An Investigation on the Financial Literacy among Glendale High School Students
Ernestine Rose P. Estrella
Maria Guia A. Dailisan
Marcus Vincent F. Soñega
February 16, 2018
Abstract
Financial Literacy is the ability of an individual to manage finances and resources efficiently and effectively. According to statistics, only 5% of the Filipino youth saves money. The study entitled An Investigation on the Financial Literacy Among Glendale High School Students determined how financially literate Glendale High School students through the distributed questionnaires to Grades 7-11 students. Also, the researchers discovered the factors affecting the respondents’ financial literacy and if the institution incorporates and teaches financial education, both through the utilization of interviews with one (1) Glendale High School Administrator and two (2) High School Teachers. To further collect information about the financial literacy in the Philippines, the researchers interviewed two (2) Financial Experts. The researchers determined that the respondents in some extent are financially literate. Thus, it is recommended that the institution must form a separate subject for the students to have a more intensive learning in finance.
Acknowledgments
With boundless gratefulness, the researchers would like to extend their gratitude to the people who helped make this research possible and successful. Specifically, the researchers would like to thank the following people:
To the researchers’ thesis adviser, Ma’am Geraldine Gentozala-Juachon whose knowledge, skills, time, and guidance helped make this study comprehensive and successful.
Primarily, to the respondents from Grades 7-11 who gave their time, effort, and full cooperation to answer the questionnaire. In line with this, the researchers recognize and value the time and effort of Ms. Leilani Juachon, Mr. Aldrich Juachon, and Mr. Arnold Antiporda who gave the researchers significant information regarding financial literacy of Glendale high schools students and the financial education of the institution.
Additionally, to Ms. Sherryl B. Uy and Mr. Harold Gomes for dedicating their time to answer the researchers’ interview questions through email. Thus, the researchers gained credible information concerning the financial literacy of Filipino high school students and the interviewees’ opinions on the socio-economic and cultural backgrounds of Filipinos.
Especially for Dr. Marilou Panlilio for her constructive comments, suggestions, and critique on this study for the purpose of making it more comprehensive and accurate.
The researchers also appreciated the support that Mr. Nicolas Completo Gaba Jr., the researchers’ class adviser, showed throughout the thesis writing. Also, we recognize the efforts of Ms. Sherrlene Uy for supporting the researchers and bridging them with the financial experts, and to the researchers’ teachers for supporting them and giving their time and effort to extend their help in making this thesis.
We also thank the students of Grade 11-Nebula and to the researcher’ parents for their consistent support on the thesis writing and final presentation which has given the researchers the inspiration to strive for more.
And most importantly, to Almighty God for giving the researchers strength and hope to write, present, revise, and finish this study.
CHAPTER I
BACKGROUND OF THE STUDY
Introduction
Definition of Financial Literacy
Many organizations have different definitions of the term ‘Financial Literacy’, however, the definition that reflects the understanding of the researchers about financial literacy is from the Government Accounting Office (GAO). They defined the term ‘financial literacy’ as “the ability to use knowledge and skills to manage financial resources effectively”. Other definitions of the term ‘Financial Literacy’ came from the National Financial Educators Council’s webpage and are the following:
“Financial literacy is the ability to use knowledge and skills to manage one’s financial resources effectively for lifetime financial security.”
-Jump$tart
“The ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.”
-The President’s Advisory Council on Financial Literacy
“The ability to understand basic principles of business and finance.”
-The Cambridge Business English Dictionary
“The combination of knowledge, skills, attitudes and ultimately behaviors that translate into sound financial decisions and appropriate use of financial services.”
-The Center for Financial Inclusion
Background of Financial Education
A study published by Leora Klapper, Annamaria Lusardi, and Peter van Oudheusden entitled “Financial Literacy Around the World: INSIGHTS FROM THE STANDARD & POOR’S RATINGS SERVICES GLOBAL FINANCIAL LITERACY SURVEY” revealed that only 25% of Filipino adults are financially literate. Meanwhile, a study published by the Asian Development Bank in June of 2015, shows that the Philippines by the time the study was written, do not have any national strategy or plan regarding financial literacy. And lastly, the Philippines scored 68 points on 2013 in MasterCard’s Financial Literacy Index (April 14, 2015), and for 2014, this dropped by two points with the country scoring only 66 points. Still, according to the same financial literacy index, it turns out that the Philippines scored only 67 points in 2013 when it comes to basic money management, dropping to 66 points in 2014. When it comes to the aspect of financial planning, the country scored 74 points in 2013, again dropping to 73 points in 2013. In addition, in the aspect of investments, the country scored 58 points in 2013, again dropping by two points having a score of 56 points in 2014.
A survey conducted by the World Bank from February to September of 2014, revealed that there are only 10 million Filipinos who have bank accounts, compared to the population of the country at that time which is according to them, 101,716, 359, this is only 9.9 percent. These studies show that the country does not perform well when it comes to financial literacy, and also that Filipinos are lacking financial literacy or education.
The Department of Education expressed their plan to include financial literacy in the curriculum of the Senior High School in their article that was published on June 21, 2016. Their plan includes the incorporation of financial education and consumer protection in the K-12 curriculum and having a training program about financial literacy that is designed for teachers. DepEd Undersecretary for Curriculum and Instruction, Dina S. Ocampo, believes that it is timely and important to develop financial literacy modules for Senior High School students, as they are already expected to be job ready by the time they graduated High School. The Department of Education already began a financial literacy project with Ateneo De Manila in 2007, as stated in one of their articles. The program includes developing teaching guides, teacher’s training about basic financial and economic concepts in relation to savings, and the development of teaching guides that will allow the teachers to incorporate the said concepts in the curriculum.
From the information provided above, it cannot be contested that although Filipinos are to some extent, financially literate, it cannot be denied that Filipinos still lacks financial literacy. Although the government is making steps in transforming Filipinos to be financially literate, this is still not enough to compensate the need. All of these shows that there is a need for having financial education in the country, to make Filipinos financially literate individuals.
Scope and Delimitations
The researchers used the term ‘delimitations’ and not ‘limitations’ because the limitations were already preset by the researchers’ thesis adviser and the researchers themselves. This makes it different from ‘limitation’ wherein no one preset or predetermined the limitations of their study.
This study entitled An Investigation on the Financial Literacy Among Glendale High School Students focused on the financial literacy of only Glendale School High School Students and does not include the financial attitudes, mindset, learning, and practice of the said students. The study also excluded students from other schools from any part of the Philippines other than Glendale School. The High School Students of Glendale School that were included in this study are only from Grades 7-11, Grade 12 students were not included.
For the instrumentation of the research, the researchers conducted a survey of respondents strictly from Grades 7-11 of Glendale School, with a total population of 81 individuals. The researchers ensured that all the personal information and data that the respondents have provided, are strictly confidential and remain exclusive for the analysis of the researchers. An interview was also conducted with one (1) Glendale School’s Administrator, two (2) Financial Experts, and two (2) High School Teachers.
For the study’s timeframe, the researchers were only given three (3) months to prepare, complete and finalize the research. This time frame includes formulating the thesis proposal and its approval, data gathering, thesis writing, conducting surveys, interview and observations, data analysis, and synthesizing and finalizing the study.
The Significance of the Study
The study entitled An Investigation on the Financial Literacy Among Glendale High School Students intends to know the extent of Glendale High School students’ awareness and abilities on handling money, making personal financial decisions (budgeting and investing), and the factors influencing their spending behaviors. Correspondingly, to help Grades 7-11 students establish a better financial mindset to effectively and confidently manage financial resources for a lifetime of financial well-being.
Likewise, vital results of this study are highly significant and beneficial to certain groups which are as follows:
Students
As the paper focuses on the financial literacy of Grades 7-11 Glendale students, this study aims to help them establish a better mindset to effectively and confidently manage financial resources for their future. As future leaders, the researchers believe that the study may possibly guide them to make rational choices or decisions in life when it comes to money matters.
Future Researchers
The findings of the study will also be beneficial to future researchers for it will serve as a reference and foundation to future studies about financial literacy. Thus, the study is an instrument which will give further depth to the topic and area of discussion.
The School
With the information, analysis, and recommendations of this study, the institution is able to improve or create a more comprehensive focus on financial literacy for high school students. It may give the school a background if they choose to develop financial education programs or courses which can sharpen the financial literacy of students and transform them into critical thinkers. Subsequently, the teachers will also gain and build their fundamental concept of finance which may be incorporated in their everyday teaching and life.
Families and Communities
The information gleaned from the study will serve as an educational tool for the family and community for it creates a collaborative work wherein group members will be equipped to plan financially. Thus, the families and communities are probable to be influenced by the study and are able to improve their awareness on budgeting and setting their necessities. Correspondingly, they are able to empower each other on their financial concepts and knowledge towards a financially secure future along with good financial practices. All in all, they are able to have the initiative and encourage other members of the society to strengthen their budget planning, support family and community projects, and manage their family and community setting.
Policy Makers
Lastly, the study provides possible recommendations for policy makers such as the Department of Education and Central Bank of the Philippines to generate programs and projects for the improvement on the financial literacy of students. Respectively, the planned and designed programs and projects aim to give depth to the knowledge of the students in some, if not all financial aspects. This will prepare them as individuals to identify priorities and opportunities in effectively practicing financial skills. In addition, they are able to recognize and evaluate the socio-economic levels of their family and community and use it to motivate themselves to make appropriate financial decisions. Furthermore, in accordance with the Youth Entrepreneurship Act, the students are exposed and will be continually taught regarding money management skills and be trained to plan for their future towards economic growth and stability.
Statement of the Problem
The researchers of this study entitled An Investigation on the Financial Literacy Among Glendale High School Students aims to determine and analyze how financially literate Glendale High School students are. Proportionately, the study's purpose is to enumerate the factors that influence the students’ financial literacy and find out Glendale School’s financial education plan for the students and its proficiency and effectivity in terms of its implications and assessment to the students. Thus, this study may comprehensively inform the institution about the financial literacy of its students and propose recommendations for the improvement of the financial education in the institution.
Furthermore, this study attempts to answer the following research questions:
1. How financially literate are Glendale High School students?
2. What are the factors influencing the respondents’ financial literacy?
3. Does Glendale School incorporate and teach Financial Education to its high school students?
Technical Definition of Terms
This section states and defines the specific terminologies used in this study which the readers may find unfamiliar or difficult to comprehend. The words defined below might either have a profound definition or are defined by the researchers. The following are the key terms utilized in this study:
● Financial Literacy- refers to the awareness and ability of the respondent to critically accomplish proper financial decisions such as saving, planning, debt, and expenditures
● Financial Inclusion- a term used when an individual purchase and engages in a financial product/service such as savings account, credit card, loans, and investments resulting in being part of the country’s financial sector
● Cycle Optimization Process- the repetitive financial occurrences and practices that an individual/student experiences and makes throughout his/her lifetime for the betterment of his/her future
● Parental Modeling- is associated when parents teach and influence their child/children to make proper financial choices and decisions in terms of saving, spending, and investing
● Personal Finance- refers to the financial practices of the respondent such as saving, spending, and debt
● Financial Education- teaching and assessing individuals especially students regarding basic and complex financial concepts including cost and benefits, investments, planning, saving, and creating a bank account
Theoretical Framework
This section consists of the used theories by the researchers which were used to carefully discuss, explain, and analyze the data and results of the study.
Situated Learning Theory
According to the article of Cullata (2015) entitled Situated Learning (J. Lave), situated learning theory was conceptualized by Jean Leave and he argues that learning is a function of the activity within a context, culture, and environment, hence being in a situation. Unlike with the concept of knowledge, it is abstract and out of context. One of the vital element of this theory is social interaction or collaboration which let students engage in a “community of practice” and in the result, beliefs and behavior are learned. Correspondingly, the situated learning processor also known as legitimate peripheral participation starts when the student is a beginner in the community and as soon as the student is in the center of learning, he/she grows into an active and engaging person to the culture. Thus, the learning of the individual is described as unintentional and not fixed. Respectively, the theory focused on the knowledge acquisition of a learner based on the environment setting and application and the skills learned such as problem-solving skills. Although, in situated learning, the student learns from an expert.
