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The Effect of Financial Literacy and Budgeting Skills on Financial Wellbeing

Among Finance Students of One of the Universities in Cagayan de Oro

Thesis · November 2024

DOI: 10.13140/RG.2.2.29853.93926

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The Effect of Financial Literacy and Budgeting Skills on Financial Wellbeing Among
Finance Students of One of the Universities in Cagayan de Oro

A RESEARCH
Presented to the Faculty of the School of Business and Management
Xavier University - Ateneo de Cagayan
Cagayan de Oro City

In Partial Fulfillment
of the Requirement for the Subject
BA 25 THESIS

Submitted by:
Tatad, Jeanie D.
Sabuero, Kayla Renee
Santiago, Julsan Michael
Tejada, Kim Lester
Viola, Kyle Christianne

Submitted to:
DR. JIMBO A. FUENTES
 CERTIFICATE OF ORIGINALITY

This is to certify that the researchers assume full responsibility over the work

titled “THE EFFECT OF FINANCIAL LITERACY AND BUDGETING SKILLS ON

FINANCIAL WELLBEING AMONG FINANCE STUDENTS OF ONE OF THE UNIVERSITIES

IN CAGAYAN DE ORO ” submitted as a requirement for the degree BACHELOR OF

SCIENCE IN BUSINESS ADMINISTRATION at the Graduate School, Xavier University -

Ateneo de Cagayan, that the work is my own, that this is original except as specified in

the acknowledgments, footnotes, or in the references and that this has never been

submitted to this or any other school for a degree or other requirements.

TATAD, JEANIE D.

SABUERO, KAYLA RENEE

SANTIAGO, JULSAN MICHAEL

TEJADA, KIM LESTER

VIOLA, KYLE CHRISTIANNE

November 2024
 APPROVAL SHEET

The proposed RESEARCH titled: “The Effect of Financial Literacy and Budgeting Skills
on Financial Wellbeing Among Finance Students of One of the Universities in Cagayan
de Oro” prepared and submitted by TATAD, JEANIE D., SABUERO, KAYLA RENEE.,
SANTIAGO, JULSAN MICHAEL., TEJEDA, KIM LESTER., VIOLA, KYLE CHRISTIANNE.,
as a requirement for the degree of BACHELOR OF SCIENCE IN BUSINESS
ADMINISTRATION has been examined and is recommended for Oral Examination.

DR. JIMBO A. FUENTES

Adviser

______________________________________________________________________

PANEL OF EXAMINERS

Approved by the Committee on Oral Examination with a grade of _______.

_____________________ ________________________

MILBERT DIALOGO, MBA EDGARDO A. PALASAN,

MBA, EnP, REA, REB

Member Member

Approved and accepted in partial fulfillment of the requirements for the degree of Bachelor of
Science in Business Administration.

DR. RUTH LOVE V. RUSSEL

Dean, School of Business and Management

November 16, 2024

 ACKNOWLEDGMENT

The Researchers would like to thank those that have helped make this research possible.

We would first like to extend our deepest thanks to our research advisor, DR. JIMBO A.

FUENTES whose relentless support, training and advice was always available to us during

the entire research process. He guided us as to how to stay focused and motivated.

We would also like to thank our PANELIST during the defense for their informative comments

and suggestions that helped us make our study better here as well.

We gratefully thank Xavier University - Ateneo de Cagayan’s School of Business &

Management for giving us a safe place to study and to access the resources that we needed.

And finally we acknowledge the effort and commitment of every member of our research team.

We faced the challenges together, had ideas together, and worked together to finish this study.

We want to thank everyone who supported us on this journey.

Sincerely

The Researchers
 ABSTRACT

Financial well-being is a critical factor in personal and professional success,

particularly in today’s rapidly evolving financial landscape. For finance students, building

financial literacy and budgeting skills is not just an academic requirement but an essential life

competency. This study explores how financial literacy and budgeting skills affect the financial

well-being of finance students at a university in Cagayan de Oro. Guided by the Theory of

Planned Behavior (TPB) and Social Cognitive Theory (SCT), this study examines factors such

as financial risk awareness, confidence in financial decision-making, income management,

and expense tracking. Using a descriptive-correlational methodology and survey-based data,

the analysis highlights the significant role of these competencies in promoting financial

resilience and responsible money management. Findings aim to aid educators, policymakers,

and institutions in developing financial education programs that strengthen students' financial

resilience and better equip them to navigate financial challenges during their studies and future

careers.

Keywords: Financial Literacy, Budgeting Skills, Financial Well-Being, Financial Resilience,

Financial Risks, Financial Decision-Making, Income Management, Expense Tracking.

 TABLE OF CONTENTS

TITLE PAGE I

CERTIFICATE OF ORIGINALITY I

APPROVAL SHEET II

ACKNOWLEDGEMENT III

ABSTRACT IV

TABLE OF CONTENTS V

CHAPTER 1 7

Introduction 7

Theoretical Framework of the Study 9

Conceptual Framework of the Study 12

Schematic 15

FIGURE 1: Schematic Presentation of the Study 15

Statement of the Problem 16

Hypothesis 17

Significance of the Study 18

Definition of Terms 20

CHAPTER 2 22

REVIEW OF RELATED LITERATURE AND STUDIES 22

CHAPTER 3 40

RESEARCH METHODOLOGY 40

Research Design 40

Research Environment 40

Respondents & Sampling Design 41

Cochran's Formula: 41
 Research Instruments 42

Data Gathering Procedures 47

Scoring Guidelines 47

Statistical Treatment of Data 49

Ethical Considerations 50

REFERENCES 52

APPENDIX A 60

INFORMED CONSENT 60

APPENDIX B 62

SURVEY QUESTIONNAIRE 62

CURRICULUM VITAE 67
 CHAPTER 1

Introduction

Financial well-being, an essential factor influencing quality of life, has garnered

heightened focus as individuals and society confront the complexities of a swiftly changing

financial environment. Financial well-being denotes a condition in which individuals can fulfill

their present and future financial responsibilities, possess confidence regarding their financial

prospects, and have the autonomy to make decisions that enhance their quality of life

(Brüggen, Hogreve, Holmlund, Kabadayi, & Löfgren, 2017). The attainment of financial well-

being is significantly impacted by several aspects, including financial literacy and budgeting

proficiency.

According to Lusardi and Mitchell (2014), financial literacy is the capacity to

comprehend and use a variety of financial abilities, such as investing, budgeting, and personal

financial management, successfully. It enables people to make decisions that will improve

their financial situation. However, the capacity to carefully manage one's income and spending

to make sure that financial resources are allocated effectively to satisfy both short-term

demands and long-term objectives is referred to as budgeting abilities (Huston, 2010). These

abilities are crucial for students who frequently encounter financial difficulties stemming from

constrained resources, the necessity to juggle school with part-time employment, and the

pressure to navigate future career aspirations.

For finance students, the need for financial literacy and budgeting abilities is amplified,

since they are anticipated to excel in personal financial management for themselves and the

prospective clients they will assist in the future. Grasping and using basic financial ideas

throughout college years may establish the groundwork for responsible financial conduct in

professional professions (Shim, Xiao, Barber, & Lyons, 2009). Furthermore, students who

cultivate these abilities early are more inclined to achieve favorable financial results, including
less debt, enhanced savings, and comprehensive financial stability (Xiao, Tang, & Shim,

2014).

Financial literacy and budgeting may have distinct significance in regional situations

such as Cagayan de Oro, where socio-economic conditions might differ markedly from those

in major metropolitan areas. The cost of living, accessibility to financial services, and cultural

perspectives on saving and expenditure may all influence students' financial management.

Comprehending the impact of financial literacy and budgeting proficiency on the financial well-

being of finance students in this setting might yield significant insights into the obstacles and

possibilities they encounter in financial management. It underscores the significance of

educational programs and support systems in developing these abilities to improve financial

outcomes (Sabri & MacDonald, 2010).

This study examines the correlation between financial literacy, budgeting skills, and

financial well-being among finance students at a university in Cagayan de Oro. This research

aims to elucidate the interaction of these elements to enlighten educators, policymakers, and

students on the essential role of financial education in cultivating financial resilience. The

results of this study may aid in the creation of customized financial literacy programs and

support systems that improve financial well-being among students, equipping them for the

intricacies of the financial landscape they will encounter after graduation.

Theoretical Framework of the Study

This study applies the Theory of Planned Behavior (TPB) (Ajzen, 1991) as the

primary framework to examine the influence of financial literacy and budgeting skills on

financial well-being among finance students. These three main variables are critical for

understanding students' financial behaviors and outcomes. TPB is widely used to predict goal-

driven behaviors and is well-suited for studying how individuals approach managing their

finances. The framework includes attitudes, subjective norms, and perceived behavioral

control as key factors shaping financial intentions and behaviors. In addition to TPB, this study

incorporates financial self-efficacy to capture students’ confidence in financial tasks and

insights from Behavioral Economics to consider common biases in financial decision-making.

