Journal of Fundamental and Applied Sciences

Research Article
ISSN 1112-9867 Special Issue

Available online at http://www.jfas.info

FACTORS AFFECTING THE SPENDING BEHAVIOR OF COLLEGE STUDENTS

J. T. C. Bona

Surigao Del Sur State University - Cantilan Campus

Published online: 24 February 2018

ABSTRACT
The purpose of this study was to look at the factors affecting the spending behavior among
college students of Surigao del Sur State University in Cantilan, the northernmost
municipality in the province of Surigao del Sur, Philippines in terms of attitude, family
background, lifestyle and financial knowledge. Subsequently, this study was done to better
understand how these factors influenced the spending conduct of college students and their
financial behavior. This study used the descriptive survey method. A researcher-made
questionnaire was used as the main instrument for data collection. Interviews were also
conducted to answer clarifications, verify the answers of the respondents, and to solicit
additional information. After having studied the data, the researcher concluded that college
students’ spending behavior are greatly influenced by their family background. Parents play a
key role in shaping not only the attitudes about financial management but also life attitudes in
general of their children. It is therefore critical that young individuals begin to learn about
finance during adolescence for them to have the best possible chance to be successful in
adulthood. Having a good financial knowledge is not enough. Success requires a set of
healthy and positive attitude and supportive parents who expect responsible financial attitude.
Keywords: Spending Behavior, College Students, Factors.

INTRODUCTION
Spending behavior of the young individuals and the way they manage their finances would
determine their financial status in the near future.

Author Correspondence, e-mail: jeniteresa@yahoo.com.ph

doi: http://dx.doi.org/10.4314/jfas.v10i3s.12

Journal of Fundamental and Applied Sciences is licensed under a Creative Commons Attribution-NonCommercial 4.0
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J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 143

Developing good financial habits at an early stage will help them best to finish their education
and eventually on how to be financially stable. Managing one’s expenses prevents
overspending, impulsive buying, and paying too much for an item.
Spending behavior is an acquired outline of behavior that is done regularly. Good spending
habit is an important tool to one’s financial success. Spending in a smart way takes your
money to go further and lets you achieve your money goals. Creating a plan is one way to
plan ahead your expenses and will help you prioritize your spending based on your needs.
The financial independence that college students experience may affect their lives in many
ways, not only in their financial and economic well-being, but also in terms of their
relationship with their family, friends, and even the people they meet. It is important to teach
them good financial management skills for them to practice while they are in college and that
they can use them when thay graduate. Monitoring expenses helps them keep track with their
budget.
An individual’s spending behavior is greatly influenced by his/her family. Family members
play a key role on what products to buy and consume. Moreover, the lifestyle of an individual
also affects his/her buying behavior. We often observe and follow the spending habits of our
parents and other members of the family. Lifestyle refers to the person’s way of living in the
society expressed through the things he/she buys or consumes. Moreover, attitude makes up
one’s interest towards spending. Knowing what to spend and why you spend the way you do
is a way to better understand your finances. Furthermore, this helps you keep track of your
budget and your expenses. This is a way of keeping your spending habits in the right track.
The purpose of this study was to look at the factors affecting the spending behavior of college
students in terms of attitude, family background, lifestyle and financial knowledge.
Subsequently, this study is done to better understand how these factors influenced the
spending conduct of college students and their financial behavior.

THEORETICAL BACKGROUND
This paper was anchored on the psychological theories (learning theories) which lies on the
fact that people learn from experience and the results of experience will modify their actions
on future occasions. Among the learning theories come stimulus response theories and
cognitive theories.
According to the contributors of stimulus response theories, learning occurs as a person
responds to some stimulus and is rewarded with need satisfaction for a correct response. They
proved that the most frequent and recent stimuli are remembered and responded. This
J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 144

approach is the basis of reported advertisements. The cognitive theory states that stimulation
and wants are conditional by a consumer’s knowledge, his perception, beliefs and attitudes. It
further states that even after a well thought out purchase the consumer undergo some sort of
discomfort, fear or dissonance. This post decision anxiety is caused by cognitive dissonance
arising from doubts on decisions taken.

