Home⇛Psychology and Education: A Multidisciplinary Journal⇛vol. 38 no. 8 (2025)

The Influence of Financial Literacy on the Budgeting Practices among College Students in a Private Catholic School: Input for Student Literacy Program

Emmanuel Templa | Roger Andea, Jr. | James Dien Bagahansol | Raffy Carreon | Lovely Comendador | Jammean Labrador | David Joy Miscreola | Almond Justin Tapay | Princess Gayle Regene Uson

Discipline: Finance

 

Abstract:

This study investigates the influence of financial literacy on the budgeting practices of college students at a private Catholic school in Davao City, Philippines. Employing a quantitative descriptive-correlational design, data were collected from 225 randomly selected students using a validated survey instrument measuring five dimensions of financial literacy—financial awareness, attitudes towards finance, financial risk management, financial culture, and financial knowledge and skills—and four aspects of budgeting practices, including goal setting, financial control, decision-making, and financial behavior. Results indicate that students possess a generally high level of financial literacy, particularly in positive attitudes toward money and financial awareness, though managing financial risk remains an area for improvement. Similarly, budgeting practices were rated high, with decision-making identified as the strongest dimension. Correlational and regression analyses reveal a strong, statistically significant positive relationship between financial literacy and budgeting practices (r = 0.85, p < 0.001), with financial literacy accounting for approximately 75% of the variance in budgeting behavior. These findings affirm the Financial Literacy Theory and the Theory of Planned Behavior, underscoring that students with higher financial literacy are more likely to exhibit responsible budgeting behaviors. The study highlights the need to bridge the gap between financial knowledge and practical application, recommending targeted educational interventions such as workshops, simulations, and peer learning to enhance budgeting skills and financial resilience. These results provide valuable insights for developing student financial literacy programs aimed at promoting effective money management, reducing financial stress, and fostering long-term financial well-being among college students.



References:

