This document summarizes an undergraduate thesis that examines the level of financial literacy among minimum wage earners in Davao City, Philippines. The study aims to determine the characteristics of minimum wage earners and their levels of financial literacy in areas like budgeting, saving, and investing. A survey will be conducted using questionnaires to collect data from minimum wage earners regarding their financial knowledge and behaviors. The results intend to identify any significant differences in financial literacy based on characteristics like gender, education, and civil status. The researchers hope this study can provide insights to help minimum wage earners better manage their money and make informed economic decisions.
FINANCIAL LITERACY, CASH MANAGEMENT AND BUSINESS GROWTH IN KAMPALA CITY COUNC...ectijjournal
The study sought to establish the relationship between financial literacy, cash management and business growth in Kampala city council authority. The study design used was descriptive and correlation in nature. The study revealed a moderately high level of financial literacy, a moderate level of cash management and a moderately high level of business growth among the businesses investigated. Financial literacy confirmed in adequate knowledge on how to expand and capitalize money in addition to warranting a portion of their regular income saved in assets. It was noted that most businesses grow out of paying their debtors promptly, using loaned capital efficiently and perhaps cash planning practices. In the long run, most businesses end up into bankruptcy associated to using borrowed funds for improving standards of living. It is a common practice in Uganda for one to emerge as a promising investor, live a posh life and registered in bankruptcy within less than a decade of his business career. The study recommended that the Private Sector Uganda, Uganda Manufacturers’ Association, Uganda Chamber of Commerce; and other trade organizations should include training business men and women around the country on sound financial management. There is need to further sensitize the public and business owners in particular on the risks associated with borrowed capital. Business owners should further avoid running for credit because it is cheap and available. Business owners should always align their borrowed capital with business objectives lest they divert funds intended for business growth into improving their standards of living by spending lavishly.
FINANCIAL LITERACY, CASH MANAGEMENT AND BUSINESS GROWTH IN KAMPALA CITY COUNC...ectijjournal
The study sought to establish the relationship between financial literacy, cash management and business growth in Kampala city council authority. The study design used was descriptive and correlation in nature. The study revealed a moderately high level of financial literacy, a moderate level of cash management and a moderately high level of business growth among the businesses investigated. Financial literacy confirmed in adequate knowledge on how to expand and capitalize money in addition to warranting a portion of their regular income saved in assets. It was noted that most businesses grow out of paying their debtors promptly, using loaned capital efficiently and perhaps cash planning practices. In the long run, most businesses end up into bankruptcy associated to using borrowed funds for improving standards of living. It is a common practice in Uganda for one to emerge as a promising investor, live a posh life and registered in bankruptcy within less than a decade of his business career. The study recommended that the Private Sector Uganda, Uganda Manufacturers’ Association, Uganda Chamber of Commerce; and other trade organizations should include training business men and women around the country on sound financial management. There is need to further sensitize the public and business owners in particular on the risks associated with borrowed capital. Business owners should further avoid running for credit because it is cheap and available. Business owners should always align their borrowed capital with business objectives lest they divert funds intended for business growth into improving their standards of living by spending lavishly.
Running Head FINANCIAL LITERACY1FINANCIAL LITERACY10.docxwlynn1
Running Head: FINANCIAL LITERACY 1
FINANCIAL LITERACY 10
Financial Literacy
Professor’s Name
Student’s Name
Course Title
Date
Financial Literacy
Introduction
Any average investor of American origin usually makes financial decisions, specifically when it comes to retirement and saving. Some of the costly errors include the failure in making sure that there is receipt of the employer matching contribution towards your saving, inadequate saving, the payment of excess interest costs and excessive fees and the substandard diversification (Deuflhard et al., 2019). The evident prepondence portrays a picture of the general inadequacy of understanding for return, risk and diversification in the stock markets.
The financial literacy is the capability of understanding and correctly applying the financial management skills (Deuflhard et al., 2019). The act of managing debts properly, calculating interests properly, effective planning for finances as well as understanding the time value of money is what financial literacy entails.
The resulting poor financial behaviours and the financial knowledge low levels with the effect being seen in the troubled context of the pension’s disappearance and the improved personal responsibility in terms of the retirement plans well seen in the defined patterns of contribution plans is a good proof that financial literacy is becoming a common phenomenon. In the modern finance, there is a component of punishing financial ignorance and rewarding of the do it yourself component of necessitated by financial knowledge. The lack of regulation of the financial markets and the comparatively easy access to credit has increased further the appetite for financial knowledge (Calcagno et al., 2019). Most individuals are now responsible for making their own investment choices and could end erring in security selection and the asset allocation or even both.
Financial Literacy background information
Financial literacy refers to the ability to effectively and efficiently manage and evaluate your finances so that you make prudent decision geared towards attaining your life goals and achieve the financial well-being (Calcagno et al., 2019). When you are financially literate, you will protect yourself from being exploited either through questionable investments or identity fraud and this allows you to meet the everyday or basic needs.