Within TPB, attitudes represent a person’s positive or negative feelings toward a

behavior (Ajzen, 1991). In this study, attitudes are defined as students’ views on the benefits

of financial literacy and budgeting for achieving financial well-being. If students see budgeting

and financial literacy as beneficial, they are more likely to engage in behaviors that improve

their financial health, such as saving regularly or avoiding impulsive purchases (Nguyen et al.,

2019). Attitudes directly impact how likely students are to make and follow through on financial

plans.

Subjective norms involve the perceived social pressures to engage or not engage in

specific behaviors. In a financial context, subjective norms may include influences from family,

friends, or societal expectations regarding responsible money management (Ajzen, 1991). For

example, finance students may feel pressured to adopt good financial habits if they perceive

that their family values budgeting or if their peers are financially responsible. Research shows

that when students see those around them practicing sound financial habits, they’re more

likely to follow suit (Farrell et al., 2016). This study examines how these social influences

impact students’ financial literacy and budgeting behaviors.

 Perceived behavioral control is the belief in one’s ability to perform a behavior. Here,

perceived behavioral control is enhanced by financial self-efficacy, which measures students’

confidence in handling financial tasks, such as tracking expenses or creating a budget. Studies

show that students with higher self-efficacy in managing finances are more consistent in

budgeting and saving behaviors, which contributes positively to financial well-being (Xiao &

Porto, 2017; Lown, 2011). This confidence in their financial skills is essential for students to

follow through on their financial literacy and budgeting intentions.

While TPB captures intention-driven behaviors, Behavioral Economics adds insights

into cognitive biases that may lead students to act differently from their plans. Present bias

(the tendency to prefer immediate rewards) and impulsivity are common in financial contexts

and can disrupt even the best budgeting intentions. By including Behavioral Economics, this

study accounts for why students might intend to save but sometimes spend impulsively,

despite having financial literacy and budgeting skills (Thaler & Sunstein, 2008; Dimmock et

al., 2016).

Social Cognitive Theory (SCT), developed by Albert Bandura as part of Social

Learning Approach is a similar model to TPB but it also involves some elemental construct of

reciprocal determinism & emphasis on observational learning which makes difference with

standard version of theory. Important aspects of SCT as related to this study are self-efficacy,

observational learning and reciprocal determinism.

Self-efficacy aligns with the sub-variable of a person simply feeling more confident in

financial decision making (Bandura, 1986). Drawing from this theory, we proposed that

individuals who possess a higher level of self-efficacy are more likely to practice effective

financial behaviors. According to Xiao & Porto, 2017, self-efficacy is highly associated with

proactive financial behavior, such as regular savings and educated investment decisions. This
increased confidence creates a psychological security net, boosting resilience even in difficult

financial conditions. By incorporating self-efficacy into financial literacy programs, educators

may help students build not just knowledge but also confidence in their ability to behave

successfully in financial situations.

Observational learning is simply that individuals learn by watching. For example, in this study

that would mean someone seeing others around them successfully running their finances may

adopt similar practices. According to Goyal and Kumar (2021), the function of parental

influence in establishing financial habits shows that children frequently replicate their parents'

financial behaviors. Similarly, media and cultural role models influence perceptions of wise

financial management (Chaulagain, 2019). Observational learning emphasizes the social

aspect of financial education, implying that modeling beneficial financial practices may spread

throughout communities, improving collective financial well-being.

According to reciprocal determinism, personal factors, behavior and the environment all

influence each other (Bandura, 2000). For instance, an individual’s financial literacy can

influence their budgeting skills, which in turn can affect their financial well-being. This cyclical

relationship ensures that changes in one dimension (e.g., an improvement in budgeting)

positively impact others (e.g., confidence and well-being). For instance, a financially literate

student might use their knowledge to establish better budgeting practices, fostering an

environment of fiscal discipline and security.

Conceptual Framework of the Study

This study aims to understand the essentiality of financial literacy and budgeting skills

on finance students’ financial well-being at one of the universities in Cagayan de Oro.

Additionally, Figure 1 below shows the conceptual framework of this study, representing the

relationship between financial literacy, budgeting skills, and financial well-being.

According to Chong & Abdullah 2014, the concept of financial literacy represents two

aspects: the knowledge about simple money matters and an ability to apply it for managing

resources effectively in order to make proper financial decisions that lead to lifetime financial

well-being. It connects to our study that for an individual or learner to attain financial security,

he or she must apply basic knowledge and skills on financial literacy, such as understanding

financial risks to make the proper financial decisions. Moreover, risk understanding, as a sub-

variable of financial literacy, involves the individual's understanding of how to identify possible

risks that may occur, hence, allowing them to make prudent financial decisions. Confidence

in making financial decisions is a sub-variable of financial literacy, representing the result of

having financial knowledge and the execution of good financial decisions throughout a lifetime.

In fact, financial literacy enhances a person's capacity to handle money, make appropriate

financial decisions, and achieve long-term financial wellness. The theories of Theory of

Planned Behavior (TPB) and Social Cognitive Theory (SCT) also support the ideas presented

in the study. TPB focuses on the concept of perceived behavioral control—when students

believe they understand financial risks, they are more guaranteed in making wise financial

choices. This confidence is consistent with SCT's idea of self-efficacy, which promotes

believing in your potential to achieve. Furthermore, SCT encourages observational learning,

which means that finance college students may learn financial skills by seeing others, such as

parents or mentors, manage money properly. Finally, reciprocal determinism in SCT points

out the mutual effect of a student's financial knowledge, surroundings, and behaviors.
 With proper budgeting skills, they will not easily fall into temptations to make impulse

purchases that will lead them from moving within their budgets. According to Bai 2023, mental

budgeting skills of categorization and monitoring of expenses have been favorable since one

can keep track of his or her expenditure, set goals, and make good financial decisions. The

findings of the study correspond to our research that the students with a high level of

knowledge in budgeting skills, which includes income management and expense tracking,

tend to be resistant to reckless purchasing and lesser chances to get accumulated debt; thus,

they are in better financial well-being. Also, the income management as a sub-variable of the

budgeting skill is all about the apportionment of earnings such as savings. As a sub-variable

to budgeting skills, expense tracking analyzes how much a person spends on where it is spent;

hence, it helps in fostering a better pattern of spending. Xiao & Porto 2017 claims that proper

budgeting skills lead to better financial behavior which will lead to financial well-being. In

addition, TPB and SCT theories support the variable budgeting skills. If students have a

positive mindset about budgeting and feel supported by family or peers who respect financial

discipline, they are more likely to develop and uphold outstanding budgeting practices. SCT

adds a further aspect here with self-efficacy: students who feel they can budget well are more

likely to make realistic plans and meet their financial objectives. Students frequently replicate

the spending behaviors they see in role models; thus, observational learning is also important.

Meanwhile, reciprocal determinism shows how personal discipline, help from others, and

budgetary activities all contribute to improved skills.

It is expected that financial literacy and budgeting skills have a positive effect on the

financial well-being of students because these kinds of competencies develop better abilities

of the individual to manage their money rightly, leading to better sub-variables of financial well-

being, that is, savings and financial behavior. Lusardi & Mitchell 2014 assert, "students are

most likely to make a proper financial decision that will result in high levels of savings rates if

they understand financial risks and have confidence in financial decision-making." Xiao &

Porto 2017 argue that "students tend to show disciplined financial behaviors in ensuring their
financial goals are met, leading to financial well-being if they possess basic knowledge in

budgeting skills, including income management and expense tracking.” In addition, TPB and

SCT theories support the variable, financial well-being. TPB explains how financial well-being

arises from intentional behaviors affected by positive attitudes, supporting social norms, and

a strong belief in one's skills. SCT expands on this by pointing out the value of self-efficacy—

when students think they can handle their money, they are more likely to save and avoid

impulse purchases. Observational learning also helps, since college students can develop

helpful financial habits by observing others succeed. Finally, reciprocal determinism shows

how human effort, accessible resources, and wise financial behaviors form a cycle that

increases financial well-being. Below is a further illustration of the relationship between

variables.
Schematic

INDEPENDENT VARIABLE DEPENDENT VARIABLE

FIGURE 1: Schematic Presentation of the Study

Statement of the Problem

This study aims to provide a comprehensive understanding of the role of financial

literacy and budgeting skills in promoting financial wellbeing among finance students. This

study seeks to deal with the subsequent questions:

1. How do the respondents perceive their level of Financial Literacy in terms of:

1.1 Understanding Financial Risks

1.2 Confidence in Financial decision-making

2. How do the respondents perceive their level of Budgeting Skills in terms of:

2.1 Income Management

2.2 Expense Tracking

3. How do the respondents perceive their level Financial Wellbeing in terms of:

3.1 Savings

3.2 Financial Behavior

4. Is there a significant relationship between Financial Literacy and Financial Wellbeing

among Finance Students?

