According to Stollak, M.J. et al. (student budgeting), women were far better planners and
budgeters than men. Similarly, as they matured, students became better budgeters and planners.
As a result, the college should begin looking into ways to better instill the younger male
population. This research was carried out in the United States. The study was carried out in
India, according to P. Jeevitha and R. Kanya Priya (2019). They conclude that students save less
than they spend, but their spending habits vary. The majority of students have savings and
understand the value of saving. Students frequently prefer saving bank accounts as avenues for
saving. Students set aside money for an emergency. According to a study of student spending
habits, they spend the most money on transportation and education.
According to Abawag, C.F.N et al. (2019), the majority of their respondents' monthly
allowance in the Philippines is spent on food. Spending is restricted, particularly for personal
needs and academic purposes. According to their research, gender, course, year level, and
ethnicity are determinants of differences in spending behavior. Male students spend more freely,
according to research conducted at the University of Saint Louis in Tuguegarao City, Cagayan.
Foreign Study
The lack of financial education affects both individual budgets and the operation of
monetary business sectors (Bank of Lithuania, 2012), as well as open spending. Estimating both
the level of financial proficiency and the factors that influence it is thus critical. The monetary
proficiency of children, particularly schoolchildren, will influence their financial choices and
financial prosperity (Sohn et al., 2012; Jorgensen and Savla, 2010). However, many children
only understand the value of money after gaining financial independence. This results in a lack
of motivation for deliberate learning of monetary disciplines; consequently, the importance of
guardians' monetary socialization is frequently emphasized in the research: how and how much
do guardians determine their children's level of monetary proficiency? (Shim et al., 2010).
According to Huston (2010), determining the range of terms and their interpretations, "financial
proficiency," "financial information," and "financial instruction" are frequently confused.
According to the author, various monetary proficiency definitions incorporate at least one of the
following categories: knowledge of monetary ideas; capacity to comprehend and apply monetary
ideas; capacity to oversee individual budgets; proper monetary thinking abilities; capacity to
actually design future monetary necessities.
A student's daily allowance is the amount of money that they are entitled to on a daily
basis. It is one of the resources available for purchasing each student's needs. The majority of
students receive their allowance from their parents and the money earned as a salary from their
work. Higher family income may have a positive impact on academic performance. However, for
responsible and serious students, low family income should not be used as an excuse for poor
performance (Adzido, Dzogbede, Ahiare, and Dorkpah, 2016).
Bhat, Joshi, and Wani (2016) backed up the latter claim that socioeconomic status is a
major factor in academic achievement. As a result, higher socioeconomic status has a significant
impact on the quality of student achievement (Farooq, Chaudry, Shafiq, and Berhanu, 2011).
Academic achievement is of primary importance in the context of an education system, implying
successful scholastic achievement of students and high-level human resource improvement.
Furthermore, in terms of academic performance, adolescents with high and middle
socioeconomic status outperform adolescents with low socioeconomic status (Singh and
Choudhary, 2015).Students' socioeconomic status has an impact on their academic achievement.
Students with a high socioeconomic status have better exposure to and surroundings, which leads
to better results than students with a low socioeconomic status (Chandra and Azzimudin, 2013).
According to studies, students choose the product that best meets their needs in terms of
price and quality (Bona, 2018). According to the findings of the study, family history has a
significant impact on how much money college students spend. Parents have a significant
influence on their children's overall outlook on life, in addition to influencing their attitudes
toward money management. In order to improve their financial habits, students must put forth
the effort to create practical budgeting tools. They should first create their own budget and track
their progress. By keeping a record of their outgoing funds, they can keep track of their spending
on accessories, entertainment, and electronics. By keeping a record of their outgoing funds, they
can keep track of their spending on accessories, entertainment, and electronics. They should not
overlook allocating funds for savings because a successful budget includes them. They should
also have a positive attitude. This study was unable to measure students' spending habits in
monetary terms due to its more qualitative focus.