Also as indicated in the article by Northern Illinois University titled Situated Learning, the theory is associated with learning from real-world activities and putting a value to it which demonstrates that learning process is within a teaching environment. Thus, the learner is able to address real-world problems and he/she is able to create his/her own knowledge based from experiences. In result, the learner applies critical thinking and kinesthetic abilities and motivates the community to do the same. All in all, the theory emphasizes that the student is able to tap the foundation of their knowledge, recognize the setting/situation, and transform into a member of a community.
In connection with the study, the students are situated in a family environment wherein the family members share or teach others about their beliefs and experiences regarding finance. Primarily, the parents, being the expert, may influence the student’s mindset in saving, budgeting, and spending, however, it depends on how positive or negative the parent’s influence are to their child. Correspondingly, the student communicates and engages with the family members to acquire information about financial plans either simple or complex ones. As the student learns from his/her family members, he/she transforms into an individual educated with personal and family finance based on existing culture of the family or community. Furthermore, from the family setting, they experience real situations that involve money such as saving funds for personal or family needs and recognizing financial consequences. However, the students are not only situated in a family setting but also inside the school. There is a possibility that the students learn essential information from their teacher or adviser regarding setting priorities, saving, and the like. Experts in the school may deepen their knowledge and extend their knowledge of the students which had started at home. Thus, the respondents are both situated inside their home and school where they learn the financial beliefs and perceptions of the experts and become literate of making proper financial decisions and planning.
Behavioral Finance Theory
In terms of making rational choices, the theory called the behavioral finance theory states that an individual with the influence of information and characteristics, can alter the financial decision and learn from the consequences according to the article written by Swiss Asset Management (2018) titled 11 Most Important Concepts of Behavioral Finance Theory. Correspondingly, an individual is aware of his/her consumer behavior which is influenced by other people and sources of information. However, he/she believes that the market itself is rational and prices speak a story or value but still acts passively. The theory also emphasizes that in every individual, he/she consists the traits of an economist which can be influenced by influences such as family, friends, and workmates. With these influences, the individual form biases and may create uncontrollable decisions, though there is no evidence that when a person accomplishes a successful task, he/she will be successful in everything else. Respectively, if an individual wants to make rational choices, he/she must remove emotions and replace it with facts and statistics when making financial decisions. More importantly, based on the work of Kishore (2004) titled Theory of Behavioral Finance and its Application to Property Market: A Change in Paradigm, the theory suggests that an individual must update his/her belief correctly and be knowledgeable of the standards in making sound investment decisions. By narrowing his/her financial choices and knowing how to maximize, he/she is being rational. In contrast, the individual may be negatively influenced by biases regarding how they make decisions.
In line with the study, the extent of the financial literacy of the respondents is also measured through their rationality in understanding their beliefs and behaviors and making financial decisions. For them to be considered financially literate, they must know how to maximize their money and be knowledgeable of making the right decision. They must also learn from their mistakes and perceive the market as a setting needing rational actions. Nevertheless, the students acquire economist traits from influential people such as their parents, friends, and teachers. However, being a student and an adolescent, they are open to relying on their biases and committing mistakes. There are possibilities that a student rely solely on emotions or stick with facts and statistics, which is more beneficial for him/her. Nevertheless, the respondent must improve his/her financial beliefs positively and set financial standards correctly to further educate himself which is beneficial to his/her future work life and family.
Rational Choice Theory
In correspondent to the behavioral finance theory, the rational choice theory also focuses mainly on the individual himself. As argued by the article of the University of Regina (2000) titled Rational Choice Theory (RCT), the process of the theory begins with the individual and his/her interests or perceptions in a certain area. The theory highlights the concept of individualism. Accordingly, the individual has his/her own social interactions and individual actions, and are influenced by their own concerns and norms wherein it can be his/her welfare. Furthermore, as an individual, he/she is composed of his/her own characteristics wherein it influences his/her own rationality in making choices, in the study's case, making financial decisions.
Also, indicated by Ernst Heinrich Weber, a German physician in the article of the University of Toronto titled Assumptions of Rational Theory, the rationality of an individual is brought up due to the existing technologies and upgrades in the modern world. Thus, these can be utilized for the individual to make efficient and logical choices towards a goal. In addition, the individual, having his/her own behavior, forms an orientation within the interactions and choices accomplished. Moreover, with applying the theory, an individual creates an interpretive understanding, social actions, and its outcomes and effects in a particular situation.
In the study's case, the students have their own mindset regarding financial habits and practices personally and for the family. The study itself gives emphasis on the student itself in terms of their financial literacy and how aware they are about it. Situated inside the school and their home, he/she is influenced by other norms and perceptions, however, he/she has the authority to act and decide rationally when making financial decisions. Students are also likely to interact with the family and its members such as asking for daily/weekly allowance or asking their parents to buy a particular item for school purposes or personal use. Proportionately, due to the modern gadgets, the students are influenced by various references and sources such as-as social media which can change their financial decisions. With the financial practices and decisions they perform, outcomes and consequences show depending on how rational and logical their decision is. Nevertheless, the choices and practices that a student does is a manifestation of his/her individualism and understanding of how important and crucial finance is to their present and future life.
Conceptual Framework
The researchers followed the created paradigm below for the purpose of the careful and successful comprehension of the topic, systematic methods and procedure, and analysis of data. Respectively, in this section of the chapter, the elements of the paradigm are explained thoroughly.
Firstly, the main focus of the study is the financial literacy of Glendale High School for they are the determinants of the results and analysis of this study. However, their financial literacy is affected by two contexts: socio-economic and educational.
In terms of their socio-economic context, their families and friends’ financial practices and experiences help shape the respondents’ financial literacy. In line with their income/allowance, expenses, and savings, they are able to plan, adjust, and decide on financial situations such as “How much should I save?” or “What do I need to buy?” Hence, the family and even friends are influential people that can possibly teach the respondent about making sound financial decisions. In addition, it is in line with the Situated Learning Theory wherein the respondents are situated in a family community and they learn financial behavior and beliefs.
Correspondingly, the financial literacy of the respondents is affected by their educational context which includes the high school teachers and administrator. These constituents, possibly teach high school students concerning saving, budgeting, and spending. This also discussed on how the institution teaches the topic to the students through the use of materials, projects, and activities. Proportionately, the administrator and school teachers are responsible for the curriculum and its system. Thus, they are interviewed by the researchers to further investigate the school’s integration of financial literacy to its curriculum. Furthermore, the paradigm is utilized by the researchers and illustrates that the financial literacy is affected by their family and friend’s financial culture and their educational background which are influenced by the school teachers and administrator. With this, the researchers surveyed Glendale High School students and interviewed Glendale High School teachers and the school administrator.
CHAPTER II
REVIEW OF RELATED LITERATURE AND STUDIES
In this chapter of the study, it consists of various references such as news articles, academic articles, journals, and thesis that the researchers utilized to better understand and determine the content of the study entitled An Investigation on the Financial Literacy among Glendale High School Students.
The importance and implications of financial literacy to adults
Focusing on the crucial aspect of financial literacy, it demonstrates how it affects the welfare, policies, and the behavior of consumers. Such as the report of Lusardi and Mitchell (2013) titled The Economic Importance of Financial Literacy: Theory and Evidence which defined financial literacy as an individual’s ability to analyze economic information and critically decide about financial planning, wealth accumulation, pensions, and debt. In this way, the individual is able to improve his/her life cycle optimization process and support his/her financial behavior. Proportionately, financial decisions regarding savings may be affected by consumer preferences, economic environment, and social safety net benefits. Hence, financial literacy and the factors enable the individual to formulate and accomplish proper saving and spending plans through considering the existing financial markets and his/her purchasing power. However, the majority are not aware of the concept of financial knowledge and the skills of making and performing complex financial plans. Furthermore, acquiring financial knowledge and being literate on the subject means considering the existing socio-economic factors and how it is used it to improve their financial support, abilities in securing savings and debts and creating financial plans which is a complex facet of handling money and knowing its importance.
However, the extent of student’s financial literacy may vary from each grade level and his/chosen course. A research was conducted by Bowen (2002) entitled Financial Knowledge Of Teens And Their Parents which took a peek at the financial knowledge of 64 high school students “teens” that participated at the governor’s school program at The Pennsylvania State University in 1993. The parents of the 64 students were also involved in the said study. The study found out that 37% of the teens allocated most of their allowance and earnings for entertainment purposes, ‘savings’ is only second to entertainment having only 23% of the population responding with the said category. Part of the 5 basic human necessities, ‘clothing’, gained 21% of the population. While both the category of ‘food/snacks’ and ‘car expenses’ received 5%, and the least having only 2% is the category ‘personal care’.
Part of the study is checking the financial background of both teens and parents. The study revealed that 87% of the teens and parents group have a savings account. Half of both the teens' group (55%) and parents group (45%) own a U.S. savings bond, an investment considered to be the safest. And finally, 10% of the teens have credit cards while 89% of the parents do too.
The results of the study show that teens and parents in the United States of America still value and prioritize the concept of saving up for their future, even though the survey shows that teens spend most of their finances for their entertainment, they still have the concept of saving up being the second priority which is not recommended, but still acceptable.
The study also gave the teens and parents ‘money knowledge questions’, even though the parents’ overall performance as well, having a 100%. Thus, they have the highest percentage of the population answering correctly the basic concepts in finance, and 85% on the higher concepts. The worrying part is that the teens’ overall performance did not quite go well, with 87% being the highest percentage of the population answering correctly the basic concepts in finance, and only 43% on the higher concepts.
Correspondingly, the students’ characteristics and demographic background are factors that contribute on his/her financial literacy. As studied by Sarigül (2014) with his survey report entitled A Survey of Financial Literacy among University Students, it determined the extent of financial literacy among university students and its relationship to the students’ characteristics. It states that financial literacy is about comprehension of money and its everyday value including awareness of everyday financial situations such as insurance, credit, savings, investment risks, borrowing money, and market value which develop their wealth and financial security. In addition, the financial skills that the students used would be helpful in making proper financial decisions and decrease the risk of avoiding and solving problems. Thus, young adults must develop a profound financial knowledge that is beneficial to their present, future family, and professional life. If not, they are likely to experience financial problems during school life and other financial hardships such as isolation, emotional stress, depression, and lowering of self-esteem yet not limited to future marital decisions for instance, divorce.
For that reason, the study focused on 1,099 students and measured their financial literacy through a questionnaire that consisted of 29 multiple-choice questions regarding the respondent’s personal finance and demographic data. According to the results, 0.65% questions of the whole survey were answered correctly by the respondents. Specifically, the level of their financial literacy is measured by five sections: general knowledge (0.63%), saving and spending (0.75%), banking (0.61%), risk and insurance (0.69%), and investing (0.56%). All in all, the level of their financial literacy is described as poor. Results also show that respondents who were enrolled in health/ educational sciences courses are unaware of their personal finances compared to those enrolled in social sciences courses that were more knowledgeable on the area. Proportionately, respondents who studied in the business/economics school were better-rounded on the area than respondents who studied in non-business/non-economics schools. In addition, those respondents’ parents who own a secondary/elementary school diploma are more educated in all sections. Furthermore, the key findings were that the respondents need to enhance their awareness on their personal finances to refrain from committing mistakes in the real world. If not, it would be a problem for their future in terms of managing their finances and of the society.
Additionally, several studies have also shown that individuals express different money behaviours and beliefs because of the different ways of their family’s money management. According to a journal article by Hira (1997) titled Financial attitudes, beliefs and behaviours: differences by age, among their 529 Iowan respondents (aged 18 to over 61), family, in general, is the most important source of influence for their financial attitudes and beliefs. Although a small population of respondents has stated that school, television, and books are also important, a large fraction of the younger age considered those as strong influential sources. It also states that family finances were not commonly discussed and argued about. However, according to the respondents who reported to discuss finances in their households; mothers are more likely to talk about it with their children than fathers do. This shows that buying behaviors vary between age groups and the economic and market environment affect how an individual values money.