5. Is there a significant relationship between Budgeting Skills and Financial Wellbeing

among Finance Students?

Hypothesis

Problems 1, 2, and 3 are hypothesis-free. The null hypothesis will be tested at a

significance level of 0.05 on the basis of problems 4 and 5:

H1: There is a significant relationship between the financial literacy and budgeting skills on

financial wellbeing among finance students

H2: There is a significant difference between the financial literacy and budgeting skills on

financial wellbeing among finance students

Significance of the Study

The study provides a Thus, the result of this study will benefit the following entities:

Teachers. This study facilitates a better understanding of how students are faring, financially

speaking; it can help to inform practice regarding student financial wellness more broadly.

With this knowledge, educators can plan more effective teaching methods that cater to the

individual needs of students and ultimately move them toward greater budgeting skills and

financial literacy. Educators can help instill long-term financial responsibility by providing

students with the tools they need to succeed.

Educational Institutions. This potentially makes the study a vital tool for many educational

institutions hoping to improve their financial literacy programs. In pinpointing where students

have gaps with their financial literacy, institutions can create both systematic support and

tailored interventions to better facilitate student learning outcomes around basic money skills.

Learning institutions are better placed to shape the course of student financial knowledge and

with this study, opportunity is here.

Parents and Guardians. The study offers insights into the financial literacy of children,

enabling parents to understand the factors influencing their budgeting skills and overall well-

being. This knowledge empowers parents to guide their children in developing responsible

financial habits throughout their educational and personal lives.

Finance Students. In this study we investigate determinant factors of student financial

literacy. This report presents information that can be used to discern discrepancies between

students’ financial knowledge and other influencing factors, such as lifestyle choices or

environmental influences. Students may also benefit from learning about the findings, allowing

them to proactively develop their financial literacy and become better equipped for adult life.

Researchers. The study contributes to the assessment of participants’ financial well-being.

The findings of this study can serve as a foundation for researchers to develop potential
solutions to improve financial well-being. Additionally, the study provides a framework for

future research endeavors related to financial literacy.

Scope and Limitations

This study was conducted to determine the effects and relationship of financial literacy

and budgeting skills on the students’ financial well-being, specifically, the students studying

for a Bachelor of Science in Business Administration major in Financial Management (BSBA-

FM) Program at One of the Universities in Cagayan de Oro (CDO) during the academic year

2024-2025. This investigation focused solely on the fourth-year college students as the

researchers’ respondents. The selection of these specific students as the researcher’s target

respondents, BSBA-FM students, is based on their familiarity and has more knowledge of the

financial terminologies specifically to the main objectives, exploring the relationship of financial

literacy (understanding the financial concepts) and budgeting skills (managing income and

expense) in promoting financial wellbeing.

This study will use quantitative research methods, hence using survey questionnaires

through Google Forms to collect data. This type of survey will effectively measure the BSBA-

FM students’ level of financial literacy in terms of Understanding Financial Risks and

Confidence in Financial decision-making, budgeting skills in terms of income management

and expense tracking, and financial well-being in terms of savings and financial behavior.

Furthermore, the study will cover the entire population of BSBA-FM students at the

aforementioned university and will utilize a method, a purposive random sampling method, to

provide a desirable response for the researchers’ current study.

Definition of Terms

Financial Literacy - Financial literacy is the understanding and ability to use various financial

skills effectively. This includes skills like budgeting, investing, saving, managing debt, and

understanding financial products (such as loans, credit cards, and insurance).

Budgeting Skills - Budgeting skills involve the ability to plan, organize, and track income and

expenses to manage finances effectively. Strong budgeting skills allow individuals to allocate

money wisely, prioritize spending, and avoid overspending, helping them work toward financial

goals and reduce financial stress.

Financial Well-being - Financial well-being is a state in which a person feels secure and in

control of their financial situation, both in the present and for the future. It involves having the

resources to meet day-to-day needs, the resilience to handle financial emergencies, and the

ability to work toward personal financial goals, such as home ownership, education, or

retirement.

Savings - Savings is the money that a person sets aside from their income rather than

spending it immediately. It involves putting aside a portion of one’s earnings regularly to build

up funds that can be used in the future. Savings can serve multiple purposes, from covering

unexpected expenses to achieving long-term financial goals like retirement.

Financial Behavior - Financial behavior refers to the actions and decisions individuals make

regarding their finances. This includes spending, saving, investing, borrowing, and managing

money. Financial behavior shapes one’s overall financial health and well-being and is

influenced by factors such as personal beliefs, habits, knowledge, and emotional responses

to money.
Income Management - Income management is the process of effectively planning, allocating,

and controlling income to meet one’s financial needs, goals, and obligations. It involves

understanding how much money is coming in, prioritizing spending, setting aside funds for

savings and investments, and ensuring that expenses don’t exceed earnings.

Expense Tracking - Expense tracking is the process of recording and monitoring all expenses

to understand where money is going and to manage spending effectively. It involves keeping

a detailed log of purchases, bills, and other financial outflows, allowing individuals to identify

spending patterns, control costs, and make adjustments to stay within a budget.

Understanding Financial Risk - Understanding financial risks involves recognizing the

potential for financial loss and making informed decisions to manage, minimize, or prepare for

those risks. Financial risk can arise from various factors, including market fluctuations,

economic changes, personal debt, and unexpected expenses.

Confidence in Financial decision-making - Confidence in financial decision-making is the

feeling of assurance and clarity that a person has when making choices about their finances.

It means having trust in one’s knowledge, skills, and judgment to make financial decisions that

align with personal goals and values. This confidence can empower individuals to make

proactive, informed choices, from everyday budgeting to long-term investments.

 CHAPTER 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents studies and information coming from journals, books, internet

resources, and unpublished dissertations and thesis which are reviewed and revisited and are

deemed to be significant in the completion of the present study.

The Theory of Planned Behavior

The Theory of Planned Behavior (TPB), developed by Icek Ajzen (1991), remains a

widely used framework for understanding and predicting human behavior across various

contexts. According to the TPB, an individual's intention to engage in a particular behavior is

the primary determinant of whether they will actually perform that behavior. This intention is

shaped by three core components: attitudes, subjective norms, and perceived behavioral

control. These factors work together to form the foundation of behavioral intentions and

actions.

Components of the Theory of Planned Behavior

Attitudes involve positive or negative evaluation of performing a given behavior. These

evaluations derive from anticipated outcomes and the perceived utility of these outcomes

(Ajzen, 2005). For instance, when it comes to spending, saving, and investing behaviors,

positive and negative beliefs or the perception towards these behaviors have a positive

relationship with the students’ behavioral intention. Such positive attitudes towards knowledge

of financial risks, for instance, and self-confidence when it comes to such decisions can go a

long way towards ensuring a positive attitude towards the intention of effective financial

management.

Subjective Norms include perceived pressure to act or not to act on a particular

behavior. These are influenced by perceived pressure to conform to expectations of important

people in our lives, such as family, friends, and colleagues (Ajzen, 1991). Subjective norms in

this study deal with the pressure from families or friends in financial and budgeting practices

among the finance students. Then there is the assertion that if finance students presume that

their circles embrace certain behaviors as much as they are prudent in finance, then they will

exhibit those behaviors.

Perceived behavioral control, the third component in TPB, refers to the extent to which

individuals believe they can successfully perform a behavior. This study enhances TPB by

incorporating financial self-efficacy, which represents students’ confidence in their ability to

manage their finances. Financial self-efficacy, a concept drawn from Social Cognitive Theory

(SCT), has been shown to influence positive financial behaviors, as individuals who are

confident in their financial skills are more likely to budget, save, and resist impulsive

purchases. Lown (2011) and Xiao & Porto (2017) found that students with high financial self-

efficacy were more likely to exhibit responsible financial behaviors. By emphasizing financial

self-efficacy, this framework addresses a critical factor that impacts students' motivation and

capacity to follow through with their financial intentions.

Thus, these three factors combine together to make the individuals’ intentions and it turns to

behaviors in different domains including financial management.

Application of the Theory of Planned Behavior to Financial Contexts

In recent years, the Theory of Planned Behaviour model has become the most suitable

to study financial behaviors such as saving, budgeting, and investment due to its efficiency in

predicting these behaviors. As mentioned by Nguyen et al. (2019), TPB has the advantage of

wide applicability in different financial situations, which is to say, financial attitudes, subjective

norms, and perceived control are all considered as drivers of behavior. To put more simply,

TPB allows us to understand how people make different financial decisions based on how

they feel about money, what they think others expect, and how confident they feel about

managing money. Also, Tan & Laswad (2018) stated that TPB is useful in predicting financial
behavior. In other words, TPB forecasts the financial decisions based on the mindset and

social influences. Financial literacy, the ability to think carefully and make wise financial

decisions, is essential for financial security and success (Kaiser & Menkhoff, 2017). It shows

that being financially literate can help people manage their money more successfully and get

to financial stability. There is a positive link between financial literacy and enhanced financial

goal accomplishment, improved financial management and reduced financial stress (Lusardi

& Mitchell, 2017; Fernandes et al., 2014). In other words, the more people understand finance,

the more likely they are to reach their financial goals and relieve themselves of money stress.