Millennials must be financially literate because they will be making financial decisions
that will affect them for the rest of their lives. Financial decisions faced by younger generations
are far more difficult than those faced by older generations. Nowadays, people are expected to
take on more responsibility.When making such important decisions, financial knowledge is
essential.
Financial literacy has an impact on a variety of financial behaviors (Lusardi and Mitchell,
2014).According to research, customers who are not fully aware of interest rates and interest
compounding "end up borrowing more and saving less money" (Stango and Zinman, 2009).
Those with a better understanding of basic financial concepts, on the other hand, "are more likely
to diversify risk by distributing capital across many businesses" and prefer to plan and prepare
for retirement (Abreu and Mendes, 2010). Behrman et al. (2012); Lusardi and Mitchell (2014).
Some European Union member states have developed and implemented national financial
education strategies centered on the following goals: "compulsory financial education in the
school curriculum," "creating consumer websites and/or specialized online learning portals," and
"development of educational materials dedicated to d (Iacovoiu and Stancu, 2017; EBF, 2015).)
A school allowance is money given to students while they are in school. When students
purchase their requirements for a specific subject, allowance plays a significant role. Students'
allowances may influence their interest in studies. It would be interesting to know if students can
determine if they have an adequate allowance. Students are given allowances by their parents. It
is critical to determine whether students' socioeconomic status influences their performance and
determination.
The students' attitude toward their studies may determine their future success. Higher
family income may help students perform better. Nevertheless, it is not a reason for students
from low-income families to be less serious and responsible in their academic performance
(Adzido, Dzogbede, Ahiave, and Dorkpah) (2016). Students with a high socioeconomic status
have better exposure to and surroundings, which leads to better results than students with a low
socioeconomic status (Chandra and Azzimudin, 2013).
Any culture must have strong financial literacy in order to succeed and compete in a
global economy. worldwide community Financially and economically savvy individuals will
make sound decisions as producers, investors, and citizens, particularly students, parents, and
customers. This issue becomes critical during times of crisis. Uncertainty, as well as economic
and financial turmoil It is common knowledge that a scarcity of resources exists. Information and
ability have exacerbated the most recent financial and economic crises. Many people,
particularly young people, lack understanding of critical personal financial concepts such as
budgeting, investing, taking out loans, and spending money, which leads to poor financial
decisions. escalating the crisis These issues are widespread throughout the world, including
Belarus. We think it's fascinating to look into the state of the economy. They also demonstrated
the link between income and education levels, as well as the public's general overestimation of
personal financial expertise. the majority of those who responded (Orton, 2007).
The concept and definition of financial literacy are still being debated among researchers.
Financial literacy, financial education, and financial knowledge are terms that are frequently
used interchangeably in academic literature and the media. Financial literacy, according to
Kozina and Ponikvar (2015), is a component of human capital that is used in financial activities
to improve an individual's financial well-being. According to Mahdzan and Tabiani (2013),
financial literacy is the basic skills and knowledge that individuals require in order to survive in a
modern society.
Additionally, Krechovska (2015) stated that the definition of financial literacy includes
the ability to secure personal income, the capability to make decisions on expenditures, the
understanding of the consequences of personal decisions on current and future income, and the
job market. Financial literacy can be defined as measuring how well an individual understands
and applies personal financial skills or financial-related information in their life (Ibrahim, Harun
& Mohamed Isa, 2009). Lusardi and Mitchell (2014) defined financial literacy as "people's
ability to process economic information and make informed decisions about financial planning."
The goal of the study is to discover the elements' benefits, drawbacks, and potential
variables while spending within their budgeted limits. The goal of the research is to discover how
expenses and allowances affect students, as well as how much money they spend on a daily
basis. Additionally, this will determine how daily expenses affect student allowances. Students
and parents who want to understand the relationship between bet allowance and expenses will
find this study useful. This study will also build on previous related studies that have been
conducted. Furthermore, the study's findings will provide suggestions and recommendations for
improving the right allocation of funds for both future researchers and students who wish to do
the same study. They may develop solutions that are beneficial to them.