Proportionately, a research entitled Financial Socialization Family Pathways: Reflections from College Students’ Narratives, conducted by Solheim, et al. (2011), aims to learn about the financial practices and attitudes that 217 college students acquired by the concept of financial socialization with their families. The research points out that many studies suggest that an individual’s family is the biggest influencing agent affecting an individual’s financial habits and attitudes.
The study revealed that the most common money or financial concept that they have acquired from their family is ‘saving’ with 93% of the responses gathered by the researchers. 53% said that they have learned this by observing their parents or other family members, while 40% said that they have learned the concept by direct interaction (coaching or conversations about saving; parents suggested, promoted, and supported saving behaviors with their parents or other family members.
While students with parental modeling, adapted saving up with their parents’ financial habit and attitudes, students without parental modeling learned to save up because they learned from the mistakes other people or their parents made in the past. This is evident from one of the statements that a student participating in the study said, “This is how I learned financial planning. I saw the mistakes they made and slowly began to think about long-term goals and savings.” - [Student 161].
Parents coaching their children to save up employed different strategies for the said goal. These strategies vary including raising conversations, invoking a sense of guilt about spending versus saving up, and even imposing a rule about savings. Some of the rules were saving up to reach specific goals and saving a specific percentage of the allowance, gifts, and other forms of finances that they receive wherein all the students remember their parents being strict with the implementation of the said rules.
Only 9 students or 4% of the participants said that their parents or other family members taught them about saving up for their retirement and about investing which is not a good figure to look at.
When it comes to money management, 68% of the students learned money management by observation, while 32% learned from conversations made between them and their parents or other family members. Most of the students observed money management behaviors within their households and these management behaviors are prioritizing needs over wants, budgeting, tracking expenses, and reconciling checking accounts. While the conversations made between the students and their parents or other members of the family are usually centered on paying bills on time and keeping track of one’s spending.
Only 18% of the students have said something about the management of credit resources, most of this 18% observed their parents’ responsible use of credit card, having them pay credit card bills in full each month, used credit only when necessary, and maintained good credit records and scores. Some students also received the ‘credit card talk’ before they headed to college and they were told by their parents to barely use a credit card or use it only in times of emergency. Poor use and management of credit resources inside the family also helped the students learn about the importance of managing these resources, either from the experience of their parents or siblings that own credit card(s).
The condition financial education in the Philippines
Since 1994, the government has encouraged Filipinos to save up, through Proclamation no. 380, s. 1994. Then, Philippine President Fidel V. Ramos declared the period of June 30 to July 06 of the year 1994 and every year thereafter, as a National Savings Consciousness Week. He also directed the Department of Finance, Central Bank of the Philippines, and the Department of Education to take all necessary action to implement the said proclamation. On June 29, 2013 based on the Department of Education’s website, the Department of Education together with the Central Bank of the Philippines encouraged students to ‘make saving a habit’. In the online article, the two government offices made students aware of the importance of developing savings consciousness so that they have something rely on in times of need. Former Department of Education Secretary Armin Luistro stated that “Our students should not underestimate the impact of saving loose change and excess coins from their daily allowance. If they make it a habit, without realizing it, they may have already saved enough to buy what they want or need” from the statement of the former secretary, we cannot say that high school students does not have the capability of saving up for themselves for they do not earn any money yet. As the secretary said, they can also use loose change for saving up something for their future, for a better practice, they can allot a specific amount of money from their allowance to save.
Although the Philippines is one of the fastest growing economies if its citizens do not recognize the importance of money and the disadvantages of bad money habits, the financial condition of the country will not be stable. This was mentioned by Go (2017) in the article entitled State of financial education in the Philippines, in order for the country to be financially stable, organizations/agencies must regulate financial education in the country. Government agencies such as Central Bank of the Philippines, Department of Finance, Securities and Exchange Commission, National Credit Council, Insurance Commission, National Anti-Poverty Commission, and DepEd, had developed programs to improve the financial literacy of the citizens yet it is not enough to deepen the extent of the citizens’ financial knowledge. Thus, the public and private sectors must work together to build effective financial education programs and notable projects for the mission to be accomplished.
Subsequently, statistics show that Filipinos lack formal education on financial concepts. According to the key findings of the World Bank (2014), 20 million Filipinos had saved money yet only half had bank accounts. This means that the Filipinos are not financially included in their own country during the year 2014. In terms of plans, the Philippines does not possess any strategy for financial education and literacy during the year 2015 which shows the low-level of preparedness and initiative of the country to teach the type of education based on the findings of the Asian Development Bank (2015). Accordingly, in 2016, the Central Bank of the Philippines published the national strategy on financial inclusion and demonstrates that institutions must both strive to improve financial services and financial literacy in the country. Lastly, according to the rating services of Standard & Poor’s (2016), only 25% of Filipinos are considered to be financially literate, leaving 75 million Filipinos not being knowledgeable of inflation, risk, diversification, insurance, compound interest, and bank savings. Furthermore, the findings of the mentioned agencies suggest that Filipinos, especially employees, need to be financially literate in order to avoid financial challenges and financial education must be intensified for the benefit of the youth and the upcoming generations.
For Filipino educators, according to a news article by Rappler (2017) entitled Briones eyes mandatory financial literacy workshops for teachers, Philippines’ Education Secretary, Leonor Briones, stated that teachers are required to take financial literacy workshops and be rational in handling their finances as they will be teaching children and must set a good example for them. Knowing that recently, Filipino teachers have piled a total of ₱123 billion in debt from the Government Service Insurance System (GSIS) loan programs in December 2016 and owe around ₱178 billion to private lending institutions, Briones stated that learning financial management is a crucial step to take since financial education will soon be integrated into K-12 subjects that teach related competencies in compliance with the Republic Act No 10679 or the Youth Entrepreneur Act.
As stated earlier in the study, policy makers must take action to promote financial literacy in their country, such as integrating financial literacy lessons in the education curriculum is an effective method. This is demonstrated by a teaching guide entitled Edukasyong Pagpapakatao: Teaching Guide on Financial Literacy has written by Department of Education (DepEd) with the help of the Central Bank of the Philippines (CBP) which is primarily for school administrators, teachers, and students to develop their economic values on saving for economic development and growth. The guide was created due to Central Bank of the Philippines survey results that less than 5% of Filipino children save money daily. Proportionately, the guide caters to public school teachers who in turn will promote the concept and practices of saving and money management to elementary students.
The guide is divided into two; the first part focuses on how teachers can accomplish their teaching tasks and financial concepts, contexts, and visuals are shown through a matrix, which can also be found in the Philippine Elementary Learning Competencies of Edukasyong Pagpapakatao. The second part includes lessons for each grade level, the core message(s), related value, and materials. The guide has 11 lessons and focuses on the following concepts: saving, importance of money, budgeting, differentiating needs and wants, proper usage of money, economic development and growth, entrepreneurship, and laws on the economic lifestyle of the Filipino community. Subsequently, two other guides were made (1) Edukasyong Pantahanan at Pangkabuhayan: Teaching Guide on Financial Literacy and (2) Sibika at Kultura/Heograpiya, Kasaysayan at Sibika: Teaching Guide on Financial Literacy which are both in line with the aim of improving the pupil's saving and budgeting practices and national economy.
Correspondingly, Department of Finance is part of the advocacy in improving the financial literacy in the country; it is shown through the financial literacy programs they made in the earlier years. Stated in the article of the Department of Finance (2016) titled The Philippines’ Financial Literacy Program, the department created a comprehensive program which encompasses policy makers, regulators, microfinance providers, and clients to ensure the observance of the Philippine financial inclusion policy. Specifically, two of their programs titled Microfinance Program started in 1995, and Microinsurance Program in 2010. Both programs were created with the help of stakeholders and representatives responsible for the program details. As a result, eighteen years after the launch of the Microfinance Program, the department had 10 million micro borrowers while the Microinsurance Program, after five years since its beginning, has provided 37 million Filipinos with microinsurance products. This proves that the programs were effective for the financial inclusion of the country and economic growth. In addition, the department recommends Filipinos ages 5-100 years old, to participate in the program.
Moreover, the programs of the department aim to improve the country’s financial stability and for stakeholders to make rational choices by managing their funds and businesses properly and avoid risks (frauds and dubious deals). Primarily, with the 50.6 gross savings-GDP average of the years 2005-2015, the efficiency of the financial management in the country would increase up to 10% and GDP growth up to 5%. Furthermore, they have created a national strategy which was implemented along with the issuance of regulations and memoranda of agreement for coordinated policies and program. Additionally, the department also conducted seminars for overseas Filipino workers and young Filipinos who are part of the business process outsourcing industry of the country, not to mention that the department also has financial education in schools.
Likewise, Filipino students, specifically senior high school students, will be provided with a financial education teaching financial management and investment through the program created by the Department of Education. As indicated in the article of the Department of Education (2016) titled Basic education curriculum to include financial education, the department being a member of the National Strategy for Financial Inclusion, its committee had created the program that catered to the first two batches of graduates of the senior high school. The department also incorporated financial education and consumer protection to the K-12 system, created programs for teachers, and constructed a system focused on the financial inclusion for students and schools in urban and remote rural places.
For this to be accomplished, DepEd Undersecretary for Curriculum and Instruction, Dina S. Ocampo stated that the department must form sets of financial literacy modules for the students wherein each session lasts one to two hours per week. Respectively, the program is in accordance with the framework arranged by the Organisation for Economic Co-operation and Development’s Programme for International Student Assessment and soon be employed in K-12 subjects such as Edukasyong Pantahanan At Pangkabuhayan and Technology and Livelihood Education. As a result, the department believes that either the graduates of the senior high level will soon be successful in finding their own job after high school or prosperous with their future enterprise. In educating them early about money, saving, and consequences in financial decisions, the students are aware on budgeting, financial products/services (investments), and establishing financial goals.
Filipinos and their personal financial abilities
The knowledge-based economy and the Internet age create many challenges for the traditional education system. Particularly, the new era evolved the skills and knowledge the students need when they graduate from school and begin participating in the social and economic life.
According to The Philippine Star article by Talavera (2017) entitled Financial literacy crucial to tapping millennials, Philam Life conducted a study which concludes that Filipinos are highly aware of their health status but are less proactive about improving it. This shows that Philippines, as a young consumption-driven workforce, might not be equipping its citizens with necessary knowledge, ability and tools to manage personal wealth with a high degree of competency and heighten the efficiency in the demand for best financial products. Notwithstanding, a lot has been done to create awareness and encourage the present Filipinos on investment, saving, and spending culture. It also states that the millennial generation face more financial responsibilities as they have to fix the previous generation’s (specifically their parents) failure in creating a retirement plan. Thus, financial planning is beneficial in teaching individuals to be financially responsible to keep track of their financial goals and secure their future in the long run.
An experiment was conducted by Tang Philippines involving 100 Filipino kids and ₱500. According to smartparenting.com, the experiment aims to know the financial attitudes of these young kids in a time where the world ‘spoils’ them with more accessible and instant forms of entertainment, and when the environment around them promotes the idea of instant gratification.
The process of the experiment was accomplished in a controlled environment that imitates the idea of a children’s ‘shopping paradise.’ Each participant was given ₱500 to spend however they wanted. The place was set in such a way that the kids was given the freedom to choose on how to spend their money, the options given were to spend their money for toys, school supplies, and snacks. They were also given the freedom to donate or keep their money if they wanted to.
However, before the experiment started, the mothers of the participants were asked on their opinions about how the kids would spend or keep their money. More than half of them said that their kids will most likely spend the money on toys and snacks, in their belief that they are too young for making such responsible decisions. But they turned out to be wrong, 99 of the participants kept most of their money. Many of them also donated to charity, and half of the participants availed school supplies. Only one participant used all of his money to buy food and toys, but they were gifts for his siblings. Therefore, the money was spent for the purpose of giving a gift to his/her family member.
This experiment shows that the Filipino youth still recognizes the importance of money, the necessity of saving up and limitations of spending money.
