THE EFFECT OF SCHOOL EXPENDITURE ON COLLEGE STUDENTS’ SPENDING
HABITS AT CHRIST THE KING COLLEGE
A Research Proposal
Presented to the Faculty of Accountancy Department
Christ the King College
In Partial Fulfillment
of the Requirements for the Degree
of Bachelor of Science in Accountancy
Bitangcor, Leizelle Dawn Z.
Gialen, Dhaniela Syrhel C.
Hurtado, Arah Grace M.
Sacupayo, Shiara Mae M.
Teatro, Carel Mae G.
CHAPTER I
THE PROBLEM
Introduction
The concept of spending plays a significant role in economic analysis since it facilitates
the stability of economic growth. Keynes (2015) stated that the relationship between expected
income and consumption is one that many economists have explored.
According to Mankiw (2012), spending is the expenditure of the household to buy goods
and services. Goods are tangible items that we consume, such as durable goods, vehicles, food,
and clothing, whereas services include intangible items such as education and house
rent. Individuals commonly understand investment as the deferral of something in the present to
be enjoyed later, or the placement of capital or funds on some asset that is expected to earn
something or increase in value in the future. There are also studies that show different factors that
can affect the spending habits of individuals, and these include demographic factors (Levenson,
2014),
age,
sex,
(Villanueva,
2017),
qualities
and
learning
or
education (Jill M. Norvilitis, Michelle M. Merwin, Timothy M. Osberg, Patricia V. Roehling,
Paul Young, and Michele M. Kamas, 2006).
Meanwhile, Rajasekharan Pillai, Rozita Carlo, and Rachel D’souza, (2010) say that young
adults have a better sustainability perspective and are significant in finance prudence. The reason
is that they have a higher financial literacy or knowledge that helps them avoid bankruptcy and
making poor consumer decisions. As spending is an individual’s routine, technically, it is also
part of the economic cycle. If someone does not overpass these, there is a possibility of some
serious consequences (Birari & Patil, 2014). Xiao and Dew (2011) take into account personal
financial management with regard to cash flow, credit, saving, and investment management. It is
also important that they know how to manage their financial behavior (Nguyen & Lai, 2013) or
save (Gries & Ha, 2014). However, defining financial management behavior involves different
factors (Xiao & Dew, 2011).
Spending habits vary from person to person. Students are involved in conspicuous
consumption regardless of the source of funds. They have no or limited experience in saving and
spending as they learn to live within their means. Individuals below the age of 30 years have a
high rate of debt because of their limited experience with finances and managing money (Kim et.,
al,2016). Student budgeting primarily refers to the management of financial expenses within the
confines of their allotted budget. Several factors contribute to students' dynamic and distinct
behavior. These factors can be both technical and psychological, as well as controllable or
uncontrollable. The most difficult challenge that students face is the inability to budget their
expenses and save a proportionate amount each month for unforeseen events. The majority of
students receive their monthly allowance from their parents and are accountable to them for their
spending. Higher family income can significantly contribute to students' good academic
performance, but lower family income should not be used as an excuse for poor performance.
Developing the saving habits of students can be an effective tool to encourage the younger lot to
live in a financially sustainable way. The more knowledge students have about their financial
responsibility and status, the less likely they are to be in debt.
The purpose of this study is to determine the factors affecting the spending habits of college
students at Christ the King College on their school expenditures. This research is important
considering that students must know how they will budget and how they will spend their money
on personal needs and on school expenses.
Theoretical Framework
This study was anchored on the researcher’s concepts and theories critically examined from
which relevant variables were taken. These theoretical foundations have helped the researcher
refine the research problem and develop the conceptual framework of this study. The theories
adopted were the Consumer Choice Theory by James Bettman (1979), Life-Cycle Hypothesis
Theory by Franco Modigliani and Richard Brumberg (1950), and Multiplex Theory by Aaron
Pallas and Jennifer Jennings (2010).
Consumer Choice Theory will be part of our theoretical framework. The theory states how
people decide to spend their money based on their individual preference and budget constraints.
Individuals have the freedom to choose between different bundles of goods and services. That is
why this theory helps seek to predict purchasing patterns by making the following basic
assumptions about human behavior; utility maximization, non-satiation and decreasing marginal
utility.
On the other hand, Life-Cycle Hypothesis Theory explained the spending and saving habits
of people over the course of a lifetime. The theory states that individuals seek to smooth
consumption throughout their lives by borrowing when their income is low and saving when their
income is high. The theory also assumes that people plan ahead when it comes to building wealth,
but many procrastinate or lack the discipline to save.