How financial literacy affects your daily life
There are five basic components or areas in personal finance that people need to acquint themselves for them to become financially stable (Deuflhard et al., 2019). Capturing and making these areas part of your life is important in many aspects of our day to day life and that include;
Income and money
Education, career choices and job skills all affect our finances and income. There has always been a trade-off between effort and time, rewards and money. Time will always be in tandem with money. When you working for a living which many of us.
Effectiveness of Personal Finance among Selected Skilled – Working Expatriate...Dr. Amarjeet Singh
In the study entitled “Effectiveness of Personal
Finance among Selected Skilled – Working Expatriates in the
Kingdom of Bahrain”, the research sought answers on the
following specific problems and drawn inferences that
relatively identified factors on personal finance. Specifically,
the research included fifty respondents having twenty – five
(25) males and twenty - five (25) skilled – working expatriates
who are connected with various companies in the Kingdom.
Through survey – questionnaires, data were gathered,
collected, and were used as basis of analysis subject to
statistical treatments that include frequency count, weighted
means and comparison through t – test.
The study has inferred the level of effectiveness of
personal finance among selected skilled – working expatriates
as Effective with a combined average weighted mean of 4.20
and with a test result of Not Significant leading to the
decision to fail to reject the null hypothesis. while the degree
of seriousness of the problems encountered by selected skilled
– working expatriates revealed that their top difficulty is
financial wellness factored by salary reasons, compensation,
debt and liabilities and the inflations in the prices across
almost basic demands and social and living costs.
This was the initial discussion question and below are 2 students answ.docxkdennis3
This was the initial discussion question and below are 2 students answers to that question. I need at least a one paragraph response to both student 1 and 2 on their answers to the discussion question. At least 2 paragraphs in total, one in response to each student.
Initial Post
Section 1: The Statistical Question of Worker Preparation for Financial Management Responsibilities
Considering material in the required reading and the PBS Frontline video, “Can You Afford to Retire?", reflect on a typical worker’s age and preparation for a decision to contribute to a retirement plan, including choosing investment options. Discuss at least two reasons why it is statistically
unlikely
that Nadja will reach her retirement goals.
[Hint: You might consider statistics regarding educational preparation of the American population and the likelihood that individuals are familiar with investment planning tools and concepts. You might also think about which varieties of individuals are best prepared to meet these goals and the techniques used to build retirement savings to a high value, as discussed in the video, “Can You Afford to Retire?.â€]
Section 2:
The Work of the Professional
Financial
Manager
Even if you are not a professional financial manager, you employ financial management tools and concepts in your personal life. Remembering that the functions of a financial manager are to manage cash and credit, issue and repurchase financial securities; decide how to allocate capital for new and existing projects (capital budgeting), and manage financial risk; comment on the similarities between corporate and personal financial management that you learned about in this module and discussion.
Student 1:
All,
Section 1: The Statistical Question of Worker Preparation for Financial Management Responsibilities
As a large percentage of the current population is unable to save for retirement and continues to live paycheck to paycheck, Nadja faces a similar if not worse situation attempting to save for retirement. Torpey (2018) states that, "the medium income for all individuals holding a bachelors degree is $60,000." Morrisey (2016) also states "Nearly half of all working-age families have zero retirement account savings." Even if Nadja was making the medium income at her skill level, the possibility to reach her retirement goals are extremely limited. Assuming Nadja makes the medium $60,000 broke up into 12 months at $5,000 monthly pre-tax, she will be limiting herself and still face living paycheck to paycheck and/or not saving for retirement if she needs to make large financed purchases, such as a home or car. These large financed purchase can also be amplified onto of Nadja's lack of financial knowledge which causes her to be vulnerable to financial traps set in place by large institutions that can take advantage of her not knowing the financial ins and outs, which unsurprisingly happens a lot more often than we would like.