Ajzen & Sheikh (2013) indicated that TPB is a good framework for explaining how people’s

attitudes towards financial literacy, subjective norms and perceived behavioral control affect

their intentions to acquire and use financial knowledge. This suggests that TPB can explain

why people choose to learn and use financial knowledge according to their attitudes, what

they think other people expect of them, and how confident they feel about it. For instance,

Billari et al. (2019) applied TPB to understand what determines people’s intentions to enhance

their financial literacy and to save more by investing. This also demonstrates that TPB can

explain why people want to learn more about finances and save money.

Along with financial literacy, good budgeting skills are also important to maintaining

financial organization and attaining long term financial goals (Brüggen et al., 2017). Budgeting,

therefore, is helpful in helping people manage their money well and stay on course of their

financial goals. People with better budgeting skills are more likely to have better financial well

being because they are better able to use their resources and less likely to experience financial

stress (Drever et al., 2015). What this means is that people who are good at budgeting, feel

less stressed about money, and have better financial situations. Similarly, Farrell et al. (2016)

added that TPB helps explain how certain attitudes, subjective norms and perceived control

over budgeting can increase these skills and enhance financial well being. Put simply, TPB

can explain how attitudes, social influences and confidence in budgeting facilitate improved

people’s budgeting skills and overall financial health.

 Financial well-being relates to the ability to pay financial obligations,in order to ensure

future financial security and overall satisfaction with one’s financial situation (Netemeyer et al.,

2018). It means being able to afford to pay the bills, being secure about what you will be able

to make in the future, being happy with your financial situation. Now, it has been established

as a necessary part of someone’s overall life. Studies using an empirical approach reveal that

financial literacy and budgeting skills are important drivers of financial well-being and use of

TPB offers a compelling framework for explaining how the latter facilitate financial behaviors

as well as outcomes (Shim et al.,2015). The Theory of Planned Behavior provides an

explanation for how being aware of finances and having the budgeting skills necessary for

making financial decisions make a difference in terms of financial well-being.More recent

studies applying the TPB have centered around understanding of the financial behaviors like

saving and spending among different populations, from students to low income households

(Xiao et al., 2017; Lee & Mortimer, 2019). As such, researchers seem to use TPB to investigate

how individuals, such as students and lower income families, are able to deal with their

spending and saving.

Behavioral Economics adds another layer to this framework by addressing cognitive biases

that may lead individuals to act against their intentions. Unlike traditional economic models,

which assume rational decision-making, Behavioral Economics recognizes that people are

often influenced by psychological biases like impulsivity and present bias, which can lead to

unplanned spending. Present bias, for example, is the tendency to favor immediate

gratification over long-term benefits, even when one’s intentions are to save. Thaler &

Sunstein (2008) and Dimmock et al. (2016) found that these biases commonly affect financial

behaviors, especially among younger individuals. For students, these insights are relevant

because they help explain why some may impulsively spend despite having positive financial

attitudes or budgeting intentions.

 Social Cognitive Theory

Social Cognitive Theory is a psychological perspective that emphasizes the critical role

played by the social environment on motivation, learning, and self-regulation of an individual

(Schunk & Usher, 2019). The theory has been a very useful framework in a lot of fields. Fields

like social, clinical, educational, developmental, health, and personality psychology help

explain human behavior in multiple aspects, such as career and developmental tasks

(Bandura, 1986). According to the theory, people act as agents for their actions through self-

reflection, self-regulation, and self-organization, and these in turn affect their attitudes. The

theory states that the ability of an individual to engage in a target behavior is from an external

exposure to interactions or interrelationships (Martin et al., 2014). In relation to finance

regarding graduating students, it's important to understand the nature of this theory to fully

grasp the idea of how an individual learns its financial values and literacy that prepares them

for real-life application. In addition, (Lent & Brown, 2015) stated that a social cognitive model

of career self-management (CSM) was even developed to help explain processes in which

people contribute to their own educational and career development throughout their lifespan.

This strongly backs up the idea that every individual is responsible for their direction in life,

which helps understand how well graduating students would persevere when it comes to real-

life application of their chosen career.

Perceived Self-Efficacy

Perceived Self-Efficacy refers to individuals' capabilities to exercise control over

challenging demands and their own functioning, where the amount of personal control an

individual expects to have in any given situation can be estimated (Bandura, 1977). This

means that if individuals hold strong beliefs that they can master an upcoming task, they are

likely to invest the effort in engaging with it. In relation to the context of financial literacy, the

concept is applied to how a person is eager to understand their ability and master their financial

learning and decision-making, where they are then more likely to develop their financial skills
and apply these principles effectively. (Zimbardo and Boyd, 1999) states that when a person’s

financial self-efficacy is low, these people might refrain from doing anything related to finances

at all. In addition, if an individual feels confident that they can overcome challenges, they are

more likely to approach it rather than to avoid the threat. According to Unrau, et al. in 2018,

they claimed that self-efficacy beliefs can also be changed through verbal persuasion. For

example, a teacher could reassure students that they can prepare for an exam, due to their

competence and ability to plan. They could be informed that they have what it takes to succeed

in anything they put effort into. These types of persuasion can strengthen self-efficacy for

successfully managing the task. Thus, in the context of career exploration and decision-

making, self-efficacy is hypothesized to contribute to goals and actions, as well as outcome

expectations directly. Managing one’s personal finances takes more than financial knowledge

and literacy: an individual also needs a sense of self-assuredness, or ‘self-belief’, in their own

capabilities.

Social Learning

This learning is not a change in behavior by strengthening only, but also cognitive

processes in keeping with observation, attention, and retention (Rumjaun & Narod, 2020). In

addition to this, social learning specifies that financial behavior and literacy are formed by

social interaction. In regards to financial practice, it claims that people learn through observing

behavior, following the example of others and their family, and through media (Sinani., 2021).

Goyal & Kumar (2021) stated that parental guidance is important in children’s financial

socialization, as children often proceed along the financial path of their parents. In addition to

being a valuable source of information, media also plays a role in how people perceive

financial things as well as a role in how people think of money (Chaulagain, 2019). Knowing

how these socialization agents work to create aspects of financial literacy could determine

how social learning will affect individuals’ stability and decision-making when affecting their

financial status.
Financial Literacy

Financial literacy study is essential because it directly affects students' capacity to

handle personal money, make wise financial decisions, and comprehend complicated financial

products. Numerous studies have examined different aspects of financial literacy, especially

concerning students. Hermawan et al. (2019) assert that personal contentment with financial

circumstances markedly improves financial literacy in students. Their findings indicate that

when students are content with their financial management and resources, they are more

inclined to participate in activities that enhance their financial literacy. This supports the idea

that financial happiness involves not just wealth increase but also the efficient use of current

resources, contributing to enhanced well-being and financial literacy. Barreto and Gamble

(2020) underscore the significance of organized financial education, asserting that college

finance courses are effective instruments for improving financial literacy. Their research

underscores the imperative for educational institutions to deliver thorough financial education

encompassing critical subjects such as debt management, interest rates, and investment

methods. This pedagogical method is essential for equipping students to adeptly manage the

intricacies of personal finance.

Simarmata (2022) uses a Structural Equation Modeling (SEM) methodology to

examine the complex linkages affecting financial literacy in college students. This strategy

facilitates a comprehensive knowledge of how diverse elements, such as educational

background, socio-economic position, and personal experiences, converge to influence

financial literacy levels. The study highlights the significance of recognizing latent structures

that influence financial literacy, thereby offering insights to guide instructional practices for

enhancing students' financial understanding.

Understanding Financial Risk

A critical component of financial literacy is understanding risk, especially for students

getting ready to manage complicated financial environments. Dimmock, Kouwenberg, and

Wakker (2016) assert that risk literacy substantially impacts financial decision-making,

especially in younger persons. Their research indicated that persons with a superior

comprehension of financial risks, including investment risks and market volatility, are more

inclined to make informed decisions that correspond with their financial objectives. They

contend that improving risk literacy must be an essential element of financial education

programs, as it empowers consumers to assess the risks linked to various financial goods and

investments proficiently. Liu et al. (2021) examined the influence of financial risk perception

on investing behavior among college students. Their research indicated that students with

increased knowledge of financial hazards are more likely to choose conservative investing

methods, therefore protecting their financial well-being. This indicates that developing an

awareness of financial risk might result in more prudent and informed financial conduct,

especially in unstable markets.