Additionally, financial knowledge may be altered depending on the person’s age, financial skills, and behavior to perform sound financial decisions. In local studies, the financial capability of Filipinos were reported through the work of the International Bank for Reconstruction and Development and The World Bank Group (2015) titled Enhancing Financial Capability and Inclusion in the Philippines - A Demand-side Assessment. First, the World Bank defined financial capability as the individual’s ability to perform his/her financial interest and considering the existing socioeconomic and environmental conditions. Accordingly, it includes the individual’s knowledge, attitude, skills, and consumer behavior. With an individual’s level of financial capability, they are able to understand, select, and use appropriate financial services.
Based on the 3,000 Filipino adults surveyed, 41% of the sample population did not avail any commercial or financial product such as mobile financial services, loans, pensions, car insurance, and the like. This illustrates that almost half of the respondents do not participate in the financial sector of the Philippines such as using or accessing financial products/services. Also, respondents who do not own any bank account are reported to: (1) have no money which equals to 20%, (2) he/she does not need it which accumulates to 18%, (3) he/she does not trust these type of financial services which equals to 17% and (4) he/she does not have access to the type of service which equivalents to 16%. With the above key findings, it shows that the respondents have applied their financial decision and their own rationale not to avail financial services. Nevertheless, their financial inclusion is low for they do not engage with financial sectors in the Philippines.
In terms of the respondents’ financial knowledge, out of the 7 questions regarding financial literacy of the questionnaire, averagely only 3.2 of those were answered correctly. Meanwhile, 77% of the respondents were able to accomplish simple divisions and 50% of the respondents were able to perform computations regarding simple interest and inflation and knew the importance of insurance. In addition, results show that the respondents received low scores on their behavior regarding budgeting such as the inclination to save (46), budgeting (44), living with means (43), refrain from overspending (42), and monitor expenses (38). However, the respondents showed strengths in other fields specifically planning for unexpected expenses (67), achievement orientation (66), and farsightedness which is defined as the act of approving or disapproving statements such as “I live for today” and “The future will take care of us” (64). Furthermore, the key findings for this aspect suggest that adults must consider engaging in mass media and educational entertainment to improve their financial capability. Also, the report recommends that a curriculum focusing on financial education must be incorporated and be made as a core-subject for school-based financial education programs.
Conclusion
An individual’s ability on finance is measured and determined in various ways based on various references. The researchers retrieved numerous international studies regarding financial literacy and its importance. From the report of Lusardi and Mitchell (2013), the study gave a precise definition of the term ‘financial literacy’ which helped the researchers understand what the term is all about and how the extent of the respondents’ financial literacy will be measured. Financial literacy is not only about making rational financial decisions, but also how an individual visions his/her future and professional life, either positive or negative. Proportionately, the researchers agree that making sound choices will be beneficial for students for it will develop his/her cycle optimization process towards efficiency and productivity which could be shown through proper spending, budgeting, and saving practices. Meanwhile, the study of Sarigül (2014) formed sections to structurally measure the financial knowledge of university students which is a strong foundation of his study. In this way, the author was able to give comprehensive and detailed information about the financial abilities of the students. Although the results show that the students’ knowledge is poor, the statistics must be used to further make appropriate financial programs. Nevertheless, the study and results manifested that the financial capabilities of an individual varies from age and his/chosen course.
With local studies, the researchers collected articles mostly concerned on the development of financial projects and programs created by agencies such as the Department of Education and Central Bank of the Philippines. Proportionately, the Department of Education showed that the department, together with other agencies, is taking concrete actions to further improve the financial literacy of the Filipinos, especially students. Thus, the researchers were given a background on the processes and steps that the government does for the betterment of the knowledge of the citizens. For this to be fully accomplished, the researchers support and agree that the Central Bank of the Philippines and Department of Education must work together to form education programs about financial concepts such as saving and budgeting according to the article of Go (2017). Proportionately, the statistics from the World Bank, Asian Development Bank, Standard & Poor’s, and Central Bank of the Philippines must be utilized to motivate policy makers to form-fitting projects that aims to develop the financial knowledge of Filipinos.
Complying with the Republic Act No. 10679 or also known as the Youth Entrepreneurship Act, it is a good evidence for the government to continually make efforts in making educational instruments.
Meanwhile, the three teaching guides that the Department of Education and Central Bank of the Philippines created must also be incorporated to both public and private schools. It must be taught from kindergarten up until Grade 12 to increase the probability of improving the development of the country. Accordingly, the Department of Education also created a program for senior high school students in teaching and motivating them to create their own business or be an effective employee in the future. However, the department must be aware of future socio-economic factors such as money, education, abilities, and behavior. These factors may be influenced by their parents, friends, colleagues, and internet sources.
Being that high school students are included in the millennial generation, they are in need of high-quality financial education to correct their parents’ financial mistakes. Thus, more advanced abilities are needed to be taught to them. Lastly, the survey report of the International Bank for Reconstruction and Development and World Bank (2015), states that Filipinos adults are not financially included and may suggest that they need further education and counseling on financial services such as investments, savings, and loan. Despite the numerous programs and projects made, the researchers conclude that the country needs to construct effective financial programs for the future of the citizens and of the country.
Furthermore, the researchers collected adequate resources about financial literacy, globally and locally. The researchers had enough time to gather reliable sources which fit the content of the study. However, most of the local references were about the programs made by government agencies and few were about the level of financial literacy of Filipinos. Nevertheless, the collected articles demonstrated that the government is making an effort to improve the financial abilities of Filipinos. Also, there were no current Filipino books about the financial literacy on the Philippines and the researchers failed to find articles or studies regarding the financial literacy of high school students’ either in Quezon City or of the country. Still, this chapter of this study was successfully made through the gathered references which showed that financial literacy has many facets to be looked upon which gave the researchers an idea of an intensive and inclusive understanding of the topic.
CHAPTER III
METHODOLOGY
This chapter aims to enumerate and describe the research methodology that the researchers used for the study entitled An Investigation on the Financial Literacy Among Glendale High School Students in order to determine how financially literate the respondents are.
This chapter also shows the number of respondents, research methods, instruments used to gather data and procedure on analyzing the data.
Research Design and Method
This study is both a quantitative and qualitative research. Quantitative for the study attempts to measure how financially literate Grades 7-11 Glendale School students are through the use of a questionnaire. Proportionately, the research is classified as a quantitative research for the researchers uses systematic, empirical, mathematical, and statistical methods to successfully compute the data. In addition, the used questionnaire serves as the foundation and support for the results and conclusions of the study.
Meanwhile, the study is categorized as a qualitative research for it describes the financial literacy of the respondents. Subsequently, it also explains the proficiency and effectivity of financial education in Glendale School to the students.
Population
The researchers used the sampling method to cover all high school students thus the study comprises students from Grades 7-11 of Glendale School Inc. located in Quezon City. Specifically, twenty-one students (21) from Grades 7 and 10, fourteen students (14) from Grade 8, twenty students (20) from Grade 9, and five (5) students from Grade 11. All in all, the number of respondents for the high school population is eighty-one (81). Additionally, two (2) Glendale High School teachers and one (1) Glendale School Administrator are part of the respondents for the purpose of interviewing them on the financial education in the institution.
To acquire essential information and pieces of evidence about financial literacy in the Philippines, the researchers interviewed two (2) Financial Experts.
Credentials of the Interviewees
First, the researchers interviewed one (1) Glendale School Administrator, Ms. Leilani Juachon who is the External Student’s Affairs of Glendale School Inc., in order to gain information concerning the financial literacy of Glendale High school students and the institution's financial education. Correspondingly, the researchers interviewed two (2) Glendale High School teachers, Mr. Arnold Antiporda, the Academic Coordinator of Glendale School Inc., who is currently teaching World Culture, History, Philosophy, Economics, and History to Glendale high school students and is taking masters in Educational Management at the Polytechnic University of the Philippines. He also studied Organizational Management at Universita di Bologna. Meanwhile, Mr. Aldrich Juachon is currently teaching Mathematics, Technology and Livelihood Education, and Physical Education and studied Pre-Communication at the University of Santo Tomas. Additionally, he studied Marketing at Far Eastern University and Secondary Education major in Mathematics at St. Mary’s College.
For the two (2) Financial Experts, the researchers interviewed Ms. Sherryl Uy and Mr. Harold Gomes. Ms. Sherryl Uy graduated with the course, BS Business Economics at the University of the Philippines and took master studies in Business Administration at the University of the Philippines. She worked as a Sales Manager at Ubix Corporation in Makati City, Assistant Professor of Business Management at De La Salle University, Relationship Manager at Bank of the Philippine Islands in Makati City, Assistant Vice President at the Hongkong & Shanghai Banking Corporation (HSBC) in Bonifacio Global City, and is currently a Senior Assistant Vice President at Banco De Oro Unibank Incorporation in Makati City. Meanwhile, Mr. Harold Gomes graduated from the University of Goa in India and worked as a Team Leader of Financial Analysis at Bank of Mellon India. He also worked as a Manager of Business Support at HSBC Manila and is currently an Assistant Vice President in HSBC Hong Kong.
Instrumentation
For this study, the researchers used questionnaires to determine how financially literate the respondents are. The instrument is used for it measures the relation of sociological and physiological elements/factors (Ricafort, 1983).
The researchers formulated the questionnaire through employing the World Bank’s Questionnaire for Financial Literacy Program in Russia dating June 2008. This questionnaire has been utilized to determine the financial literacy in Russia and their financial capability programmes. However, the researchers did not use all of the questions from the original questionnaire, which has 51 questions. Thus, the researchers only used some of the questions from the original questionnaire and revised the questions and choices for the research questions to be answered successfully. In addition, the researchers added necessary parts specifically the respondents’ personal information and family background.
In result, it is divided into six (6) parts: first part required the students to indicate their personal information such as name (being optional), grade and section, age, and gender. Second part determined the demographic data of the respondents in terms of the number of households, highest educational attainment of parents and their occupation, and range of family’s monthly income. Meanwhile, the third part focused on the awareness of the respondents on financial terms such as financial literacy, credit, and debit. Similarly, the fourth part determined if they have encountered the terms in school and if financial literacy is being taught in school. In terms of their family’s financial experiences and practices, the fifth part is about the family’s income, investment/savings, insurance, expenditures, budgeting, and how they handle financial situations. Last, part six is regarding the respondents’ personal financial experiences and practices essentially on their source of finances, financial services (insurance and credit card), income, expenditure, budgeting, and debt.
The researchers also conducted a semi-structured interview with the one (1) Glendale School Administrator and two (2) High School teachers to better understand and determine the financial literacy of high school students and the financial education of the institution. However, one of the interviewed high school teachers teaches the subject, Technology and Livelihood Education, for the purpose of knowing how financial literacy is integrated into the curriculum, specifically in the said subject.
Likewise, the interview with the two (2) Financial Experts is also a semi-structured interview and was done to give depth on the financial literacy of high school students and its importance and the financial education in the Philippine education system. The interview was accomplished through email due to its urgency and convenience.
In addition, the researchers accomplished a non-participant observation through the use of convenience sampling wherein one (1) respondent was chosen for each high school level. The researchers specifically observed respondents who recently bought in the school’s canteen. Proportionately, the researchers asked a series of question regarding their allowance and its allocation, savings, debt, and frequency of buying in the canteen. All in all, the researchers observed four (4) respondents in order to collect additional data.
Data Gathering and Procedure
In the process of distributing the questionnaires to the respondents, the researchers asked the respondents for their time to answer the questionnaire. Meanwhile, for the interview with the Glendale School Administrator, High School teachers, and Financial Experts while they are being interviewed, the researchers conducted note-taking for the purpose of follow-up questions and clarifications. Likewise, note-taking was also done in the non-participant observation.
Furthermore, the collected information from the questionnaire and interview went through the process of organization of statistics and analysis.
Data Analysis
To structurally and systematically show the statistics regarding the respondents and their answers on the questionnaire, the researchers used profile matrix and proximity matrix. For the profile matrix, the age, sex, section, and family background of the students are indicated. Respectively, the researchers used the statistical software platform IBM SPSS to successfully determine the frequency, percentage, and T-test of the answers in the questionnaire. After these have been computed, it is shown in statistical tables.
CHAPTER IV
RESULTS AND ANALYSIS
This chapter introduces and describes the results of the survey and interviews as well as the primary people involved in conducting this research.