RESEARCH METHODOLOGY
This study used the descriptive survey method. A researcher-made questionnaire was used as
the main instrument for data collection. Interviews were also conducted to answer
clarifications, verify the answers of the respondents, and to solicit additional information.
The respondents of this study were the college students of Surigao del State University
Cantilan Campus. Respondents were selected through simple random sampling with the total
number of participants determined using Sloven’s formula.
Percentage was used to determine the simple descriptive interpretation of the demographic
data of the respondents. Weighted mean was employed to determine factors affecting the
spending behavior of college students.
The following scale and qualitative description served as guide:

Table 1. Scale and Qualitative Description

Weight
Scale Interpretation

4
3.26-4.00 Strongly Agree

3
2.51-3.25 Agree

2
1.76-2.50 Disagree

1
1.0-1.75 Strongly Disagree

RESULTS AND DISCUSSION

In terms of the age of the respondents, it can be seen that majority of the respondents were 18
to 20 years old with percentage rating of 62. It was also revealed, that the age with the least
frequency was 15-17 years old.
J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 145

As to gender, it shows that 74% of the respondents are females and 26% of them are males.
Gender distribution indicates that males were outnumbered by the female respondents
because females have the largest number in the students’ population.
Table 2 shows the factors affecting spending behavior of the respondents in terms of attitude.
Most items were rated strongly agree resulting to its grand mean of 3.03. This means that
most of the items are primarily considered all the time. Respondents value the attitude of
saving money. They set aside money for the things they want to buy. They are self-disciplined
enough to spend less of what they have. In addition, they do not buy things that are not
important because they focus on spending on their needs rather than on their wants. They
strongly agree that it is important to think and plan your expenses to eliminate overspending.
On the other hand, they sometimes consider recording their expenses.
Kenny Cunningham in his article, “Does your attitude toward tine affect your spending
habits?” wrote that in general people who are likely to spend their money on experiences as
opposed to possessions report better relationships and higher overall satisfaction and well-
being. In contrast, people with a negative view of the past are more likely to pursue happiness
in life by acquiring material possessions.
Based on the study regarding attitudes conducted by Davies and Lea (1995), it was
determined that male students tended to have a more pro-debt attitude than females.
Attitudinal differences were not detected between men and 222.223 women in the present
study. Moreover, with respect to behaviors, Heck (1984) determined that female students
were more likely to engage in personal finance planning and implementing behaviors. In
addition, it has been discovered that, regardless of gender, students who applied fewer sound
financial principles were likely to experience financial stressors (e.g., inability to purchase
clothing, pay utilities or medical bills, save for emergencies, etc.), but the relationship was
stronger for female students (Hayhoe, Leach, Turner, Bruin, & Lawrence, 2000). Hayhoe et
al. (2000) found that female students were more likely to keep a written budget, shop with a
list, retain bills and receipts, plan spending and save regularly, but they were also more prone
to feel remorse over a purchase and write checks with insufficient funds. The study of Henry,
Weber, and Yarbrough (2001) revealed that female students were more likely than male
students to maintain a budget.
J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 146

Table 2. Attitude

Items µ Descriptive Rating

1. I value saving money. 3.50 Strongly Agree
2. I set aside money in advance for the things I want to 3.35 Strongly Agree
buy.
3. I am self-disciplined in saving a portion of money from 3.26 Strongly Agree
my allowance.
4. I spend less of what I have. 3.26 Strongly Agree
5. I keep record of my expenses. 2.37 Disagree
6. I try to live a simple life as much as possible. 3.44 Strongly Agree

