THE IMPACT OF FINANCIAL LITERACY ON THE SPENDING HABITS OF ACCOUNTANCY, BUSINESS, AND MANAGEMENT STUDENTS AT IMMACULADA CONCEPCION COLLEGE

Abstract

Research highlights the persistently low level of financial literacy among Filipinos, revealing a significant gap in financial education that contributes to poor money management skills and spending habits, particularly among the youth. This lack of financial awareness affects not only individual financial well-being but also the broader economy. Addressing this issue is essential for fostering economic development and financial security.

This study examines the impact of financial literacy on students' spending habits, aiming to enhance their knowledge and skills in managing finances effectively. By analyzing students' financial behaviors, the research seeks to provide insights into how improved financial education can lead to more responsible spending and better financial decision-making. This study employed a descriptive-correlational research design, utilizing an online survey questionnaire with close-ended and standardized questions. The research focused on 491 Accountancy, Business, and Management (ABM) students, with 220 respondents selected using Slovin's formula. A 4-point Likert scale was used to measure students' financial literacy and spending habits. The collected data were analyzed using weighted mean and Pearson r, with results presented in tables for interpretation and analysis. Accountancy, Business, and Management (ABM) students generally demonstrate moderate to high financial literacy. They exhibit cautious spending habits on both school and personal expenses, prioritizing essential educational resources and opting for affordability. However, they tend to disagree with practices such as keeping a written budget, fully spending their pocket money, and spending on computer shops and housing.

The study concludes that financial literacy significantly influences students' spending habits, as evidenced by a P-value of 0.00001, which is less than the alpha level of 0.05. This finding highlights the importance of financial education in shaping responsible financial behaviors among students. The results highlight the need for students to develop financial plans, track daily expenses, minimize unnecessary purchases, and prioritize essential needs. Schools should consider providing free computer access, while students should explore affordable housing options to better manage their finances. Additionally, teachers and parents play a crucial role in promoting financial literacy, particularly in areas such as budgeting and savings.

This study underscores the importance of enhancing financial literacy to empower students in making informed financial decisions and developing responsible money management habits.