Frequency
In this part of the paper, the researchers will discuss the results of the survey that they have conducted, and analyze the following in accordance with the results.
The table above shows the breakdown of the population of the respondents of the survey that was conducted by the researchers. The table shows that 21 individuals or 25.9 percent of the respondents are Grade 7 and Grade 10 respectively. Meanwhile, 14 individuals or 17.3 percent of the respondents came from Grade 8. Grade 9 students cover 24.7 percent of the total number of respondents with 20 individuals. And lastly, Grade 11 students cover 6.2 percent of the total number of respondents with 5 individuals. This covers the whole population of High School students with a total number of 81 individuals.
The table above shows the breakdown of the respondents in the survey in terms of age. 5 individuals or 6.2 percent of the respondents are aged 12. While 23 individuals or 28.4 percent of the respondents of the survey are aged 13. Next, 14 individuals or 17.3 percent of the respondents are aged 14. 22.2 percent or 18 individuals that were respondents of the survey are aged 15. 16 percent of the respondents were aged 16 consisting of 13 individuals. 6 individuals from the survey were aged 17, this makes up 7.4 percent of the population. And lastly, 2 individuals or 2.5 percent of the respondents were aged 18.
The table above shows the breakdown of the respondents of the survey in terms of gender. The table shows a good spread of respondents by their gender, having 40 individuals or 49.4 percent identifying themselves as Male, and 41 individuals or 50.6 percent identifying them as Female.
The following tables show the results of the survey that was conducted, and with this, are the analysis of the researchers.
The next set of tables will reveal some information about the students’ or respondents’ family background.
Most of the respondents stated that the number of individuals in their household is 5, this has the highest percentage of respondents having 22.2 percent. Second to this with 18.5 percent respectively are both the answers 4 and 6 with 15 individuals responding with the said answers respectively. Meanwhile, the least answer to the question is 16 with 1 response accounting for only 1.2 percent of the total population of respondents.
The table above shows that most of the respondents don’t have any idea about the monthly income of their family. This can be considered as a sign of lacking awareness of their family’s finances. While the option ‘Below ₱25,000’ with only 4 respondents accounting for only 4.9 percent of the population of the respondents. This suggests that the majority of the students are not financially aware of the economic capability of their family since most of them said that they don’t have any idea on the monthly family household income.
The succeeding set of tables demonstrates the relationship of the students to some terms that are part of financial literacy.
Most of the students as shown on the table above, have encountered the term ‘Financial Literacy’ having 45 individuals or 55.6 percent of the population responding to ‘Yes’ when asked the question “Have you ever heard or encountered the term ‘Financial Literacy’?”. But this is not far from the number of individuals who responded ‘No’ with the same question, with 36 individuals covering for 44.4 percent of the total population of the respondents. Even though most of the students encountered the term ‘Financial Literacy’, most of them don’t know the meaning of the term, having 59 individuals or 72.8 percent of the population of respondents giving a feedback of ‘No’ when asked the question “Do you know what ‘Financial Literacy’ means?” The remaining 22 individuals or 22.7 percent of the respondents’ population responded with ‘Yes’.
For the term ‘Financial Literacy’, these numbers show that the students are only aware of the term and not knowledgeable about it. Being aware is different from being knowledgeable, being aware means that you know that something exists as defined by the Merriam-Webster Dictionary, while being knowledgeable, also according to the Merriam-Webster Dictionary, means having information or understanding something.
All of the students (81) as shown on the table above, have encountered the term ‘Credit’ and ‘Debit’ answering ‘Yes’ when asked the question “Have you ever heard or encountered the term ‘Credit’ and ‘Debit’?”. And most of them know the meaning of the said terms with 65 individuals covering for 80.2 percent of the total population of the respondents, answering ‘Yes’ when asked the question “Do you know what does ‘Credit’ and ‘Debit’ mean?”. While the remaining 16 individuals or 19.8 percent of the population of respondents answered ‘No’ when asked the question “Do you know what does ‘Credit’ and ‘ Debit’ mean?” when asked the same question.
For the term ‘Credit’ and ‘Debit’, these numbers show that the students are aware and knowledgeable about the said terms. As explained from the paragraphs before, being aware is different from being knowledgeable. It is good to know that most of the students know these terms because although they don’t know the term financial literacy, they still know some of the basic terms in the aspect of finances. This shows that it is possible that the students might not know financial literacy technically but they do know it conceptually.
The subsequent set of the table shows some of the experiences of the students inside the school when it comes to financial literacy.
39 individuals or 48.1 percent of the population of the respondents said that they have heard the term ‘Financial Literacy’ inside the school, while 60 individuals or 74.1 percent of the total population of respondents said that they heard the term ‘Credit’ and ‘Debit’ inside the school. The remaining 42 individuals that cover 51.9 percent of the population said that they did not hear the term ‘Financial Literacy’ inside the school, while 21 individuals that cover 25.9 percent of the population said the same thing about hearing the term ‘Credit’ and ‘Debit’ inside the school.
Why do the students are more likely to encounter the terms ‘Credit’ and ‘Debit’ in school that the term ‘Financial Literacy’. This is probably because, there is no specific subject that tackles financial literacy in the school, financial literacy as said by the teachers and administrators that were interviewed by the researchers, is only integrated with the other subjects that were being taught in the school, thus reducing the probability that the students may encounter the term ‘Financial Literacy’. But when it comes to the terms ‘Credit’ and ‘Debit’, these terms are key terms in the aspect of finance, as evidence, these terms were included in the list of key financial terms of the Australian government in their business portal. Since these terms are key terms in the world of finance, and everything, where money is involved so, is finance, then it is more likely for the students to encounter these terms, as these students already have bank accounts, credit cards, and debit cards, which will be revealed later in the result section of this study.
45 individuals or 55.6 percent of the total population of respondents said that Financial Literacy is not being taught in the school. While the remaining 36 individuals that cover 44.4 percent of the population said the opposite.
Again, as explained earlier, it is probable that the students are conceptually aware of financial literacy and not technically, therefore most of them said no when asked if financial literacy were taught in their school since the financial literacy is a technical term, most of them said no. It is better if they were asked if the certain concepts of financial literacy like credit and debit were taught to them, but due to time pressure, the researchers were not able to do so.
The majority of students or 20 individuals accounting for 24.7 percent of the population who answered ‘Yes’ from the previous question said that financial literacy is being taught through the school’s curriculum. While the minority or 9 individuals that cover 11.1 percent of the population said that financial literacy is being taught in school through the personal tips of the teachers. And lastly, there are 7 individuals or 8.6 percent of the population said that financial literacy is being taught in both ways.
Although the majority of the students said that financial literacy is not being taught in the school, 36 had said “yes”. A majority of those implied that it is being taught through the school’s curriculum. However, according to the interviews, it is only incorporated and is not a separate subject. Thus, incorporating it means that the teachers give the students tasks or projects concerning money management such as budgeting and profit. This is evident with their application in the Outreach Program and selling food also for the purpose of the Outreach Program. Furthermore, the school does not have a separate subject for the topic, incorporating it still shows that the school is making efforts to improve the financial skills of the students. However, it would be better and encouraging for the school to form a separate subject.
The majority of the students, specifically 28 individuals which accounts for 34.6 percent of the total population of respondents said that the having a ‘Job’ is the source of their family’s income. Next to this are the 13 students who said that they don’t have any idea on what is the source of their family’s income, this covers 16 percent of the population. The rest of the students have a combination of choices as this question requires marking all answers that apply to the respondents.
Having said that majority of the respondents’ source of family’s income is a job, signifies how crucial and valuable the work life of the family is. Correspondingly, this shows the meaning of the quote ‘working to live’ in order for the family to provide each other’s needs. However, the family needs to balance their income in terms of allocation and saving.
Most of the students or 46 individuals don’t have an idea on what are the current investments that their family owns, this account for 56.8 percent of the population. Next to this is the 10 students who claimed that their family owned a business, this covers 12.3 percent of the population. The rest of the students have a combination of choices as this question requires marking all answers that apply to the respondents.
The results suggest that the students don’t have awareness about their family’s financial background and practices as the majority of them don’t know the kinds of investments that secure the family in terms of finances, because these investments will support the needs of the family, be it either for their workable future or retire able future.
Majority of the students, specifically 53 individuals said that they don’t have any idea if their parents have any insurance, this covers 65.4 percent of the overall population of the respondents. While the remaining 28 individuals or 34.6 percent answered ‘Yes’ when asked the question “Does anyone from your immediate family have insurance?”
This implies that the students are not aware of the financial practices of the family, having most of them answer that they don’t have any idea. And insurance is one of financial product that one can avail to have something to rely on in times of need. The concept behind insurance is the same concept that financial literacy wants to teach, according to Jump$tart, a non-profit private organization devoted in advancing financial literacy the youth, financial literacy is “the ability to use knowledge and skills to manage one’s financial resources effectively for lifetime financial security.”, and this is the thing that you do with insurance.
Most of the students replied that they don’t have an idea on who from their family has insurance, this option is 11 individuals strong that accounts for 13.6 percent of the population of the respondents. Next to this are the 9 individuals or 11.1 percent of the population who replied that all of their family members have insurance. The rest of the students have a combination of choices as this question requires marking all answers that apply to the respondents.
Again, this may indicate that the student lacks awareness about the family’s financial practices, as most of the students don’t know who from their family has insurance.
Based on the table above, a large portion of the respondents or 63 of them (77.8%) stated that their parents have credit cards. Ten respondents (12.3%) stated that their parents own no credit cards, while eight respondents (9.9%) stated that they are uncertain whether their parents have credit cards or not.
The key findings of this category show that the parents’ of the respondents are financially included for they engage in financial services specifically, credit card. Correspondingly, them having credit cards act as an emergency money or alternative tool for those parents who do not want to bring a huge amount of money in their wallet. Furthermore, those parents who availed this service belong to the financial sector and are able to track their spending. However, those who do not have rational reasons for not availing it such as afraid to have debts or lose the card itself.
Primarily, the key data implies that although credit cards do have many functions in a family’s financial life, its main purpose is to be used to cover the expenses of an individual or family. It is also used as emergency money. Correspondingly, use credit cards signify that the family has another way to purchase products and are supposed to be known and monitor their expenditures. In addition, using credits for the purpose of purchasing of the needs of the family is an implication that they are responsible and are aware of the financial service.
Most of the students, specifically 27 individuals that accounts for 33.3 percent of the total population of respondents, said that their family regularly keeps a record of the family income and expenditures. Second to this is those who don’t have any idea if their family keeps a record of the family income and expenses, this was the response of the 24 students that covers 29.6 percent of the population. While the minority of the students said that their family doesn’t keep a record of the family income and expenses and that they don’t have any idea on how much the family earns and spend.
Again, a huge sample of students responded that they don’t have any idea if their family keeps a record of the family’s income and expenses, which may indicate that a huge sample of them was not aware of the financial practices of the family. Meanwhile, a majority of the respondents said that their family does keep a record of their income and expenditures which means that their family monitors and keeps track of the allocation of their income. Keeping a record is not only for the purpose of documentation but being aware of what must be bought first and last or in other words, the needs and wants. In addition, having a book that contains the family’s income and expenditures shows how valuable and crucial their budgeting is, hence, they have the skills to do so.
The numbers imply that most of the students again, are not aware of the finances of the family, answering that they don’t have any idea if how often the family has excess and unspent money. But also a number of students said that their family always, or from time to time have excess and unspent money, which implies that their family manages their finances well being able to have excess money before receiving a new salary. In addition, the unspent money can be allocated for their savings which can be useful in their future.
When it comes to the students who have answered the question “How often does your family have any excess and unspent money from previous earnings before the next moment of new revenues arrives?” from part III item no. 6 of the survey, most of them, specifically 12 individuals or 14.8 percent of the total population of respondents, said that their family deposit or didn’t withdraw the excess income from their bank account. While only 1 student that accounts for 1.2 percent of the population said that his/her family lends their excess income to family or friends. The 41 students which cover 50.6 percent of the population that belongs to the ‘Missing System’ is those who answered ‘I have no Idea’ from the previous question.