However, Multiplex Theory expands the idea of services, money management,
development and education expenditure. The theory emphasizes the contributions of multiplex
funding streams; the author provides new evidence on the distribution of expenditures on public
education in other countries such as New York City. They find that there is substantial year-toyear stability in per-pupil expenditure, that expenditures are responsive to the social and economic
characteristics varying levels of the education system, and that allocation decisions made at a given
level of the system may either amplify or diminish the distributional consequences of allocation
decisions made at a higher level of the system.
With these theories, the present study aims to identify whether school expenditure affects
spending habits of college students.
Conceptual Framework
Statement of the Problem
This study attempts to examine undergraduates of Christ the King College and their school
expenditures affecting spending habits.
1. What is the demographic profile of the participants in terms of:
2.
3.
●
Sex
●
Age
●
Course; and
●
Allowances
What are the school expenditures of undergraduate students in terms of:
●
School expenses
●
Food; and
●
Transportation
Is there a significant difference between participants’ school expenditures affecting their
spending habits in terms of their demographic profile?
Hypotheses
The following are the hypotheses of this research.
Ho - There is a significant difference between participants’ school expenditure affecting its
spending habits in terms of their demographic profile
Ha - There is no significant difference between the respondent’s demographic profile and their
school expenditure affecting their spending habits
Significance of the study
The present study was significant to the college students of Christ the King College,
Parents, Peers, and Future Researchers.
The result of the study will merit the following:
Students. This study will help the students to determine their spending habits on school
expenditures and will help them assess how they will be going to budget their allowances.
Parents. Who are directly concerned with the education of their children considering that
they are the ones who grant allowance to their children and will be able to know the expenses
incurred in the school.
Peers. This study will help other students determine the budget for their allowance since
this study conveys the spending habits of college students.
Teachers. This study will be a guide to prepare students to have the right that should be
utilized on handling their money.
School Administrators. This research will help them think of programs and seminars that
should be conducted in order to improve student’s spending habits.
Future Researchers. The result of this study can serve as a basis for further study on the
students’ spending habits on school expenditures.
Scope and Limitation of the Study
This study focused on the relationship of spending habits and school expenditure of college
students. Among the different demographic profiles of students that may affect student’s spending
habits, the present study only included age, sex, allowance, and course. As for the school
expenditure of all college students of Christ the King College, the factors were only limited to
school expenses, transportation, and food. The researcher did not limit the study to only one course
but is applicable to all available courses in the college department. It explores college student’s
spending habits based on their demographic profile if it will be affected by the factors that represent
their school expenditure. The information needed will be gathered using a checklist-style researchmade questionnaire. All information and conclusions drawn from this study were obtained through
availability of students. Since the target respondents are randomly selected, the researcher did not
consider the present study perfectly accurate.
Definition of terms
For better clarification and understanding of the terms related to this study, the following
terms are defined conceptually.
School Expenditure. This refers to the expenses incurred for school purposes such as
school events, program fees, etc.
Spending Habits. This refers to the acquired behavioral pattern of college students on how
they spend their allowances for school expenditures.
Allowances. This pertains to a sum of money granted to students as reimbursement or
bounty or for school expenditures.
Food. This refers to any nutritious substance that people or animals eat or drink or that
plants absorb in order to maintain life and growth.
Transportation. This pertains to the conveyance or travels from one place to another such
as home to school, Boarding house to school, and vice versa.
Course. In higher education a course is a unit of teaching that typically lasts one academic
term, is led by one or more instructors (teachers or professors), and has a fixed roster of students.
A course usually covers an individual subject.
Age. Describes how old a person is at a particular point in time. It is defined as the measure
of the time elapsed from the date of live birth to a specific point in time, usually the date of
collection of the data.
Sex. Based on the physical or biological aspects of a person's body
CHAPTER II
REVIEW OF RELATED LITERATURE AND STUDIES
This chapter presents the summary of literature and studies that have relevance to the
present study. Current literature explores the impacts of demographic factors that influence the
financial habits of college students. They are viewed by the researcher to gain deeper insights into
the field of study. It was from these materials that the concept of this work was based and formed.
SPENDING HABITS
Spending habits are a key element of managing one's finances and are influenced by a wide
range of circumstances. The effects of sex, age, course, and allowances are among these
variables. One's personal spending patterns and behaviors are greatly influenced by their level of
financial literacy or understanding of financial concepts and the ability to make sensible financial
judgments. People with little financial literacy may make poor financial decisions including taking
on a lot of debt, spending more than they make, or overspending on unneeded goods or services.
High levels of financial information and literacy result in greater savings, sensible investing
strategies and behaviors, and effective debt management, per a study published in the Journal of
Economic Info. According to Obagbuwa and Kwenda (2020), a person is classified as a poor
spender if he or she has poor discipline in terms of constant spending behavior. Researchers Kamis
et al (2021) said that when spending increases, demand also increases. According to a study,
assessing students' behavior is a simple but effective way for students to reduce their spending and
improve their budgeting (IJCRT, 2020).