  1. Accelerating Systemic Change Network (ASCN). (n.d.). Theory of planned behavior (based on Ajzen, 1991). Retrieved November 24, 2024, from https://ascnhighered.org/ASCN/change_theories/collection/planned_behavior.html
  2. Agnew, J. D., Balduzzi, P., & Sundén, A. (2003). Investment choice and risk aversion: Evidence from the mutual fund industry. Journal of Finance, 58(3), 1225–1260. https://doi.org/10.1111/1540-6261.00568
  3. Anderson, G., & Card, K. (2015). Integrating financial literacy in education systems. Education Finance Journal.
  4. Angrisani, M., Barrera-Osorio, F., & Tejada, C. (2023). Financial literacy and risk management in education. Journal of Financial Education, 33(4), 123–145. https://doi.org/10.1002/jfe.1055
  5. Angrisani, M., Burke, J., Lusardi, A., & Mottola, G. (2023). The evolution of financial literacy over time and its predictive power for financial outcomes: Evidence from longitudinal data. Journal of Pension Economics and Finance, 22(4), 640–657. https://doi.org/10.1017/S1474747222000154
  6. Arifin, Z. (2023). Financial behavior and its impact on budgeting decisions. International Journal of Financial Studies, 16(2), 110–120. https://doi.org/10.3390/ijfs16020110
  7. Aydin, A. E., & Akben Selçuk, E. (2019). An investigation of financial literacy, money ethics, and time preferences among college students. The International Journal of Bank Marketing, 37(3), 880–900. https://doi.org/10.1108/IJBM-05-2018-0120
  8. Baker, H. K., Filbeck, G., & Ricciardi, V. (2024). Behavioral finance: Insights into managing financial decisions. Springer. https://link.springer.com/book/10.1007/978-3-030-75730-0
  9. Bangko Sentral ng Pilipinas (BSP). (2021). Financial literacy and inclusion survey. Retrieved from https://www.bsp.gov.ph/SitePages/InclusiveFinance.aspx
  10. Barrett, B., & Ahsan, S. (2023). The impact of financial culture on financial literacy and behaviors. Journal of Economic Behavior & Organization, 198(1), 45–59. https://doi.org/10.1016/j.jebo.2023.02.008
  11. Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2020). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 109, 1–22. https://doi.org/10.1016/j.jbusres.2019.10.012
  12. Chabaefe, N. N., & Qutieshat, A. (2024). Financial literacy, financial education, and financial experience: Conceptual framework. International Journal of Economics and Financial Issues. https://doi.org/10.32479/ijefi.15627
  13. Chen, H., & Volpe, R. P. (1998). An analysis of personal financial literacy among college students. Journal of Economic Education, 29(4), 395–410. Retrieved from https://www.jstor.org/stable/41935368
  14. Christian, P. A., & Fortuna, (2021). Budgeting practices: Its impact on the profitability of small and medium enterprises in Isabela. Journal of Accounting and Finance, 9(3), 336–346. DOI:10.13189/ujaf.2021.090307
  15. Consumer Financial Protection Bureau. (2021). Financial planning and budgeting: A guide for consumers. Retrieved from https://www.consumerfinance.gov/f/202103_financial_planning_and_budgeting.pdf
  16. Creswell, J. W. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (6th ed.). Sage Publications. Retrieved from: https://spada.uns.ac.id/pluginfile.php/510378/mod_resource/content/1/creswell.pdf
  17. De-Valentim, L., Tezel, A., & others. (2024). Exploring financial behavior in the modern age. Journal of Behavioral Finance, 13(4), 78–90. https://www.tandfonline.com/toc/hbhf20/current.
  18. Drury, C. (2013). Management accounting for decision makers. Financial Management Press. Retrieved from https://www.pearson.com/store/p/management-accounting-for-decision-makers
  19. Dudovskiy, J. (2017). The ultimate guide to writing a dissertation in business studies: A step-by-step assistance. Research-Methodology.net. Retrieved from https://research-methodology.net/about-us/ebook/
  20. Fernando, J. (2024). Financial literacy and its role in financial management: A study on budgeting and investing practices. Investopedia. Retrieved from https://www.investopedia.com
  21. Financial Industry Regulatory Authority (FINRA). (2022). Financial literacy among young adults.
  22. Financial Planning Association. (2020). The value of financial planning: A report on the benefits of working with a certified financial planner. Retrieved from https://www.fpanet.org/sites/default/files/2020-09/The-Value-of-Financial-Planning-Report.pdf
  23. Frost, J. (2019). Regression analysis: An intuitive guide for using and interpreting linear models. Statistics by Jim. Retrieved from https://statisticsbyjim.com
  24. Global Financial Literacy Excellence Center, Lusardi, A., & van Oudheusden, P. (2023). Financial literacy around the world. Global Financial Literacy Excellence Center. Retrieved from https://gflec.org/wp-content/uploads/2015/11/3313-Finlit_Report_FINAL-5.11.16.pdf