Although there are still students that answered ‘I have no Idea’, this is only the minority of the individuals, still the majority chose one from the options given as their response to the question. This may indicate that most of them who answered this part of the survey are really aware of their family’s finances and financial practices as they know that their family has excess money and what the family does with it. Meanwhile, for those respondents who answered “Deposit or do not withdraw from our bank account”, it still suggests that their family has a plan to allocate their excess money to a financial service or not. Correspondingly, now withdrawing excess income signifies that their family is saving their money for the purpose of emergency money or their future. More importantly, depositing family money is for the benefit of the members themselves and not spending it shows that their family practices good saving practices.
The table above shows that its dominant fraction is 42 respondents (51.9%) who stated that they have no idea on how often their family runs out of money. Sixteen of the respondents or 19.8% of the total respondents stated that their family very rarely runs out of money. Eleven respondents (13.6%) stated that their family sometimes runs out of money. Ten respondents (12.3%) have stated that their family never runs out of money. While one respondent responded “always” and one respondent responded “very often” to the question, which both takes 2.5% of the total population.
The majority of the population or the respondents states that their family rarely runs out of money, this may indicate that the students’ family manages their finances well, as they rarely come short of money, this is an indication that they balance their income and expenses well. Being that, it also illustrates that their family is literate in money management and they are likely not to experience a financial crisis in the future. In addition, this indicates that the family plans and allocates their money to their needs and priorities in their household. Nevertheless, in this aspect, the majority of the students’ family demonstrate the qualifications of a financially literate family through the good distribution of money and responsibility.
When it comes to the students who have answered the question “How often does your family run out of money before new earnings come?” from part III item no. 7 of the survey, most of them, specifically 7 individuals or 8.6 percent of the total population of respondents, said that their family cut down their expenditures. While only 1 student that accounts for 1.2 percent of the population said that his/her family borrows money from the bank and their family and friends give them money respectively, this is also the case with those who have multiple answers. The 49 students which cover 60.5 percent of the population that belongs to the ‘Missing System’ is those who answered ‘I have no Idea’ from the previous question.
With only the minority of the population responded with ‘I have no Idea’, the data suggest that students who answered differently from the mentioned earlier are really aware of the family’s finances and financial practices as they know that they run short of money and what to do when this happens which is a form financial practice.
When asked the question “How does your family budget the family’s income?” majority of the students, specifically 32 individuals or 39.5 percent of the total population of respondents said that they spend first and then save what is left. While the minority, specifically 1 individuals or 1.2 percent of the population said that they just spend everything and don’t save anything when asked the same question. The 1 individual that belongs to the ‘Missing System’ is the one who doesn’t have an idea of how his/her family budgets their income.
Even though the majority of students said that their family priority expenses first than saving, which is not a good financial practice, combine this with those who said that they prioritize saving first than expenses, this still implies that most of the families of the students have the practice of saving included on how they budget the family’s income which is a good thing.
Majority of the students, specifically 50 individuals that covers 61.7 percent of the population of the respondents, said that their family has savings, investments, or both. While the remaining minority which is 31 individuals or 38.3 percent said that they don’t have any idea of whether or not their family has either savings, investments, or both.
The result suggests that the decision maker of the family, which is usually their parents or the elderly, indirectly promotes the practice of saving up. Because if they practice it, it implies that they believe the cause the said practice, because an individual will not do something that he/she believes will not be beneficial for him/her.
According to the table above, the main reason for the family savings and investment of the students is for unexpected expenses, this ties with the option ‘I have no Idea’ both having 5 votes each, this accounts for 6.2 percent of the total population of the respondents. The remaining number of students has a combination of choices as this question requires marking all answers that apply to the respondents.
The numbers show that the students’ family probably thinks ahead of their future, that they consider saving up so that they could depend on something when the family needs immediate and unexpected money. This again supports the idea that the family’s elders indirectly promotes the idea of saving up for one’s financial security as this is what the results demonstrate
.
The table above indicates the assessment of the students on their family financial status according to their income purchasing power. Their answer to this question summarizes and validates their answers on other survey questions regarding their family financial background. The option ‘very good’ on this question signifies a higher income purchasing power than the rest of the answer options. And the option ‘very bad’ signifies the opposite of the latter. Thus, a majority of the students’ family assessment is concluded to be in a good shape. This signifies that their family, including the student, is able to handle financial situations especially problems such as saving and budgeting. Correspondingly, assessing the financial situation of their family in a productive manner illustrates financial responsibility at an early age. Although they are not required to take part, they do so for the security and future of their family. Being that their financial assessment is good, also means that their family has the proper financial discipline in terms of solving upcoming financial problems. All in all, a majority of the respondents’ family in assessing financial situations are less likely to experience financial hardships and thus, they show the concept of parent modeling wherein they apply and demonstrate good financial concepts to the family members.
30 students or 37 percent of the total population of respondents consider their family to belong to those who ‘Have enough money to buy lasting goods, but has troubles in buying really expensive things’. Second to the majority is those who don’t have any idea of where their family belongs to, this is 22 students or 27.2 percent strong. While the minority considers their family who has enough money to buy food, but not on clothes; with 3 individual votes that account to 3.7 percent of the total population of respondents.
The numbers tell that majority of the students came from families who are economically able. But second to this is those who said that they don’t have an idea on where their family belongs to, which shows that they are not aware of the finances and economic status of their family, which is not good.
The majority of the students, specifically 52 individuals or 64.2 percent of the total population of the respondents gets their personal finance from the allowance that they receive. Next to this is the 18 individuals or 22.2 percent of the population that gets their allowance from doing favors for their family or by doing household chores. There are also 9 individuals that get their finances from both their allowance and by doing household chores or favors for the family, this account for 11.1 percent of the population. The 1 of the 2 individuals that belong to the ‘Missing System’, has no source of finances as he/she does not receive an allowance from his/her parents and he/she does not do favors for the family and household chores in exchange of money. The other individual does not know to his/her parents whether or not he/she has money that she could use for her personal interests.
The majority of the students, specifically 56 individuals or 69.1 percent of the total population of the respondents said that their parents did not apply them for insurance. The remaining 24 individuals that accounts for 29.6 percent of the population said that their parents applied them for an insurance of any kind. The 1 individual or 1.2 percent of the population that belongs to the ‘Missing System’ is the one who said that he/she does not have any idea if his/her parents applied him/her for any insurance.
The table above shows that 9 individuals that account for 11.1 percent of the total population of the respondents have Health Insurance. Next to this are the 4 students that have Educational Insurance, this account for 4.9 percent of the population. There are also 3 students that have Life insurance; they represent 3.7 percent of the population. The remaining number of students has a combination of choices as this question requires marking all answers that apply to the respondents.
It is possible that their parents or guardians indirectly promotes having insurance to the students. This may be because they believe in what is the importance of having something to rely on in the future or in times of need.
This implies that the students are still dependent from their parents for their finances, although some students already know the concept or sense of earning money as their source of finances, this demonstrated by having them do some favors for the family or doing household chores in exchange of some amount of money.
The primary reason why the students did not have any savings is that they are not able because of their social and economic standing; this was the response of 11 students that covers 13.6 percent of the population of the respondents. Next to this is those who responded that they do not have trust with financial institutions, with 9 individual votes accounting for 11.1 percent of the population. And the option with the least response or votes is the option saying that they don’t see the point of making savings or investments with 5 individual votes that cover 6.2 percent of the population.
Most of the students said that they use their credit card for emergency purposes and for their personal expenses, to be specific, 3 individuals replied with the each of the said options, which accounts for 3.7 percent of the total population of the respondents.
The key finding suggests that the students use their credit card wisely and are valued. Accordingly, they are able to recognize that credit cards are supposed to be used when it is needed only and not solely for the purpose of shopping.
The table above shows that the largest portion of the respondents (40.7%) do not regularly record their personal income and expenditures, but have an idea on how much they earn and spend. The second largest portion is the 23 respondents (28.4%) who stated that they keep track of their income and expenses, but not all of those are recorded. It could be because they miss some days of recording or only recording their most significant amount or kind of income and expenditures. 18 respondents (22.2%) have stated that they do not regularly record and have no idea on how much they earn and spend. While 7 respondents (8.6%) have stated that they regularly record their personal income and expenses.
The majority of the respondents don’t keep a record of their finances, but from their response, it still implies that they are still financially aware thus becoming literate. It is because their answer give the researchers an indication that they have the sense of tracking and monitoring their finances as what the phrase ‘but I have an idea on how much I earn and spend’ on the option implies. We cannot say that they are absolutely not keeping a record of their finances, because they still have the sense of doing so, but not by keeping a written documentation of it. And although this is the case, a good number of students still said that they keep a record of their finances. This result says that the students look after their finances.
Majority of the students, specifically 48 individuals or 59.3 percent of the total population of respondents said that they sometimes have excess and unspent money or income. While the minority or 4 students that cover 4.9 percent of the population said that they never had excess and unspent money or income.
The majority of the students said that it is common for them to have excess or unspent money this may imply that most of the students handle their finances well being able to have excess money before receiving new finances.
TABLE NO. 1.39
The table above shows that 45 respondents (55.6%) have stated that they usually keep their excess income in cash and do nothing with it. 18 respondents (22.2%) have stated that they spend their excess income on goods. 11 respondents (13.6%) have stated that they deposit their excess income in their bank account. 4 respondents (4.9%) have stated that they invest their excess income in something that they could earn from. One of them (1.2%) stated that he/she have no idea on where his/her excess income goes. It may mean that his/her income or finances are controlled by other people. While two respondents did not answer the question above because they never had any excess and unspent money.
Thus, a majority of the respondents demonstrate a good practice in saving their extra allowance/income. This may signify that they value money and they envision for their money to grow in the long run. Although it is tempting to spend the excess money, they choose the best and right option to save and this will benefit them in their future. Proportionately, the students saving their excess money shows that they do not demonstrate compulsive spending habits and do commit to proper financial practices. Nevertheless, the students are able to show that they practice saving in their own simple ways yet it does and will bring numerous benefits in their future such as emergency money.
37 students or 45.7 percent of the population of the respondents said that sometimes they run out of money. Next to this are the 22 students that said that they very rarely run out of money, this covers 27.2 percent of the population. While the minority with only 1 student and covers only 1.2 percent of the population said that he/she always runs out of money.
Again, a good number of students claims that it is not common for them to run out of money, this strengthens the idea that the students probably handle their finances well, as they don’t often come short but instead they have excess money.
The table above shows that most of the respondents or 25 of them (30.9%) have stated that they usually spend their savings when they personally run out of money. 24 of them (29.6%) have stated that they borrow money from their family or friends when they run out of money. 22 respondents (27.2%) have said that their family or friends give them money free of charge when they, the respondent, run out of money. Two respondents (2.5%) have stated that they use their credit card to purchase what they want when they run out of money. While there are eight respondents who said (from the last question) that they never run out of money.
For those respondents who borrow money from family or savings, it suggests that they possibly have this as their backup plan in terms of finance. However, this is not a proper financial practice for in return, they have debt on the individual whom they borrowed the money. This also suggests that these students choose convenience and accessibility for their friends or family members are the easiest to approach and borrow money from. Yet, illustrates that they prefer borrowing than using their savings, which is not practical and risky.
Meanwhile, for those who use their savings, these respondents probably know the purpose of their savings which is to act as emergency money. The students on this level are able to recognize that their savings help them to avoid debt and they are able to appreciate the worth of their savings. In fact, using their savings let them experience the growth of their money in days, weeks, months, and even years. Using their savings cannot be said as a waste of time growing their money, but as a way for them to use the money wisely such as the cited situation. Nevertheless, saving and spending it at the right time is demonstrating a good financial practice and being knowledgeable about the benefits of savings. In addition, they are able to show their rationality in saving which is to use it for an emergency.
Most of the students don’t have any withstanding debt by the time the researcher conducted the survey with 75 individual votes that accounts for 92.6 percent of the total population of respondents. The remaining 6 students that cover 7.4 percent of the population said that they have a withstanding debt by the time the researchers conducted the survey.