Allowances pertains to a sum of money granted to students as reimbursement or bounty or
for school expenditures. According to (Vhalery, et al., 2018) The research paper classifies
variables that become factors that influence allowance management. The result shows that factors
which influence allowance management are divided into 10 factors which are financial knowledge
factor, financial motivation and desire factor, wisdom factor, socio-culture factor, individual status
factor, individual attitude factor, family relation factor, individual friends' environment factor, and
also family background factor. The paper however does not take into consideration the various
spending habits of students like shopping, movies, dine outs etc. It does not give a clear picture of
how much an average student spends monthly on what activity. In the Philippines, (Abawag,
C.F.N et al, 2019) concluded that most of the monthly allowance of their respondents is spent on
food. This is relevant in our study particularly, there is tight spending when it comes to personal
needs and academic purposes which enable us to determine the effect on how students manage
their allowances.
Sex identification is a great deal to put into the issue of whether females spend their money
more compared to males and vice versa. According to previous research, females tended to spend
more money on clothes while men spent more money on entertainment and eating out. According
to (Jalil et al. 2020), women are more likely to have a wise budget than men. However, women
more frequently accumulate a higher amount of total debt. This study is relevant in our research
topic, for us to evaluate whether females have more spending habits than males or vice versa.
Age describes how old a person is at a particular point in time. It is defined as the measure
of the time elapsed from the date of live birth to a specific point in time, usually the date of
collection of the data. Many college undergraduates and graduates in their early twenties are
struggling with financial instability because many do not yet have a stable income, and if they do
they have life expenses that they have to attend to. More importantly, the transitional period to
adulthood for adolescents has changed drastically. The financial habits of young adults are
important because these young people are living in a time when the economy is changing. De
Ruyter et. al (2019) writes about the “Fourth Industrial Revolution'' and the gig economy. Gig
work, as a form of self-employment, strictly speaking is a contemporary labor market phenomenon
analogous to the current century (de Ruyter, Brown, and Burgess, 2019, p.39). For current
undergraduates and recent college graduates that have spent thousands of dollars to receive an
education to specialize in a particular field of work– and endure rising costs in student debt, the
new labor market provides unique challenges. This study is relevant in our research topic since it
enables us to know who is more struggling in earning money which has an effect on spending
habits.
Course is a unit of teaching that typically lasts one academic term, is led by one or more
instructors (teachers or professors), and has a fixed roster of students. A course usually covers an
individual subject. It has been made an issue of whether financial education correlates with
behavior change as per previous studies. Several researchers have agreed that financial education
has brought upon a favorable outcome based on a conducted study from distinct target populations
like that of employees, students, and financial counseling clients. This is relevant in our research
topic since we are going to assess if different courses in all levels affect their spending habits on
school expenses.
The relevance of this study to the research topic is the fact that college students' buying
behavior is influenced by a lot of factors and behavioral issues. In addition, it highlights the impact
of buying behavior of college students depending on their allowance. According to (P.Jeevitha &
R.Kanya Priya, 2019) the study was conducted in India. They conclude that students save less than
they spend but their spending avenues are different. Most of the students have savings and they
know about the importance of savings. Students commonly prefer saving bank accounts as their
saving avenues. Students save for their emergency situations. From the study on the spending
pattern of students, they are spending a higher amount on transportation and studies.
SCHOOL EXPENDITURE
Students who are in their College years experience difficulty to regulate their expenditures
and are likely to depend on the financial support of their parents. This phenomenon is likely to
affect their budget per day, which is limited and just enough to spend for their transportation, food,
and sometimes school supplies. Daud et al., (2018) stated that there are many students who face
financial problems while studying in college. They are constantly under pressure because of the
lack of financial resources or of the financial loans that they take for getting enrolled in a college.
School expenses of many students have financial difficulties due to their low financial
resources and high cost of living, including running a deficit budget, failing to set spending
priorities, failing to keep track of expenses, lacking in planning, and failing to pay debts. Thus,
there is an imbalance in the income-to-expenditure ratio (Daud et al., 2018).
Food is essential to any budget, there is quite a range of what people spend on food. Around
34% of college students today say that it’s difficult for them to afford a sufficient amount of food
every month. These students often tend to skip meals to reduce their expenses. The average college
meal plan costs around $375 every month. A study in 2018 showed that college students spent
approximately $65 billion on food. Food expenses range from basic groceries to eating out and
getting takeout. In other cases, students try to be as economical as possible with food, especially
when they’re struggling to manage other expenses.