  25. Hastings, J., & Shapiro, J. (2022). The effects of government financial aid on personal financial behavior. Public Policy Review, 22(1), 42–55. Retrieved from https://www.publicpolicyreview.org/issues/2022-1
  26. Huston, S. J. (2010). Measuring financial literacy. Journal of Consumer Affairs. https://doi.org/10.1111/j.1745-6606.2010.01170.x
  27. Kahneman, D. (2011). Thinking fast and slow. Farrar, Straus, and Giroux. https://us.macmillan.com/books/9780374533557
  28. Kaiser, T., & Lusardi, A. (2024). Financial literacy and financial education: An overview. https://doi.org/10.3386/w32355
  29. Kaiser, T., Lusardi, A., Menkhoff, L., & Urban, C. J. (2021). Financial education affects financial knowledge and downstream behaviors. Journal of Financial Economics. https://www.sciencedirect.com/science/article/abs/pii/S0304405X20301692
  30. Kelly, P. (2024). Setting and achieving financial goals: A guide to financial planning in 2024. Realize Your Dream Blog. https://blog.centrepointalliance.com.au/realiseyourdream/settingfinancialgoalsfor2024
  31. Kelmara Mendes Vieira, A. C. G., & Bressan, A. A. (2020). A proposal of a financial knowledge scale based on item response theory. Journal of Behavioral and Experimental Finance, 28, 100405. https://doi.org/10.1016/j.jbef.2020.100405
  32. Klapper, L., & Lusardi, A. (2020). Financial literacy and financial resilience: Evidence from around the world. Financial Planning Review, 2(1), 1–19. https://doi.org/10.1002/cfp2.1072
  33. Klapper, L., & Lusardi, A. (2020). Financial literacy and financial inclusion. World Bank Research Observer. https://doi.org/10.1093/wbro/lkx010
  34. Klapper, L., & Lusardi, A. (2020). Financial literacy and risk management skills. World Bank Research. Retrieved from https://documents.worldbank.org/en/publication/documents-reports/documentdetail
  35. Kuznetsov, O. V., Ivanov, A. V., Vorovskii, N. V., & Shevalkin, I. S. (2020). Institutionalization of financial literacy of the adult population of Russia. Finance: Theory and Practice, 24(1), 34. DOI:10.26794/2587-5671-2020-24-1-34-45
  36. Lee, M., et al. (2023). Financial behavior and its effect on overall well-being. Journal of Financial Counseling and Planning, 31(3), 52–66. https://afcpe.org/journal-of-financial-counseling-and-planning/
  37. Lusardi, A. (2019). Financial literacy and financial capability: Evidence from the United States. Journal of Consumer Affairs, 53(3), 699–715. DOI:10.1017/flw.2023.13
  38. Lusardi, A. (2019). Financial literacy and the need for financial education: Evidence and implications. Swiss Journal of Economics and Statistics, 155(1), 1. https://doi.org/10.1186/s41937-019-0027-5
  39. Lusardi, A., & Mitchell, O. S. (2011). Financial literacy and planning: Implications for retirement well-being. NBER Working Paper Series. https://www.nber.org/papers/w17078
  40. Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44. Retrieved from: https://www.aeaweb.org/articles?id=10.1257/jel.52.1.5
  41. Lusardi, A., & Mitchell, O. S. (2020). Financial literacy and the demand for financial advice. Journal of Economic Perspectives, 34(2), 54–66. https://doi.org/10.1257/jep.34.2.54
  42. Lusardi, A., & Mitchell, O. S. (2020). The importance of financial education in promoting financial behavior. NBER Working Paper Series. https://www.nber.org/papers/w26844
  43. Mandell, L., & Klein, L. (2012). The impact of financial literacy education on budgeting practices. Financial Literacy Research. https://doi.org/10.2139/ssrn.2257323
  44. Marinov, K. M. (2023). Financial literacy: Determinants and impact on financial behavior. Economic Alternatives, 2023(1), 89–114. https://www.unwe.bg/doi/eajournal/2023.1/EA.2023.1.05.pdf
  45. National Center for Education Statistics. (2022). The condition of education 2022. https://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2022001
  46. National Economic and Development Authority. (n.d.). Financial literacy for Filipinos: Understanding for better living. Retrieved October 9, 2024, from https://nro13.neda.gov.ph/financial-literacy-for-filipinos-understanding-for-betterliving/
  47. National Endowment for Financial Education. (2019). Financial literacy and financial well-being: A national survey. https://www.nefe.org/financial-literacy-and-financial-well-being-a-national-survey/
  48. National Endowment for Financial Education. (2022). Financial literacy for college students: A guide to success. Retrieved from: https://www.nefe.org/impact/NEFE-Annual-Report-2021.pdf https://www.nefe.org/impact/NEFE-Annual-Report-2021.pdf