Additionally, Rios et al. (2023) examined the influence of financial risk education on students'

financial actions and attitudes. Their findings revealed that students engaged in risk-oriented

financial literacy programs had enhanced risk assessment abilities, resulting in superior

decision-making for personal money and investments. The authors assert that practical

education in financial risk may cultivate a proactive mindset in students, prompting them to

evaluate the risks linked to various financial decisions and to make educated choices that

improve their financial well-being.

Confidence in Financial Decision - Making

Confidence in financial decision-making is essential for individuals in managing

their finances and addressing financial issues. De Meza et al. (2021) assert that financial

literacy markedly improves individuals' confidence in financial decision-making. Their research

indicated that those possessing elevated financial literacy had increased confidence in their

budgeting, saving, and investing capabilities. This heightened confidence may result in more

proactive financial actions, like pursuing investment possibilities and strategizing for
retirement, thereby enhancing financial outcomes. The authors underscore the necessity of

including confidence-building components into financial education programs to enable

individuals to make educated financial decisions.

Leung and Li (2022) examined the influence of emotional elements on financial

decision-making in students. Research indicated that students with elevated financial concern

generally have diminished trust in their financial decision-making capabilities. Their research

showed that alleviating financial concern with specialized financial education might markedly

improve students' confidence and decision-making abilities. This indicates that overcoming

emotional obstacles in financial education is as crucial as delivering financial information,

since it allows students to interact with financial ideas more easily and successfully.

Nguena and Tchana (2023) investigated the correlation among financial education,

self-efficacy, and confidence in financial decision-making. Their research indicated that

students engaged in comprehensive financial education programs had enhanced self-efficacy,

therefore elevating their confidence in financial decision-making. The results indicate that self-

efficacy, defined as the conviction in one’s capacity to achieve success, is pivotal in financial

decision-making processes. Improving self-efficacy with comprehensive financial education

can enable students to manage their financial destinies and make educated decisions.

Budgeting Skills

Budgeting skills are indeed essential for individuals, especially for college students

who seek financial well-being. According to the study of Aung & Mon, in 2020, having good

budgeting habits represents one of the most predictable determinants of successful personal

and economic development. If budgeting habit behavior is not practiced by the students, they

may eventually encounter financial circumstances such as inability to repay the loans and poor

financial management. In this study, it emphasizes the importance and acknowledges

budgeting skills as one of the individuals’ abilities, especially in college students, to become
productive and more successful in life. Moreover, individuals, especially college students with

good budgeting habit behavior, tend to have no problem with savings. According to the study

of Bai (2023), mental budgeting skills of categorization and monitoring of expenses have been

favorable since one can keep track of his or her expenditure, set goals, and make good

financial decisions. Individuals who possess a higher level of financial literacy are more likely

to experience better financial well-being. This study emphasizes that an individual, especially

college students with a significant amount of competence in budgeting skills, including income

management and expense tracking, tends to be more tolerant to careless buying and have

fewer chances of accumulating debt; thus, they are in better financial well-being. According to

the study of Ali et al., (2024), mental budgeting helps people to understand the budget of their

cash flow activities and provides awareness in understanding the spending of their daily life

income and expenses. In this study, it talks about the role of budgeting skills to the spending

habits and income management of an individual, especially college students. With these skills,

they can easily make a difference between high and low spending decisions on their desired

goods and services in routine life. The study of Ali et al. (2024) concluded that mental

budgeting significantly enhances both the management and the overall financial health of

individuals. In this statement, it concluded the significant effect of having budgeting skills. That

is, when individuals, especially college students, acquire this financial knowledge, it will help

them to manage their income, prioritize what they need to spend, and most especially, attain

financial well-being.

Income Management

Managing income is a vital part of an individual, especially for college students, to

become more convenient in their future financial circumstances, hence, financial well-being.

According to the study of Alam et al. (2020), there is a saying that money is not everything,

but in reality, almost all the activities of life require money. It is not only important to those who

are already working but also to students, and therefore money must be managed properly.

Income management plays a vital role for an individual, especially for college students, to
become more manageable in their future financial circumstances. Without a proper money

management plan, individuals will impulsively be purchasing unnecessary funding such as

branded items and food in high-class restaurants. Another claim of Alam et al. (2020) is that

financial education is vital and can influence the general commercial awareness, which could

help students handle their finances better and improve financial well-being. By acquiring this

certain financial knowledge, individuals, especially college students, will properly handle their

finances, develop realistic financial objectives, and be more concise in their financial

preparation for their future needs. According to the study of Fernandez (2021), to get rid of the

difficulty in managing their money, students should be taught to create a financial plan,

including setting long-term and short-term goals like following the budget, then prioritize their

goal and stick to a budget they set to help them decide on how to save their money easily. In

this study, it concluded that the best way for the individual, especially college students, to

lessen the burden of managing money is to set a realistic financial goal—long-term and short-

term goals—and spend within the range of budget. Sabri, M. F., Wijekoon, R., & Rahim, H. A.

(2020), concluded as well on their study that proper financial strategies in money management

and saving were positively associated with financial well-being. Therefore, financial education

programs will be recommended to uplift positive financial practices in order to improve the

well-being of individuals directly.

Expense Tracking

Tracking our expenses can become a vital step for individuals, especially for college

students, to achieve financial well-being. According to the study of Zhang, Y. (2024), expense

tracking can be viewed as a form of financial self-monitoring. It may assist with enhancing

financial self-control and promoting financial well-being… failure to exercise self-control in the

face of these temptations can result in poor financial consequences such as overspending,

debt, or noncompliance with budgets. In this study, it emphasizes that individuals, especially

college students, face multiple impulsive purchases in their everyday lives, which frequently

contradict their financial objectives, such as savings or budgeting goals. For them to execute
their financial objective, they must practice the basics by starting with self-monitoring and

developing discipline. In order for individuals, especially college students, to enhance their

self-control and improve their well-being, Zhang, Y. (2024), also claims that expense tracking

collects personal spending data that helps individuals align their financial behavior with their

financial goals. In order to optimize financial self-parameters, individuals, especially college

students, should prioritize precision in categorization and consistency in expense tracking.

According to the study of Lalmuanpuia, N. (2021), to improve financial habits, students must

take some time to create concrete measures to help them keep track of their expenses… they

need to think about saving to buy “needs” items rather than spending on “wants” items. In this

study, it emphasizes the variation of what the individuals, especially college students, need to

prioritize for them to be able to manage their finances more effectively. Furthermore, the needs

and wants differentiation can become a guiding tool in order to track the necessary and

unnecessary spending.

Financial Well-Being

Recently, the FWB of students has received heightened attention in various research

both on its predictors and outcomes related to academic success and life satisfaction. Singh

and Malik (2022) in a systematic review listed crucial facets of financial well-being and

highlighted financial literacy to be one of the consistent predictors for FWB. They concluded

that greater financial literacy leads to more financial self-efficacy and perhaps better broader

financial well-being for young adults (including students). Further, an investigation of Tanoto

and Evelyn (2022) on the correlation between financial knowledge and cyber shopping

addiction among Indonesian youths found that students with great understanding about

finance were more likely to have lower expenditure compulsiveness toward online transactions

as well as had better economic well-being. Besides, Gutter and Copur (2011) proved that

financial well-being relates to saving behaviors and quality of life, demonstrating how students

who perform better with personal financial management have fewer depressive and stressful

symptoms and perform better academically. Together these studies suggest that there is a
very important educational finance sector through which the issue of financial literacy and

management plays a role in promoting students' financial well-being. They recommend that

the most important aspect of educational finance—the educational finance program—be used

to bring improvement to students' financial capabilities as well as general satisfaction with life.

Savings

Student saving behavior has become one of the critical areas of research because

these spending and saving habits are going to define their future financial health. In this

regard, Hartono and Isbanah (2022) studied factors that motivate students' saving behavior

and found that financial literacy, parental socialization, peer influence, and self-control are

some of the most critical factors. From their investigations, it was reflected that financial

literacy positively influenced both by parental socialization and peer influence, directly

impacting the saving behavior, hence proving that good social environments indeed matter in

making the students save better. Similarly, Omar et al. (2020) investigated the pre-degree

students, and it was found that a significant correlation exists between financial literacy and

parental guidance that is relevant to positive saving behaviors. This study applied the Theory

of Planned Behavior to determine the determinants' contributions to students' effective saving

behaviors. Ahmad et al., in their saving behavior among Malaysian university students

published in 2021, reported that among the most effective ones determining saving practices

are financial literacy and self-control. The authors concluded that enhancing financial literacy

through education programs could have a significant impact on the behaviors of saving among

the students, therefore financial well-being. These studies point to the importance of both

financial education and social networks in promoting saving habits among students.

Financial Behavior

Student financial behaviors are, of course, a very important area of focus because they

directly carry direct implications for students' future financial stability and overall well-being.