7. I do not spend on things that are not important. 3.32 Strongly Agree

8. I focus on spending on my needs rather than on my 3.42 Strongly Agree

wants.
9. Material things are not important to me. 2.85 Agree

10. I do not borrow money from my friends. 2.44 Agree

11. I do not lend money to my friends. 2.39 Disagree

12. I always spend money wisely. 3.16 Agree
13. It is important to think and plan for your expenses. 3.30 Strongly Agree

14. I maintain a record of my expenses. 2.40 Disagree

3.03
Factor Average Agree

In terms of family background, results proved that most items were rated strongly agree with
a grand mean of 3.22. Most items are the primary consideration all the time. According to the
respondents, they see their parents as financial role models. At home, their parents put
emphasis on the importance of saving money. They were trained by their parents to live a
simple life. When they were young, their parents encouraged them to put their extra coins in a
piggy bank. Their parents sometimes considered of giving rewards if they were able to save
money from their allowance.
J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 147

Previous studies had revealed that parents impart the meaning of money to their children, but
the details of this process are largely absent from current literature. Individual parents can
place value and meaning on money that have implications for their children as consumers, as
parents will likely pass on these beliefs and values to their children. Yet, the implications of
the cultural meaning of money extend beyond the family and apply to larger society, as many
people attempt to critique others and make moral assumptions based on consumer taste.
Details regarding how parents assign cultural value and meaning to money for their children
are largely absent from the research literature, and a clear lack of focus on the origins of such
meaning and values are visibly absent.
Gallo (2005), in his study noted the importance of connecting values and morals (such as the
importance of saving for the future or spending on those in need) to money. However, he does
not go into detail on what values parents typically associate with money. In addition, modern
research omits where these potential values originate from for parents. Sato (2011) stated that
for children, money acquires meaning through social situations mediated by the people
surrounding them, particularly parents. However, Sato did not elaborate on how parents have
come to acquire this meaning for themselves, other than to imply that they originated from
their own parents in turn. By learning more about the origins of how parents value money and
apply meaning to money, the ways in which they convey value and meaning to money for
their own children may become more apparent.
Moreover, Shim et. al., 2010 revealed that parental socioeconomic status has been shown to
be associated with students’ financial attitudes and behaviors, encompassing general financial
well-being and financial competence. Students who report coming from lower economic
backgrounds may be more likely to be financially responsible and display positive behaviors
such as controlling impulse spending (Bosch, 2013). Students from higher economic
backgrounds may be accustomed to a lifestyle in which they do not need to practice saving
money or create budgets (Bosch, 2013).
Table 3 shows the factors affecting spending behavior in terms of lifestyle. The study
revealed that most items were rated strongly disagree resulting to its grand mean of 1.97.
Respondents do not own the latest model of cellular phones and other gadgets. They do not
spend on cigarettes. They do not go shopping on-line. They never consider going to the gym
for physical fitness. However, dining out with friends in restaurants is sometimes considered.
It is because life in the rural area is simple. In the rural area, students have the chance to get in
touch with nature. Outdoor activities are very available. Biking, hiking, jogging, and camping
are relaxing opportunities for students in the rural areas.
J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 148

Magie (2008), in her study, stated that lifestyle is a leisure activities in which individual
participate. The activities may be classified as people oriented, cultural, self-improvement,
community or entertainment. In regard with the number of money spent on shopping by
consumer, retailers track that different shopper groups spend different amounts of money
based on demographic and lifestyle characteristics. It is stated that lifestyle will have an
impact on the patronage behavior of customers in the retail market.
Hassan (2010), added that there is a significant and positive relationship between life style
and spending behavior. They will choose to buy the product which meets their interest in
terms of products and price.
 J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 149

Table 3. Lifestyle

Descriptive
Items µ
Rating

1. I see college as a chance to have fun. 2.60 Agree

2. I love to travel and see new places. 3.15 Agree

3. I go outing with my friends. 2.91 Agree

4. I like to hang-out and attend a party with my friends. 2.56 Agree

5. I buy the latest fashion on clothes, shoes, and accessories. 1.86 Disagree

Strongly
6. I own the latest model of cellular phones and other gadgets. 1.41
Disagree