This result again supports the idea that the students are probably well off of their finances, because most of them don’t have any debts, and the occurrence of debts indicates that you mishandled your finances as you have run short of money. Also having debts is not a good financial practice as debts have interests that can potentially harm your finances, and eventually drown you with more debts.
From the 6 students who have a withstanding debt, 4 students have a debt with their family or friends. While 1 individual said that he/she have a debt with a private individual, and another 1 individual said that he/she have debt with both his/her family or friends and a private individual.
The data probably implies that the respondents’ family or friends are the most approachable and convenient people to borrow money from. Correspondingly, this suggests that these people are influential to the respondents’ financial life and are trustworthy to borrow money from. In addition, since those are the people they are close to or they know personally, it is likely for the respondents to borrow money from those people which may be favorable for their side. The data may also possibly suggest that when it comes to financial problems, like having a debt, the students commonly approach their family or friends and come up with a solution,
From the 6 students who have a withstanding debt, 5 students stated that they have incurred the said debt for the reason that they will use the money that was lent to them to buy or spend on their necessities. While the remaining 1 respondent said that he/she have acquired a debt because he/she will use the money lent to him/her to pay another debt that he/she previously incurred.
Although the respondents borrow money from their family or friends, the borrowed money is used wisely for their necessities. This is probably used for their buying food in the school canteen or school materials needed for a project. Proportionately, it suggests that the respondents’ does not use the borrowed money for buying unnecessary items such as their wants. Moreover, this may show that these respondents’ know the value of money, especially when it is from their family or friends.
From the 6 students who have a withstanding debt, 3 students budget their finances by keeping something first before spending the rest of it. While another 3 individuals budget their finances by spending first then save the remaining.
Although both options received the same frequency, the first option which is to “Keep something to save first, then spend the rest for my necessities” is more beneficial to the respondents for they will save more amount than spending their income first then save the remaining. With the respondents who chose the first option, this suggests that they engage or practice saving at an early age effectively. However, this does not mean that those who chose the second option are not effectively saving but rather the amount they are able to save is possibly less compared to the ones who save first then spend. Furthermore, this data implies that the respondents do know how to budget their income yet, the researchers suggest that the respondents who chose the second option must save first then spend, to save more of what they expect. But despite the case, the data suggest that the students are still likely to save than not as the two options that came out of the survey showed the ones having the concept of saving than the remaining options in the survey which does not impart the concept of saving.
This data indicates that the students believe in the concept or practice of saving up, because any individual will not do something that they believe won’t benefit them or if they do not believe of the cause of it. And since the majority of them have savings, this means that they believe in the practice.
The major reason for the students’ savings is for the security of their future, with 13 individual responses that account for 16 percent of the total population of the respondents. Second to this are the 9 individuals or 11.1 percent of the population that had a combination of the options saying that their savings are for unexpected expenses, their future, for the increase of their living standards in the future, and for their dreams. The remaining number of students has a combination of choices as this question requires marking all answers that apply to the respondents.
This implies that the majority of the students do have the concept of thinking about their future and finding ways to secure it, this is one good behavior that financial literacy wants to teach. In addition, they are able to appreciate the value of their savings and the opportunities that will be created in the long-run.
The primary reason why the students did not have any savings is that they are not able because of their social and economic standing, this was the response of 11 students that covers 13.6 percent of the population of the respondents. Next to this is those who responded that they do not have trust with financial institutions, with 9 individual votes accounting for 11.1 percent of the population. And the option with the least response or votes is the option saying that they don’t see the point of making savings or investments with 5 individual votes that cover 6.2 percent of the population.
This suggests that the primary hindrance of having a savings account is social and economic status not the willingness of the students. It is possible that the starting amount for the establishment of an account is too high for them, that is why they did not have any bank account yet when the researchers conducted the survey. It is also possible that being too young restricts them by doing so, it is possible that the bank requires the establishment of an account to be established and accomplished by their guardians, this exempts the students with busy guardians or guardians that are not willing to take time to make a bank account for the student. The results for this particular question matches with the survey conducted by the World Bank from February to September of 2014, which also revealed that there are only 10 million Filipinos who have bank accounts from the 20 million respondents of the survey, and from this 10 million who don’t have, the World Bank found out that the primary reason or hindrance on having a bank account is not having enough money which accounts for 20 percent of the population.
T-test and Follow-up questions for the Students
The table above indicates the significant differences of the student respondents’ age to their answered survey questions. Since there is more than one answer on the students’ age, the T-Test was done by creating a cut point to define all groups. All answers were divided into two sets (those students’ who are aged less than 14 years old and those aged greater than 14 years or equal to 14 years). The midpoint or cut point is 14 years old. From the analyzed survey questions, these are the only ones that resulted significantly different to the respondents’ age. The two independent sets of the respondents’ age answered significantly different to each other on whether they know the meaning of financial literacy, whether their family regularly records their family income and expenditures, their family financial situation assessment, and whether which group of people with differing purchasing power they think that their family belongs to.
The table above indicates the significant differences in the students’ economic status to the survey questions. All answers were divided into two sets (those students’ with less than ₱62,500 of monthly family income and those with higher than that or equal to that). The midpoint or cut point is the ₱62,500 of monthly family income. From the analyzed survey questions, these are the only ones that resulted significantly different to the respondents’ economic status. The two independent sets of the respondents’ monthly family income have significantly different answers from each other on whether they know the meaning of credit and debit, their source of family income, and whether they have any savings or bank accounts.
To investigate further, the researchers conducted a follow-up survey and observation to high school students (one student per grade level) who recently bought at the school’s canteen.
The researchers have learned that Glendale High School students may have a minimum of ₱40 of daily allowance. Some respondents receive their allowance daily and some weekly. All five students have no current debt to anyone. Two respondents have said that they learned to save from both of their parents, one said that his/her mother taught him/her, and two respondents have said that no one told them to save and they purposely save. While a majority of the respondents have said that they buy at the school’s canteen sometimes when they just want to.
All the respondents have stated that there is always a portion of their allowance that they save and usually use to buy food. While only one respondent has said that a portion of his/her allowance serves as the everyday transportation fee.
Interviews
While to acquire more data to investigate Glendale School’s integration of Financial Literacy to its curriculum, the researchers interviewed two of the institution’s administrators and one teacher.
The researchers interviewed Ms. Leilani Juachon, the External Students’ Affairs Administrator at Glendale School and been working at the said school for currently over 20 years. She studied Family Life and Child Development at the University of Santo Tomas. She revealed that Glendale School teaches and includes financial literacy to the subject of high school students for it teaches the students efficient and effective money handling.
She said that Glendale High School students are financially literate. They know the concept of financial literacy and how to apply it in actual scenarios in terms of finances. At the same time, the institution has future plans in improving the financial education of its students. The institution has plans to expose more of their students to real business environments outside the classroom and have more extensive math subjects. She said that having a separate financial literacy subject in Glendale High School is a possibility. However, there is a struggle in finding financially competent teachers.
Ms. Juachon stressed that the school and the students’ family or guardians must have a cooperative relationship when teaching the students about financial literacy for it teaches the students to also become active participants in managing their family finances.
The researchers also interviewed Mr. Arnold Antiporda who is currently teaching at Glendale School for 11 years and is currently the school’s Academic Coordinator. He studied Organizational Management at Università di Bologna, studied AB-History at Polytechnic University of the Philippines, studied Instructional Design at Politecnico di Milano, and is currently studying master studies in Educational Management at Polytechnic University of the Philippines. At Glendale School, he teaches World Cultures, History, Philosophy, and Economics.
Mr. Antiporda revealed that financial literacy has to do with managing and planning your finances to avoid periods of scarcity. He said that Financial Literacy is not currently directly being taught in Glendale High School. Some topics are included in the curriculum. He stated that Financial Management may be included next school year.
He stressed that Financial Literacy is important with regard to being aware of the value of saving and of spending wisely. He said that young people should be financially literate as early as possible. The classroom is a very important venue for raising awareness about money, savings, business education and so on. He also said that the effort should be in having all stakeholders (parents, faculty, and students) to be united in promoting a higher level of awareness on Financial Literacy.
Lastly, the researchers interviewed Mr. Aldrich Juachon who is currently teaching at Glendale School for 9 years and is the subject teacher of Technology and Livelihood Education (TLE) and Mathematics on some grade levels, subjects purportedly teaching financial education, at the said institution. He studied Pre-communication at the University of Santo Tomas, Marketing at the Far Eastern University, and Secondary Education Major in Mathematics at St. Mary’s College.
He revealed that financial literacy is integrated with his subject and it teaches the basics of saving, spending, and investing money. In this subject, students are taught of how to start and operate their own businesses by first using their own money as the main capital. Then, the net income of their businesses is usually all donated to the school’s outreach program. Financial literacy teaches the students ways of auditing, managing, and budgeting money, so they could later use it to start their own businesses and incorporate the other lessons of TLE. He said that TLE is started being taught since Grade 7 since it is when the students are mostly able to handle and earn their own money. It is taught until Grade 10. He said that some Glendale High School students are able to apply the teachings of the school on efficient money handling quickly, but some still can’t control their compulsive spending habits. He pointed out that the struggle of it is in teaching the students the difficult concept, effects, and formulas of interest and annuity specially since those play important roles in banking.
The researchers made a follow-up question with the school administrator and the two faculty members of the school, this is to find out if they are aware of the Economic and Financial Literacy Week that is yearly celebrated every 2nd week of November and was declared by the Republic Act No. 10922. It turns out that the administrator and the two faculty members were not aware of the said celebration, it was revealed that the school only celebrates specific celebrations that have a Department Order (D.O.) from the Department of Education, otherwise if the Department of Education doesn’t issue a Department Order, the school was left unaware of certain celebrations like the Economic and Financial Literacy Week.
To acquire more data about financial literacy and the current state of the Philippine financial education, the researchers interviewed two financial experts. The first expert is Ms. Sheryl Uy, a financial analyst who’s been working at Banco De Oro (BDO) for 4 years as a Senior Assistant Vice President. She graduated with a bachelor of Science in Business Economics and has a master’s degree in Business Administration both in University of the Philippines, Diliman.
The second expert is Mr. Harold Gomes, a financial analyst who worked at The Hong Kong and Shanghai Banking Corporation (Philippines) for 3 years and is currently working at The Hong Kong and Shanghai Banking Corporation (Hong Kong) for 3 years and 5 months now. He studied B.A. Commerce Major in Finance at the University of Goa.
Both experts defined the term 'financial literacy' as one's ability to effectively manage and allocate financial resources, whether cash or non-cash towards productivity and a secure financial state. Both sides perceive the importance of financial literacy as being aware and applying the concept of having meaningful purchases which means the individuals know the rationality of buying a product. This entitles the individual to be financially responsible for they are able to manage their funds and improves their ability and skills in earning, spending, saving, and investing. They both emphasized that financial literacy must be taught in an early age for them to recognize the sound financial decisions and they would bring it up until their adulthood.
Based on the observation of the first financial expert, high school students are not financially literate for they are not informed with the terms and does not invest or open a bank account for their money to be secure in the bank. The interviewee also described that teens are associated with online shopping and they have easy access to purchasing what they want. Thus, these individuals have the freedom to buy what they desire even without the guidance of the parents. In addition, they become so relax with their purchasing behavior and may result in a long-term habit.
Meanwhile, the second financial expert stated that some Filipino students work and study at the same time to help support their family and this is crucial to understand. However, not all are in the state of realizing the need to be aware of the financial aspect, due to the fact that they depend on their parents for finances. Being dependent on their parents the whole time leads them to be ignorant of their spending behavior. This may also lead them to bring this habit until they are grown-ups.
Both sides mentioned that the primary factor affecting the financial literacy of high school students is the culture or values learned at home. This reflects whether the family talks or teaches their children about good financial behaviors and practices. If not, this would lead the student to not monitor his/her spending. It would also affect how the money is circulating and may result in the short span of the money being used. The first financial expert mentioned that peer pressure is another factor for friends can influence what high school students should buy wherein their rationality could be following the trends. Meanwhile, the second financial expert stated that there is a need for the institutions to make or incorporate financial literacy into the education curriculum for the youth to learn it at an early age. Additionally, life experiences are factors that help the students learn their mistakes or what went wrong.