According to literature, a number of aspects have been proven to influence the financial
behaviors of students, namely financial literacy, parental guidance, peer influence, and

individual attitudes. According to research conducted in 2022 by Hartono and Isbanah,

financial literacy is indeed a mediating variable when it comes to saving behavior among

students. Their findings established that parental socialization and peer influence favorably

impact financial literacy, which in turn affects saving behavior. The role of the social

environment in shaping financial behavior among students is well established in this respect.

Similarly, a systematic review by Nuris et al. (2023) resulted in ten factors influencing financial

behavior among undergraduate students, of which financial attitude and education were

considered most prominent factors. Positive attitude towards finance does promote better

practice of financial management among students. Besides, Xiao et al. (2009) researched the

relationship between financial behaviors and quality of life among college students. It was

found that college students with more favorable financial behaviors had a high quality of life in

terms of life satisfaction. This study collectively illustrates the diverse nature of student

financial behavior and indicates the need for comprehensive financial education programs to

improve their financial literacy and management skills.

Citation from Different Studies

This section shows different citations from the researcher's chapter 1, with a total of

12 citations, that will provide a deep understanding and informative foundation of the present

study. All the cited studies are critically examined by the researchers in relation to their present

study, determining the effects and relationships of financial literacy and budgeting skills on the

students’ financial well-being. The citations below have summarized, from the theories being

used down to the main variables, emphasizing how each of these studies is relevant to the

researcher’s present study.

Brüggen, Hogreve, Holmlund, Kabadayi, & Löfgren (2017): This source characterizes

financial well-being as the capacity to fulfill financial responsibilities, possess confidence over

one's financial future, and experience financial autonomy. The incorporation of this reference

is crucial as it delineates the framework of financial well-being, the principal dependent

variable in the study. Comprehending the holistic aspect of financial well-being enables the

study to precisely assess its influence among finance students in Cagayan de Oro.

Lusardi & Mitchell (2014): Lusardi and Mitchell’s work focuses on financial literacy and its

critical role in enabling individuals to make informed financial decisions. This citation is

included because it provides a foundational definition of financial literacy, one of the key

independent variables in the study. It also highlights the link between financial literacy and

improved financial decision-making, which is essential for understanding how finance

students’ knowledge impacts their financial well-being.

Huston (2010): Huston’s research defines budgeting competencies and their significance in

the effective management of income and expenditures. This citation is essential as it provides

a framework for evaluating budgeting skills—an independent variable in the study. The

incorporation of this reference enables the investigation of how students’ budgeting proficiency

influences their financial well-being, especially in a university context where financial

resources may be constrained.

Shim, Xiao, Barber, & Lyons (2009): Shim et al.'s study examines the development of

financial literacy and personal finance behaviors throughout college and their long-term

impacts on financial outcomes. This citation underscores the significance of financial literacy

and behavior in academic life, illustrating how proficiency in these skills as a student can

establish a foundation for responsible financial management in the future, especially pertinent

for finance students anticipating careers in the financial sector.

Xiao, Tang, & Shim (2014): This study examines the beneficial effects of financial knowledge

and behavior on students' financial well-being, encompassing less debt and enhanced

savings. This research includes it since it corroborates the notion that kids who cultivate robust

financial literacy and budgeting abilities early are more likely to achieve favorable financial

outcomes. This corresponds with the objective of the present study to investigate the impact

of such abilities on the financial well-being of finance students in Cagayan de Oro.

Sabri & MacDonald (2010): Sabri and MacDonald’s research investigates financial literacy

and budgeting across diverse socio-economic contexts, rendering it especially pertinent for

comprehending the variations of these elements in Cagayan de Oro, an area facing distinct

economic issues relative to bigger metropolitan centers. Their research substantiates that

financial literacy and budgeting are affected by socio-economic situations, which is crucial for

comprehending the distinct financial issues encountered by students in the local environment.

Ajzen (1991): The following citation is very important as it provides the basic foundation to the

Theory of Planned Behavior (TPB). In Ajzen’s work, the change of behavior is controlled by

attitude toward the behavior, subjective norms and perceived behavioral control. The

importance of this theory then lies with understanding how these factors come together to

influence the intentions and actions of such a subject as financial management. Once we know

these components, they tell us how to behave so we can achieve positive individual and

collective financial outcomes and thus financial health.

Bandura, 1986: This is important because it nuances the idea of self-efficacy, which is simply

the feeling that each person has that they can successfully accomplish certain tasks. In

financial decision making, self efficacy strongly correlates with a person’s confidence in the

financial choices. By improving self efficacy individuals are more likely to practice effective

financial behavior, for example prudent budgeting and saving. Such a concept finds

implications in how psychological factors can determine financial literacy and depending on

them, the financial skill and its effect in enhancing a person's financial outcome and well-being.

Bandura, (2000): This citation is relevant because it addresses the idea of reciprocal

determinism which is crucial to knowing behavior in a financial context. Under the view of

reciprocal determinism, personal factors (such as self efficacy), behavior, and the environment

have an interaction on how an individual acts. This theory helps explain why personal factors

— a person’s confidence in their own financial skills — have impacts on behavior, or their

budgeting practices, which are, in turn, impacted by the economic environment in which they

find themselves. The importance of improving financial well being is underscored by the
clinical aspect of the negative cycle cycles for all these aspects.

Chong & Abdullah 2014: We used the study of Chong and Abdullah as our supporting study

in our investigation because it connects to our first main variable, financial literacy. It

demonstrates to their study the concept of financial literacy, in which it includes a variety of

different areas such as understanding financial perceptions, being able to articulate them

effectively, managing one's personal finances, being capable at making realistic financial

decisions, and feeling confident about properly planning for future financial needs.

Bai 2023: We considered and added the study of Bai in our investigation because it is

connected to our second primary variable, budgeting skills. The survey of Bai goes further on

the idea of mental budgeting techniques, in which it helps students keep track of their spending

and earnings, leading to more realistic financial decisions and objectives in the long run.

Additionally, it emphasizes the concept that mental budgeting minimizes the students'

tendency to make impulsive purchases, which will then benefit their financial well-being.

Xiao & Porto 2017: The information of Xiao & Porto has been added to our investment as it

connects to the three main variables that we are determining: financial well-being, budgeting

skills, and financial literacy. In Xiao & Porto's study, it shows that in the connection between

knowledge of finances and financial fulfillment, both financial behavior and financial literacy

could serve as effective mediators. It also emphasizes the fact that financial education

promotes understanding of finances as well as improving self-efficacy in managing money,

which boosts the students’ financial behaviors, which in turn enhances their overall wellbeing.
 CHAPTER 3

RESEARCH METHODOLOGY

This chapter presents in detail the methods and procedures of this study. It includes

the the research design, research environment of the study, the respondents and its sampling

design, research instruments that will be used, the data gathering procedure, scoring

guidelines, the statistical techniques, and the ethical consideration in pursuing the study with

regards to the Effect of Financial Literacy and Budgeting Skills on Financial Wellbeing Among

Finance Students of One of the Universities in Cagayan de Oro.

Research Design

This study employs a quantitative research design employing a descriptive approach

to investigate the impact of financial literacy and budgeting skills on financial well-being among

finance students at a university in Cagayan de Oro. Utilizing quantifiable data, this

methodology facilitates the exploration of the relationships between the independent variables

(financial literacy and budgeting skills) and the dependent variable (financial well-being)

Research Environment

The study will be conducted at one of the private institutions in Cagayan de Oro,

Misamis Oriental. The participants will be undergraduate students of Business Administration

majoring in Financial Management enrolled during the first semester of the academic year

2024-2025. The survey will provide participants with the flexibility to complete it at their most

convenient time.

Respondents & Sampling Design

The researchers will use the Purposive Sampling Method that will ensure each and

every college student in a specific course will be selected as the researchers' respondents. In
this sampling method, participants are chosen deliberately, not randomly, to align with

researchers’ study and its objectives (Bisht, 2024). The respondents will depends if they meet

these certain criteria: (1) a student must be enrolled in Bachelor of Science in Business

Administration major in Financial Management (BSBA-FM) Program during the academic year

2024-2025, (2) a student must be a graduating 4th year college student aging 18 to 24 years

old, (3) must be enrolled on one of the universities in cagayan de oro city, and lastly (4) a

student must be willing to voluntarily participate in the researchers’ study. Moreover,

Cochran's equation was used to calculate the researchers’ sample size from the whole

population in order to get realistic potential responders in the significant population.

Cochran's Formula:

Where N is the population size, n is the sample size, Z is the confidence level, p is the

proportion of the population, q is the value, and e is the acceptable sample error. On the other

hand, the researcher selected 50 college students that are relevant to their study and arrived

with a sample size of 45.