7. I dine-out with friends in restaurants and other fast-food chains. 1.76 Disagree

Strongly
8. I spend on cigarettes daily. 0.87
Disagree
Strongly
9. I go shopping on-line. 1.32
Disagree
Strongly
10. I avail the discounts offered when shopping on-line. 1.47
Disagree
Strongly
11. I go to the gym for physical fitness. 1.16
Disagree
12. I watch movies or entertainment shows. 2.63 Agree
Factor Average 1.97 Disagree

In terms of financial knowledge most items were rated very good resulting to its grand mean
of 2.77. Respondents had superior knowledge in financial planning, money management,
budget, and personal budgeting. Financial planning involves identifying provisions for
emergencies, savings/insurance held, and financial provision for retirement and anticipated
expenses (health care, education, etc.). Attitudes to financial planning were also covered.
J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 150

Money management aims at identifying degree of financial control, whether people make
ends meet and, attitudes and approaches to financial management.
On the study conducted by Mandell (2008); Mortimer (2003), it was found that formal
financial education during the high school years predicts students’ financial knowledge
(which encompassed both objective and subjective knowledge), a finding that should
contribute to the debate in the field as to whether high school financial education makes a
difference.
Research showed that those with higher financial literacy levels are more likely to save and
plan for retirement (Bernheim, et al., (2001)): Lusardi (2009), indicating that enhanced
financial literacy can have an effect on behavior change. At the workplace level, Bayer, et al.,
(1996) found that retirement seminars offered in the workplace can significantly increase the
participation of employees in voluntary contribution plans and that the effect is higher for
non-highly paid employees. Bernheim & Garrett (2003) also foud that financial education
provided by employers is associated with higher savings in general and in particular with
higher retirement savings.
Beyond its positive influence over pensions and retirement savings, financial education
improves welfare by minimizing financial mistakes with substantial associated costs
(Campbell (2006); Pence & Bucks, (2006)). Gerardi, et al., (2010) showed that those with
better financial literacy are less likely to default on their credits and they even raise the
question on whether the lack of financial literacy was partially to blame for the magnitude of
the 2008 subprime crises in the US. Individuals with more financial knowledge have been
found to choose less costly mortgages and avoid high interest payments and additional fees
(Gerardi, et al.,(2010); Lusardi & Tufano, (2009); Moore, (2003)).

CONCLUSION
After having studied the data, the researcher concluded that college students’ spending
behavior are greatly influenced by their family background. Parents play a key role in shaping
not only the attitudes towards financial management but also life attitudes in general of their
children. It is therefore critical that young individuals begin to learn about finance during
adolescence for them to have the best possible chance to be successful in adulthood. Having a
good financial knowledge is not enough. Success requires a set of healthy and positive
attitude and supportive parents who expect responsible financial attitude.
Based on the findings, the researcher believes that if parents have a better understanding of
how financial literacy can contribute to the success of their children in the future, they might
J. T. C. Bona et al. J Fundam Appl Sci. 2018, 10(3S), 142-152 151

be more directed to instill positive financial behaviors and encourage financial education at
home. Schulman et.al (2005) emphasized that we should also find ways to help parents
understand how to involve their children in the family’s financial decision making thus,
teaching them to make good decisions of their own. Findings suggest that in order to help
students achieve success, parents, schools and stakeholders should form partnership dedicated
in teaching financial practices.
To improve financial habits, students should take some concrete measures to help them keep
track of their expenses. First, they should create their own budget and keep ways on how to
improve it. Keeping a record of expenses will help them monitor how much money they
spend on clothing, entertatinment, and gadgets. They should not forget to allocate money for
savings because a good budget do have savings. Lastly, they should keep a positive attitude.

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How to cite this article:

Bona J T C. Factors affecting the spending behavior of college students. J. Fundam. Appl.
Sci., 2018, 10(3S), 142-152.