  49. National Financial Educators Council. (2020). Financial literacy for students: A guide for educators. https://www.nfec.org/financial-literacy-for-students/
  50. OECD. (2022). OECD/INFE toolkit for measuring financial literacy and financial inclusion. https://www.oecd.org/finance/oecd-financial-literacy-toolkit.htm
  51. OECD. (2024). PISA 2022 results (Volume IV): How financially smart are students? OECD Publishing. https://doi.org/10.1787/5a849c2a-en
  52. Osman, F., Ahmad, Z., & Malik, R. (2022). Financial literacy and cultural influences on budgeting skills. Journal of Financial Education. https://doi.org/10.1080/02761339.2022.1875982
  53. Philippas, D., & Avdoulas, C. (2020). Financial literacy and well-being: A study of university students in Greece. Economic Studies Journal. https://www.econstudiesjournal.com/financial-literacy-greece
  54. Potrich, A. C. G., Vieira, K. M., & Kirch, G. (2014). Determinants of financial literacy: Analysis of the influence of socioeconomic and demographic variables. Journal of Financial Education DOI: 10.1590/1808-057x201501040
  55. Radcliffe, G. (2024, April 30). Financial literacy guide: Education, budgeting & investing. Michaelson Law. https://michaelsonlaw.com/importance-of-financial-literacy/
  56. S, S. (2023, August 13). Financial literacy for students: Budgeting, saving, and managing money. LinkedIn. https://www.linkedin.com/pulse/financial-literacy-students-budgeting-saving-managingsnsacd
  57. Sabri, M. F., Wahyuni, D., Khairuddin, Z., & Ali, A. (2020). Financial literacy and money management among young adults. International Journal of Financial Studies, 8(4), 96. https://www.mdpi.com/2227-7072/8/4/96
  58. Sanjeev, S. (2023). Empowering students through financial literacy education. SuperMoney. https://www.supermoney.com
  59. Sconti, F. (2024). Financial literacy and household financial management: An Italian perspective. European Financial Review. https://www.europeanfinancialreview.com/italianhousehold-financial-management
  60. Sogunro, D. O. (2021). The role of financial culture in enhancing financial literacy and decision-making. Journal of Behavioral Economics, 5(2), 98–112. https://doi.org/10.2139/ssrn.3601589
  61. Stolper, O. A., & Walter, A. (2021). Financial literacy, risk attitudes, and investment behavior. Journal of Economic Psychology, 82, 102310. https://doi.org/10.1016/j.joep.2021.102310
  62. Susanto, F. D., & Sandra, R. (2019). Budgeting application for personal financial planning among students majoring in accounting. In Proceedings of the 2nd Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2018) (pp. 123–131). https://doi.org/10.2991/piceeba2-18.2019.13
  63. Theseus.fi. (2023). Fundamental evidence and devices in financial control. Theseus.fi. https://www.theseus.fi
  64. University of Michigan. (2014). Decision-making skills and college student success. University of Michigan Report. https://www.umich.edu/reports
  65. University of Pennsylvania. (2018). Decision-making skills and college student well-being. Penn Research Studies. https://www.upenn.edu/reports
  66. US Financial Literacy and Education Commission. (2020). US national strategy for financial literacy, 2020. ERIC. https://eric.ed.gov/?id=ED611107
  67. Vieira, K. M., Dos Santos, A. C., & Lins, S. L. (2020). Financial literacy and its role in financial decision-making. Journal of Behavioral Finance, 21(3), 228–239. https://doi.org/10.1080/15427560.2020.1714697
  68. Vieira, K. M., Dos Santos, A. C., & Lins, S. L. (2020). Financial literacy and decision-making: An interdisciplinary approach. Journal of Behavioral Finance, 21(3), 228–239. https://doi.org/10.1080/15427560.2020.1714697
  69. Von Stumm, S., Hagerty, S., Wilson, K. D., & Lee, J. S. (2021). Money attitudes and financial capability: A systematic review. PLOS ONE, 16(3), e0242193. https://doi.org/10.1371/journal.pone.0242193
  70. Xeinadin Group. (2023, July 27). Financial controls: What they are, why they matter, and how to get started. Xeinadin Group. https://www.xeinadin.com/financial-controls-what-they-are
  71. Yeske, L., & Buie, D. (2020). The role of budgeting in financial planning and behavior. Financial Planning Review, 7(3), 25–39. https://doi.org/10.1002/cfp2.1075
  72. Yoshino, N., Taghizadeh-Hesary, F., & Nili, F. (2015). The lack of financial literacy in Southeast Asia: Impacts and solutions. Asian Development Bank Reports. https://www.adb.org/publications/lack-financial-literacy-southeast-asia
  73. Zapp, D. (2019). Money matters. EverFi. https://everfi.com/wp-content/uploads/2019/05/MoneyMatters-2019.pdf.

Tools


Copyright © 2025  KITE Digital Educational Solutions |  Exclusively distributed by CE-Logic