One of the Best Universities Population (N) Sample (n)

of Cagayan De Oro City

A 50 45

Total 50 45

Daniel 2012, emphasizes an ethical point of view stating that a sample is too large if it

has more participants than necessary and too small if it is not large enough to detect a

significant effect that has practical relevance. The researchers’ study follows Daniel’s point

that taking a large sample that is not relevant to researchers’ study can mislead the
investigation. The selected number of college students has more knowledge of financial

terminologies specifically to the main objectives, exploring the relationship of financial literacy

and budgeting skills in promoting financial wellbeing, which may lead to admirable findings.

Research Instruments

The researchers will utilize the Google Form platform to administer survey

questionnaires, aiming to simplify the process of reaching out to selected respondents and

enhance convenience for both parties involved. This survey questionnaire consists of thirty-

two (32) questions in total, which have been classified based on the research topic of the

study. It also consists of questions that address the variables used by the researchers in the

study. The research instrument of this study will also consist of two (2) sections. The first

section of the researchers’ questionnaire will require the selected respondents to input their

optional name and their school email address. The second section will contain necessary

instruction to guide the respondents and thirty (30) questions in total on sub-variables. For

financial literacy, there are five (5) questions regarding students’ understanding of financial

risk and five (5) questions regarding students’ confidence in financial decision-making. For

budgeting skills, there are five (5) questions regarding students’ income management and five

(5) questions regarding students’ expense tracking. For financial wellbeing, five (5) questions

regarding students’ savings and five (5) questions regarding students’ financial behavior. The

Likert scale will also be part of the second section since it will help the researchers to know

the perceived level of respondents in financial literacy, budgeting skills, and financial

wellbeing.
 Responses

Questionnaires
(1) (2) (3) (4)

Strongly Disagree Agree Strongly

Disagree Agree

Financial Literacy

Understanding of Financial Risks

1. My knowledge of financial risks

helps me manage my money to build
up savings over time.

2. I evaluate the risks of taking on

debt before making borrowing
decisions (e.g., student loans, credit
cards).

3. I assess the pros and cons of

different financial products (e.g.,
insurance, credit) with potential risks in
mind.

4. I am mindful of financial risks when

planning for both short-term and long-
term goals.

5. I am cautious about spending

money on non-essential items due to
potential future financial risks.

Confidence in Financial Decision-Making

6. I am confident in my ability to make

sound financial decisions.
7. I feel assured when choosing
between different financial options
(e.g., savings, investments).

8. I rely on my understanding of
financial information to make informed
decisions.

9. I am comfortable evaluating
financial advice or guidance.

10. I feel confident in managing my

finances without relying heavily on
others.

Budgeting Skills

Income Management

11. I review my budget to meet my

financial targets as well as for
alternatives in my spending patterns.

12. I create a budget plan for myself,

and I stick to it.

13. I manage my income to meet both

short-term and long-term financial
goals.

14. I adjust my spending based on my

income changes or financial needs.

15. I consistently set aside part of my

income for savings or future use.

Expense Tracking
16. Even though I plan to spend, I
exercise self-control in my budgeting.

17. I always checking my income and

spending.

18. I am confident in managing my

personal finances.

19. I know what the basic needs are

and what the wants are.

20. I analyze my spending habits to

improve my financial planning.

Financial Well-Being

Savings

21. I am familiar with the advantages

of saving and investing.

22. I am satisfied with my current

savings level.

23. I am satisfied with the amount of

money I save each month.

24. I prioritize saving money to

achieve financial security.

25. I have clear financial goals that

motivate my savings habits.

Financial Behavior
 26. I am disciplined in my budgeting
habits.

27. I often review and adjust my

financial goals.

28. I avoid impulse purchases by

sticking to my budget.

29. I set financial goals and work

towards achieving them consistently.

30. I regularly evaluate my financial

behavior to improve my financial well-
being

Data Gathering Procedures

Data gathering for this study will be done via an online survey accessed using Google

Forms. The participants of the study will be fourth-year students of (BSBA-FM) a major course

in a university in Cagayan de Oro, Philippines. The survey shall ask respondents to provide

details on their financial literacy, budgeting capability, and financial well-being. Every section

will have a specific focus: Financial literacy will assess the ability to understand financial risks

and be confident in making appropriate financial decisions; budgeting skills will cover income

management and expense tracking; and financial well-being will review savings behavior and

general practice in managing finances. Clear instructions for the questionnaire will be

provided, and measures of anonymity and confidentiality will be taken in order to receive

honest answers. After obtaining the data, it would be submitted to statistical software such as

SPSS or R with a focus on describing statistics and correlation analysis, which determine the

relationship among the variables. A systematic approach will then give insights on students'

reaction towards financial literacy and budgeting skills as far as their well-being is concerned

to also enlighten educators and policymakers of the importance of finance education.

Scoring Guidelines

Prior to data collection, researchers assigned a unique numerical code to each

question that respondents answered. These numerical codes corresponded to specific rating

scales to ensure consistent and accurate scoring. This system allows for a standardized

analysis of the responses, highlighting the level of agreement, skill, or wellbeing as reported

by the respondents. The numerical codes are applied across various components, such as

financial literacy, budgeting skills, and financial wellbeing, to systematically measure and

compare the data collected from the finance students.

Table 1.

Financial Literacy Scoring Guide

Financial Literacy

RANGE DESCRIPTION INTERPRETATION

3.26 - 4.00 Strongly Agree Very High

2.51 - 3.25 Agree High

1.76 - 2.50 Disagree Low

1.00 - 1.75 Strongly Disagree Very Low

Table 2.

Budgeting Skills’ Scoring Guide

Budgeting Skills

RANGE DESCRIPTION INTERPRETATION

3.26 - 4.00 Strongly Agree Very High

2.51 - 3.25 Agree High

1.76 - 2.50 Disagree Low

 1.00 - 1.75 Strongly Disagree Very Low

Table 3.

Well-being Scoring Guide

Well-being

RANGE DESCRIPTION INTERPRETATION

3.26 - 4.00 Strongly Agree Very High

2.51 - 3.25 Agree High

1.76 - 2.50 Disagree Low

1.00 - 1.75 Strongly Disagree Very Low

Statistical Treatment of Data

The researchers looked at the data collected after collecting the survey responses and

analyzed the data via several statistical methods to ensure a thorough interpretation. The

respondent’s answers were statistically studied to generate frequency tables, percentage

distributions and mean, standard deviation and correlation data analysis.

The researchers intended to conduct the statistical treatment to find out the pattern,

relationships and trends in the financial literacy, budgeting and financial well being of students

based on the variables. The researchers validated the consistency and reliability of the data

they gathered with Cronbach's Alpha. Data were then analyzed through the computation of

the mean, standard deviation, frequencies and correlation coefficients and used as the basis

for interpretation of the data. In addition, the researchers used correlation data analysis to

verify the acceptability of the null hypothesis and to determine the relationship between

variables.

The results were then presented in a clear and easy way, putting the findings into

tables and graphs so that common trends were easy to identify. This enabled the researchers
to present the quantitative results in a structured way, which made the result and its

implications can be understood easier

Ethical Considerations

This section is about ethical consideration of the study and how participants voluntarily

and knowledgeable are involved throughout the study; participants are protected from

influencing factors of the study.

Research Details. This study is focused on the relationship that exists between financial

literacy, budgeting skills and financial well being amongst college students in order to identify

the correlation of their students’ financial management and how these support the education

of the Financial literacy of the students’ education and personal life as well. The study aims to

identify key trends, to provide insights to students in developing better financial management

strategies and greater financial well being. This study is founded on behavioral finance

theories and personal financial management frameworks to explain how budgeting and

financial literacy are related to decision making.

Informed Consent. Students will receive extensive information about this study’s purpose,

procedures, and their rights to participate in the survey prior to them taking part in answering

the survey. In addition, the researchers will also guarantee that every participation is voluntary

and that they can withdraw themselves from participating at any time without any

consequences. A clear consent message where they can agree through a consent agreement

box will appear on the first page before they proceed.

Confidentiality. The researchers will never use a person’s name or other identifying

information without the participant’s consent. To make it easier to answer, names are also

optional. The researchers will store the raw data securely where the access is limited to only

them, and only share the end result in the final report to preserve privacy of every individual.

The researchers will ensure that every student understand that every participation is voluntary
and that they can withdraw at any time without any negative consequences.

Data Use and Anonymity. The survey will remain and be designed to maximize anonymity

in order for the participants’ answers won’t be able to be traced back to them in compliance

with Republic Act 10173, the Data Privacy Act of 2012. The researchers will let the participants

know honestly how the data collected is going to be used before the participants provides the

data and that the data provided is not shared to third parties without consent. Personal

Identifiers that are found in the participant’s data are stored separately where only the

researchers has access to and is not connected towards their survey answers

Respect for Participants. The researchers will also treat all participants with respect and will

not provide questions that would create discomfort or distress to a participant. The researchers

will allow participants to refuse answering the survey. If any of the participants feel

uncomfortable, they have the freedom to stop answering the survey at all. The participants

are also reminded that there are no “right” and “wrong” answers upon taking the survey but

their honesty could contribute to the foundation of the integrity of the research.
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 APPENDIX A

INFORMED CONSENT

Informed Consent Form for Participation in Research Study

Dear Respondents,

We are researchers from Ateneo de Cagayan – Xavier University, pursuing a Bachelor of

Science in Business Administration with a major in Marketing Management and Financial

Management. We are conducting a study titled "The Effect of Financial Literacy and Budgeting

Skills on Financial Wellbeing Among Finance Students of One of the Universities in Cagayan

de Oro". This survey aims to collect information on your experiences with college

organizations, your sense of well-being, and academic achievements.