Transportation costs vary a lot based on accommodation. Many students go outside their
home states to pursue a college degree. In this case, the recurring expense of traveling to and from
their home state during college breaks can add quite a lot to their expenses. For instance, a student
taking a train or bus to go home within a few hours will have significantly fewer travel expenses.
Costs will also vary depending on your type of transportation. If you own a car, you’ll have
to consider added costs due to on-campus parking fees, gas, car insurance, and regular
maintenance. On the flip side, transportation costs will be much lower if you choose to walk to
campus or opt for a bike or public transit. A lot of students prefer to stay off-campus in shared
apartments to reduce higher dorm costs. However, make sure this doesn’t backfire with increased
transportation expenses.
To search for the underlying factors behind their expenditure (Bona, 2018) Study found
that students choose to buy the product which will meet their interest relative to product and price.
The study concluded that college students’ spending behavior is massively influenced by their
family background. Parents also play a critical role in shaping not only the attitudes towards
financial management but also the life attitudes in general of their children. To improve financial
habits, students must take some time to create concrete measures to help them keep track of their
expenses.
COLLEGE STUDENT
Being a college student is fun, but there are so many responsibilities ahead of that. Some
college students are the first time leaving the warmth of their parents and being away from their
home. This is the early age of being an adult so they need to learn to live on their own and budget
their own money. Determining the distinction between necessary and non-essential objects is
another challenge for many college students. Food, clothes, and toiletries are all essential products
for daily life and grooming, as well as, arguably, for schooling. Non-essential items are items that
you don't need on a daily basis, such as a new pair of shoes or an iPad. Non-essentials are things
that "want to have" but are not"important." Restrict your expenses to just important goods until
you've been used to working under your means, which could be tough at first (Segal, 2020).
The relevance of this study to the research topic is to know the factors that affect the
student's spending habits. Chavali (2020) stated in the conducted study that the influence of peers,
the influence of parents, and the financial literacy of youth are significantly correlated with the
saving and spending habits of youth. The conducted study aims to investigate the spending habits
of college students in Christ the king college and its objectives are the spending habits of college
students and the variables which have an impact on it.
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CHAPTER III
RESEARCH METHODS
This chapter presents research methodologies employed during the study. In light of this,
the study’s areas and reasons underpinning the choice of area are explained. This chapter discusses
the research design, respondents of the study, research instrument, data gathering procedure, and
treatment of data.
Research Design
This study employed the descriptive research design. Descriptive research design is a
procedure for collecting, analyzing, and “mixing” both quantitative and qualitative research and
methods in a single study to understand a research problem. Besides, this type of research is
considered appropriate for this study because it explored the relationship between the questions
related to the effect of school expenditure on college students’ spending habits at Christ the King
College.
Research Participants
The participants of the study are the college students enrolled in Christ the King College
from different courses in all year levels. The eligibility criteria in this study were that the
participants had to be enrolled at Christ the King College.
Sampling Procedure
The researcher chose participants for this study using the whole population sample
approach. Total population sampling is a sample that was carefully chosen based on the study's
needs. This implies that volunteers are chosen by the researcher depending on their desire to
engage in the study. Likewise, this technique enables the researcher to collect relevant and helpful
material for addressing the study issue. The population of this study consisted of students' school
expenditure affecting their spending habits.
Research Instrument
The researcher employed a structured kind of questionnaire to collect the information
needed for the study. This questionnaire is an adopted/modified instrument. The researcher
developed a questionnaire to collect data from college students in Christ the King College from
different courses in all year levels to determine the students' spending habits. A draft of the
questionnaire was created using the researcher's readings, prior studies, professional literature, and
published and unpublished thesis related to the subject. When designing the instrument, the
prerequisites for creating an effective data-gathering instrument were considered. This
questionnaire is divided into 2 parts. The first part contained the profile of the respondents. The
second part asked for the elicit information regarding the student’s spending habits. In the space
provided after each item, a check based on the right portion of the questionnaire answerable by
yes or no.
Validity and Reliability of the Research Instruments
The reliability of an instrument is concerned with how consistently it measures the idea of
interest, whereas validity is defined as the amount to which the instrument represents the abstract
construct under consideration. The researchers created the aforementioned survey questionnaire,
which was subjected to content validity testing by specialists in the field of the study. The pilot
testing of the instrument is to be conducted by the researcher.
Data Gathering Procedure and Ethical Considerations
Questions appropriate for the study are developed after the success of determining the
validity and reliability of how data is collected. These questions will determine how likely students'
school expenditure will assess them on determining their understanding of their spending habits.
The researcher oriented and informed the respondents that their corresponding answer to the
question is kept by the respondents' and researchers' agreement and its confidentiality. The data
gathered was organized and tabulated according to the result of the statistical treatment done. In
this stage, the service of a statistical consultant was needed.
Scoring Procedure