Both experts have described that Filipinos are barely educated in planning for the future. Thus, they fail to recognize the actual priorities and this is caused by the overspending of Filipinos, not monitoring the spending habits. The sense of saving in the future is transferred into having the sense to spend today and suffer tomorrow. The financial security and ability to provide for the family is sacrificed and may be unknown until good financial practices are applied. Furthermore, both sides agree that financial literacy must be resolved immediately if not, the economic development and stability of the country are at risk.
The second financial expert suggested that they must create the curriculum in an interactive and relevant manner for this would be interesting to the students. This also makes learning fun despite the topic is serious, although the challenge for this is aligning the subject to the skills of the teachers. The second financial expert also recommends that Filipino students should take part-time summer jobs for this will teach them the value of getting money by working hard and eventually, the importance of saving what they have earned. Thus, this would give them a head-start in the teenage years and adult years. They said that the students must abolish their ignorance and be dependent on their parents.
CHAPTER V
CONCLUSIONS AND RECOMMENDATIONS
The researchers, therefore, conclude that only half of the Grades 7-11 Glendale students prior to the school year 2017-2018 who have encountered the term financial literacy know its meaning. Although all the respondents have encountered the term credit and debit, only 80.25% of them know its meaning. And even if, many of the respondents have encountered the term financial literacy, credit, and debit in Glendale School, only 44% of the total respondents believe that they are learning what they need to know about the subject in the classroom. Yet, financial literacy is not required to be taught as a separate subject in the DepEd curriculum.
Only a quarter of the respondents’ family or parents have insurance and regularly record family income and expenditures. 61.73% of them have family savings and investments, while 77.78% of the respondents’ parents have credit cards. Majority of them do not have an idea when their family has excess and unspent money and when their family runs out of money.
Majority of the respondents’ families spend first before saving. Majority of the students believe that they have a good family financial situation assessment. A significant ratio of 37% has enough money to buy lasting goods but has troubles in buying expensive things. Majority of the students have no insurance, credit cards, and do not regularly record their income and expenditures. However, they have an idea of how much they earn and spend.
Majority of the students have excess and unspent money and keep that money in cash. Majority of the students sometimes run out of money and they usually spend their savings when it happens. Although 91.36% of the respondents have no current withstanding debt, majority or 69% of the total respondents have savings or bank accounts.
Additionally, for questions that help describe the financial practices and background of the students’ families, it is often that majority of them responded that they do not have an idea about the matter. This suggests that the students are not aware of their family’s finances; therefore it is probable that the students did not learn the basic concepts of finance by observation of their family’s financial practices, but by other means such as direct engagement on the family’s finances or direct and open communication. This can be supported by the Situated Learning Theory which states that the socio-cultural and economic setting of an individual indicates their legitimate peripheral participation.
In addition, the t-test done by the researchers analyzing the significant differences of the student respondents’ gender, age, and family monthly household income to their answered survey questions, the stated independent variables are not great signifiers of or influential to the respondents’ financial literacy and capability. It is also due to that the test only indicated very few survey questions (a maximum of 4 questions out of 41 survey questions per variable) as significantly different to the stated variables. This is despite that majority of the students’ mothers are concluded to be more educated than the students’ fathers.
As related to the Rational Choice Theory, the student respondents’ answers to the survey questions reflect their individualism, concerns, norms, and interests on improving their current financial status and managing their finances. This states that their answers discussing their choices on saving, investing, and spending, reflect their rationality in decision making and expresses which decisions they think are more beneficial for them.
In conclusion, Grades 7-11 Glendale students prior to the school year 2017-2018 are to some extent financially literate. They are aware of the skills of managing money and saving enough for their future. This includes things such as keeping their finances safe, managing a bank account, understanding the differences between a credit card and a debit card, and basic budgeting. They are aware of the areas of knowledge fundamental to personal finance such as earning income, buying goods and services, using credit, saving, investing, and insuring. However, since the majority of the student respondents do not have personal credit cards, debit cards, savings, investments, and insurance and do not purposely saves first before spending, which demonstrates financial literacy and wealth inequality; most of them are considered not financially capable and stable for their future. Since more financially literate individuals make better financial decisions at a personal level and through their lifetime, most of the student respondents are concluded as lacking in financial literacy.
Technological developments have enabled and enhanced the availability of large volumes of information on themes relevant to financial decision making. The respondents have potential benefits, but the challenge of building their financial education starts with how that information is taught to and accepted by the individuals. This recognizes the need for action for enhancements for greater financial awareness, literacy, and capability. Hence, the student respondents need a more comprehensive and intensive financial education in the investigated institution. This could be done through forming a separate subject or celebration programs about financial literacy.
In terms of the Glendale School’s curriculum, financial literacy is being integrated with different subjects that begin in Grade 7. The curriculum for the topic includes discussions of elements of financial literacy such as budgeting and saving together with activities that will help the students apply and experience firsthand, the financial concepts that were taught to them. However, like the vast majority of the school system, there is no dedicated program or subject that aims to educate students on this crucial subject. As stated earlier, it is suggested by the researchers for the institution to form a separate subject for the students to become critical financial thinkers and decision-makers.
One key element for the future is persuading consumers that they need financial education and enabling them to access it. Also, financial education in schools must be improved. Despite that the Philippine government already have issued the Republic Act No. 10922 on July 2016 declaring the second week of November as our National Economic and Financial Literacy Week and must be celebrated, the interviewed Glendale School leaders are fully not aware of it. Today’s school-leavers need to be a lot more financially savvy than past generations if they want to manage their personal finances successfully through life.
This can also be supported by the Situated Learning Theory which states and adds that the environment setting and culture of individuals (or as related to this study, the students) is a very important constituent of their learning. This theory states that the students must be taught in a center of learning where their instructors are professionals in a certain subject matter. It is also so they will be more active and be engaging in their community when they started to learn financial education. It states that when the learners apply critical thinking and kinesthetic abilities based on their knowledge on a certain subject matter, they will be able to share information and motivate the community to do the same. Therefore, it is very crucial for students to have financial education, apply it on real-life situations, and improve their current financial status. This can also be supported by the Behavioral Finance Theory which states that the behavior of the respondents on managing their finances and their economist traits are influenced by their closest social institutions such as their family, friends, schoolmates, and school teachers.
The role of financial institutions in providing financial education needs to be better defined and further promoted. More information is needed at both international and national levels on good programs and practices and on ways to promote access to financial services. Thus, it is apparent that much more efforts are needed to raise the awareness of young Filipinos on money, its advantages, and its dangers.
Since the topics and principles found in financial literacy are also found in the subject Entrepreneurship, having students who are financially educated will turn them into entrepreneurs. Accordingly, a lot of entrepreneurs in this generation will be beneficial for the country in terms of increasing employment, the production of jobs and businesses, market trade and the possibility for the country to become a developed country. More importantly, Filipino citizens are able to possess the capital and income for the purpose of supporting their family.
Ultimately, since sound personal finance can contribute to increased levels of overall well-being, along with higher levels of satisfaction relating to income, retirement, housing and financial situation, financially literate and capable individuals become more are able to pay for their needs and may not necessarily rely on the government. This transforms them into sustainable individuals. However, not only these individuals will have a stable future but they are also probable to less likely find other job opportunities in foreign countries since they will be contented in the Philippines. This means that financially sound individuals may alleviate Diaspora. With this, it is probable that individuals may have a better family environment and management which may uplift their nationalism and positively affect their financial future.
Furthermore, financial education is not only about teaching the youth and the public on good financial practices and behaviors but is also about how these individuals will apply the concepts that would result for them to be stable, happy, and productive in their lifetime. Due to the fact that a stable economy is a happy economy thus, educating them is part of this goal.
With the surveyed, observed, and analyzed 81 high school students of Glendale School from Grades 7 - 11 and their financial literacy/knowledge, no matter how small, will vastly improve and could influence students from other schools/universities, their family, and future generations. It may be small, it may be a single step, but this is a step towards a better and happy future.
Additionally, it is probable that when the researchers gave the survey questionnaire to the respondents, the idea of saving, investing, and managing finance may have suddenly ignited within their minds. As they were exposed to this concept when they answered the questionnaire, it is viable that some of them even think twice with the reason of their response on the questionnaire and how they reached the conclusion of their response. Thus, the instrumentation served them to be critical thinkers and decision-makers in choosing the options that best fit their financial status and practices.
Nevertheless, this study serves as a pioneer study for the institution for it will let the school teachers and administrators know how the school curriculum affect high school students and how it influences their financial literacy. Still, being that these students are still developing and improving their skills, it is a must for them to recognize, understand, and apply the different facets of financial literacy at an early age.
Recommendations
For Future Researchers
Primarily, due to the short time frame of the researchers which is 3 months, the researchers had limited time for thesis writing, collecting information and data, and analyzing the results. Thus, the researchers recommend for future researchers to have a longer time frame specifically 6 months or 1 year to gather more information and data and conduct a significant analysis. Proportionately, it will be beneficial for they will avoid unnecessary delays and work pressure.
In terms of collecting information from the interviewees, future researchers are recommended to contact outside interviewees such as Financial Experts and the DepEd Secretary earlier to avoid delays. This would prevent them from having urgency follow-ups on the interviewees. Likewise, they must make an earlier permission in collecting the syllabus of Mathematics, Economics, Entrepreneurship, Technology and Livelihood, and other subjects related to financial literacy.
For them to collect significant information and data, they must determine other factors such as family culture, norms, and values of the respondents’ family for these affect the students’ financial literacy. This may be accomplished through incorporating questions in the questionnaires, interviews, and observations. Hence, this would give a more comprehensive and intensive study. Respectively, they must find out the age of the respondents’ parents and whether they have a retirement plan. This would show whether their parents do have a plan for themselves in terms of their health and household. Additionally, future researchers should conduct a generational prominence analysis to further compare the generations of their parents for this would show the standards and mindset of different generations and would prove whether or not financial literacy varies from generation to generation.
Meanwhile, for the future studies to have a more widespread distribution of data, they are recommended to include Grade 12 students in the population of respondents in order to cover the high school level. However, this is applicable if the researchers themselves are not Grade 12 students, this is to avoid biases. Also, they should include other students from other schools either in Quezon City or schools that are accessible to the researchers’ location. All of these are for the purpose of a more inclusive distribution of data and more analysis and comparison will be made.
Last, in terms of the availability of references/sources, they must look for other forms of sources such as books that discuss the financial literacy of Filipinos which may be available in the following years. This would enhance the understanding and knowledge of the future researchers regarding the topic.
Due to the fact that the Glendale School Inc. only incorporates financial literacy to the subjects of Economics, Mathematics, and Entrepreneurship, the researchers suggest that the institution form a separate subject that discusses the facets of financial literacy. Forming the separate subject would entitle the students to access to an intensive education and learning in the institution. Correspondingly, promoting good financial practices in saving, spending, and budgeting will be done by the subject teachers and students which shows how collaborative and engaging the subject will be. They will not only be aware of proper financial practices and behaviors but are possible to create their own ventures in the future thus, increase employment in the Philippines. Moreover, educating the youth is a small step in building their big future for their work and family.
For Policy Makers
Not all are aware that governments do have financial programs and services that would help the public to manage their resources and finance. Consequently, some possess the skills of practicing proper financial behaviors in spending, saving, budgeting, and investing, however, a majority does not. Thus, it is appropriate for policymakers such as DepEd and BSP to form effective promotions on their financial services. This then would make the public aware of their services and possibly increase the financial inclusion of the country. In addition, the citizens will contribute to the economic development of the country by being part of the statistics of Filipino citizens investing in financial services or saving their money at home. Uplifting the society towards an economically stable economy is a goal that the country wants to attain and teaching the public about financial literacy is one step for the goal to be achieved.
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Financial literacy is the cognitive understanding of financial components and skills such as budgeting, investing, borrowing, taxation, and personal financial management. The absence of such skills is referred to as being financially illiterate. So, students are you ready for student finance literacy course & to take the first step towards financial freedom and achieve your dreams? Apply now at The Big Red Group, and brace yourself for this remarkable rollercoaster ride of finances!
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