We would like to invite you to participate in this study by completing the following survey. Your

responses will help us explore the potential impact of organizational involvement and well-

being on the academic outcomes for university scholars like yourself. You are encouraged to

take your time with this decision and to discuss your participation with anyone you trust. If you

come across any terms or concepts you are unsure about, please don’t hesitate to reach out

to us for clarification at any point, whether now or after you have completed the survey.

Thank you for your participation. Please note that by filling out this form, you are consenting

to the collection and use of the information you provide in accordance with applicable data

privacy laws.

1. Data Collection: The personal information collected in this form will be used solely for the

purpose of research analysis.

2. Data Usage: The information provided will be accessed only by authorized personnel

responsible for analyzing data etc. The data will not be shared with third parties without your

explicit consent.
3. Data Retention: All data collected will be stored securely and will only be retained for as

long as necessary to fulfill the stated purpose or as required by law.

4. Data Protection: We are committed to ensuring that your information is secure. Appropriate

measures are in place to protect against unauthorized access, alteration, or disclosure of your

data.

5. Your Rights: You have the right to withdraw from the study at any time without any

repercussions. If you decide to withdraw after completing the survey, your responses can be

removed from the study at your request, provided that your responses are still identifiable at

that time.

If you have any concerns regarding your data or wish to withdraw your consent, please contact

us at [email protected].

By proceeding with this survey, you acknowledge that you have read and understood the

above information and voluntarily agree to participate. You may withdraw at any time without

consequences, and your data will be handled as described above. Thank you for contributing

to this research.

If you would like a copy of this consent form for your records, please let us know.

Signature of Participant (if applicable): _________________________

Date: __________________________
 APPENDIX B

SURVEY QUESTIONNAIRE

The Effect of Financial Literacy and Budgeting Skills on Financial Wellbeing Among Finance

Students of One of the Universities in Cagayan de Oro

Demographic Information

Name (Optional):___________________

Age: ____________________________

Gender: __________________________

We sincerely appreciate your participation in this survey questionnaire. We are fourth-year

college students pursuing a Bachelor of Science in Business Administration (BSBA) under the

guidance of Dr. Jimbo Fuentes for our thesis. This survey aims to support the data collection

for our study, and your participation in answering this survey is crucial to the success of our

study on the effect of Financial Literacy and Budgeting Skills on Financial Wellbeing Among

Finance Students of One of the Universities in Cagayan de Oro.

Instructions: The forthcoming questions on a scale of 4 - Strongly Agree, 3 - Agree, 2 -

Disagree, and 1 - Strongly Disagree. Put a ✔ on the box below that best describes your answer

to the question. Kindly answer each question with honesty.

 Responses

Questionnaires
(1) (2) (3) (4)

Strongly Disagree Agree Strongly

Disagree Agree

Financial Literacy

Understanding of Financial Risks

1. My knowledge of financial risks

helps me manage my money to build
up savings over time.

2. I evaluate the risks of taking on

debt before making borrowing
decisions (e.g., student loans, credit
cards).

3. I assess the pros and cons of

different financial products (e.g.,
insurance, credit) with potential risks in
mind.

4. I am mindful of financial risks when

planning for both short-term and long-
term goals.

5. I am cautious about spending

money on non-essential items due to
potential future financial risks.

Confidence in Financial Decision-Making

6. I am confident in my ability to make

sound financial decisions.
7. I feel assured when choosing
between different financial options
(e.g., savings, investments).

8. I rely on my understanding of
financial information to make informed
decisions.

9. I am comfortable evaluating
financial advice or guidance.

10. I feel confident in managing my

finances without relying heavily on
others.

Budgeting Skills

Income Management

11. I review my budget to meet my

financial targets as well as for
alternatives in my spending patterns.

12. I create a budget plan for myself,

and I stick to it.

13. I manage my income to meet both

short-term and long-term financial
goals.

14. I adjust my spending based on my

income changes or financial needs.

15. I consistently set aside part of my

income for savings or future use.

Expense Tracking
16. Even though I plan to spend, I
exercise self-control in my budgeting.

17. I always checking my income and

spending.

18. I am confident in managing my

personal finances.

19. I know what the basic needs are

and what the wants are.

20. I analyze my spending habits to

improve my financial planning.

Financial Well-Being

Savings

21. I am familiar with the advantages

of saving and investing.

22. I am satisfied with my current

savings level.

23. I am satisfied with the amount of

money I save each month.

24. I prioritize saving money to

achieve financial security.

25. I have clear financial goals that

motivate my savings habits.

Financial Behavior
26. I am disciplined in my budgeting
habits.

27. I often review and adjust my

financial goals.

28. I avoid impulse purchases by

sticking to my budget.

29. I set financial goals and work

towards achieving them consistently.

30. I regularly evaluate my financial

behavior to improve my financial well-
being
 CURRICULUM VITAE

Contact Information

Name: Kyle Christianne T. Viola

Address: Block 2 Lot 13 Abraham St. San Agustin

Valley Homes

Mobile Number: 09608229587

Email Address: [email protected]

Personal Information:

Date of Birth: November 8, 2003

Place of Birth: Cagayan de Oro City

Citizenship: Filipino

Gender: Male

Education:

Primary Education: Xavier University Grade School (2009-2016)

Secondary Education: Xavier University Junior High School (2016-2019)

Senior Education: Xavier University Senior High School (2019 – 2021)

Tertiary Education: Xavier University - Ateneo de Cagayan (2021-Present)

Bachelor of Science in Business Administration Major in

Marketing Management
Contact Information

Name: Jeanie D. Tatad

Address: Carinugan, Mabaylan Compound, Balulang

Mobile Number: 09356796575

Email Address: [email protected]

Personal Information:

Date of Birth: October 21, 2002

Place of Birth: Cagayan de Oro City

Citizenship: Filipino

Gender: Female

Education:

Primary Education: West City Central School (2008 - 2015)

Secondary Education: Cagayan de Oro National High School (2015 - 2019)

Senior High School: Liceo de Cagayan University (2019 - 2021)

Tertiary Education: Xavier University - Ateneo de Cagayan (2021-Present)

Bachelor of Science in Business Administration Major in

Financial Management
Contact Information

Name: Kayla Renee Sabuero

Address: #024, Upper Zone 8, Bulua Cagayan de Oro City,

9000 Misamis Oriental

Mobile Number: 09168664542

Email Address: [email protected]

Personal Information:

Date of Birth: September 22, 2002

Place of Birth: Cagayan de Oro City

Citizenship: Filipino

Gender: Female

Education:

Primary Education: Bulua Central School (2009-2015)

Secondary Education: Misamis Oriental General Comprehensive High School (2015 -

2019)

Senior High School: Misamis Oriental General Comprehensive High School – Senior High

(2019 - 2021)

Tertiary Education: Xavier University - Ateneo de Cagayan (2021-Present)

Bachelor of Science in Business Administration Major in

Financial Management
Contact Information

Name: Julsan Michael B. Santiago

Address: Tibasak, Macasandig, Cagayan de Oro City, 9000

Misamis Oriental

Mobile Number: 09691899908

Email Address: [email protected]

Personal Information:

Date of Birth: May 13, 2003

Place of Birth: Cagayan de Oro

Citizenship: Filipino

Gender: Male

Education:

Primary Education: Pedro “Oloy” N Roa Elementary School (2009-2016)

Secondary Education: Lourdes College Integrated Basic Education Department (2016 –

2019)

Senior Education: Lourdes College Senior High School (2019 – 2021)

Tertiary Education: Xavier University - Ateneo de Cagayan (2021-Present)

Bachelor of Science in Business Administration Major in

Financial Management
 Contact Information

Name: Kim Lester Tejada

Address: Blk 11 Lot 19 PNR Subd Barra, Opol, Misamis Oriental

Mobile Number: 09264957679

Email Address: [email protected]

Personal Information:

Date of Birth: 3/12/2001

Place of Birth: Cagayan de Oro City

Citizenship: Filipino

Gender: Male

Education:

Primary Education: San Benildo Integrated School (2007-2014)

Secondary Education: Wellbridge School (2014-2018)

Senior Education: Xavier University Senior High School (2018-2020)

Tertiary Education: Xavier University - Ateneo de Cagayan (2021-Present)

Bachelor of Science in Business Administration Major in

Marketing Management

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