Impact of Financial Literacy Program on Financial Behaviour A Case Study of S...ijtsrd
Financial literacy education is an essential requirement for all individuals and especially for professionals like the nurses in order to prevent unruly financial behaviour which results in financial difficulties. However, these difficulties are not solely caused by low income but lack of financial literacy education which negatively influence financial behaviour. They can also result from poor financial management, such as a lack of financial planning or the improper use of credit which results from inadequate financial literacy education. Given the increasing interest in financial literacy education in many developed nations for their profession, it is logical that the significance level of financial literacy education should increase in developing countries. Even in certain nations, financial literacy has been designated as a national programme. Due to the fact that financial literacy has a positive influence on inclusion and financial behaviour, knowledge in financial literacy education becomes a serious issue. In Ghana, many professionals do not give attention to financial literacy education and this affects their finances leading to debt, liabilities and untold financial hardships. This makes financial literacy education a vital imperative. Hence, this paper establishes that financial constrains does not only result from inadequate income, but also owing to lack of financial literacy education leading to improper financial behaviour in financial management, such as insufficient financial planning or improper utilisation of finances. It was concluded that possessing knowledge in financial literacy education is associated with the adoption of effective financial behaviour in financial management practices. Hence, the study examines the impact of financial literacy education program on the financial behaviour of some selected nurses in the Ashanti region. Daniels Owusu | Bernard Owusu "Impact of Financial Literacy Program on Financial Behaviour: A Case Study of Selected Nurses from Public Hospitals in Ghana" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-8 | Issue-1 , February 2024, URL: https://www.ijtsrd.com/papers/ijtsrd62409.pdf Paper Url: https://www.ijtsrd.com/management/accounting-and-finance/62409/impact-of-financial-literacy-program-on-financial-behaviour-a-case-study-of-selected-nurses-from-public-hospitals-in-ghana/daniels-owusu
Impact of Financial Literacy Program on Financial Behaviour A Case Study of S...ijtsrd
Financial literacy education is an essential requirement for all individuals and especially for professionals like the nurses in order to prevent unruly financial behaviour which results in financial difficulties. However, these difficulties are not solely caused by low income but lack of financial literacy education which negatively influence financial behaviour. They can also result from poor financial management, such as a lack of financial planning or the improper use of credit which results from inadequate financial literacy education. Given the increasing interest in financial literacy education in many developed nations for their profession, it is logical that the significance level of financial literacy education should increase in developing countries. Even in certain nations, financial literacy has been designated as a national programme. Due to the fact that financial literacy has a positive influence on inclusion and financial behaviour, knowledge in financial literacy education becomes a serious issue. In Ghana, many professionals do not give attention to financial literacy education and this affects their finances leading to debt, liabilities and untold financial hardships. This makes financial literacy education a vital imperative. Hence, this paper establishes that financial constrains does not only result from inadequate income, but also owing to lack of financial literacy education leading to improper financial behaviour in financial management, such as insufficient financial planning or improper utilisation of finances. It was concluded that possessing knowledge in financial literacy education is associated with the adoption of effective financial behaviour in financial management practices. Hence, the study examines the impact of financial literacy education program on the financial behaviour of some selected nurses in the Ashanti region. Daniels Owusu | Bernard Owusu "Impact of Financial Literacy Program on Financial Behaviour: A Case Study of Selected Nurses from Public Hospitals in Ghana" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-8 | Issue-1 , February 2024, URL: https://www.ijtsrd.com/papers/ijtsrd62409.pdf Paper Url: https://www.ijtsrd.com/management/accounting-and-finance/62409/impact-of-financial-literacy-program-on-financial-behaviour-a-case-study-of-selected-nurses-from-public-hospitals-in-ghana/daniels-owusu
This study aimed to determine the levels of financial literacy of Small Scale Farmers and to establish
the link with their usage of financial services.
The OECD/INFE financial literacy measurement household telephone survey questionnaire was adapted and
administered to Small Scale Farmers. Financial literacy was measured by adding up scores in financial
knowledge, financial attitude and financial behaviour. Financial service usage was assessed by asking
respondents whether the respondents had used any of the specified services. Pearson’s Chi-square test for
independence was used to test the hypotheses as categorical variables were mostly involved.
Managerial oversight rather than inadequate finance has been ascribed as the necessitating fundamental to business failure in less-developed countries. Finance plays a crucial role in the establishment, growth and sustainability of business. However, it is delicate; its inadequacy or excess is as dangerous asineffective management. This paper examines the importance of finance function, the imperativeness of financial strategies and the special role of finance manager in business sustainability. In addition, a reflection is made of the financial management practicesof businesses in African countries, and recommendations made for changes required for their sustainability.
PREDICTING REGULAR SAVING BEHAVIOR OF THE POOR USING DECISION TREES – AN IMPO...SCHOLEDGE R&D CENTER
Microfinance in India is a rapidly growing industry, focusing however, only on the credit side of finance without an adequate emphasis on Microsavings. There are multi-pronged efforts underway to bring the poor under the ambit of the financial system. Financial literacy efforts are also pursued by NGOs to make the poor understand the importance of savings in their lives. 125 million new bank accounts have been opened as of February 2015 under the new scheme of the government of India, 72% of which show zero balances. Having a savings account is only a first step in the financial inclusion efforts. Getting people to save requires a combination of financial literacy, hand holding and discipline aimed specifically at those who may not save regularly, left to themselves. Towards this end it is important to identify the regular saving potential among the poor. This study has developed a predictive model using decision trees to group the poor into potential regular and non-regular savers. The study was based on survey research administered to 700 respondents in Tamil Nadu, South India. The decision tree is able to predict with 90% accuracy, the regular saving potential among the poor. The paper has strong implications for banks, NGOs and others concerned with microsavings, financial inclusion and financial literacy. Categorizing the poor into potential regular and non-regular savers can enable target group specific efforts which can have symbiotically benefitting outcomes to the poor and the institution.
1
Annotated Bibliography
2
Annotated Bibliography
Annotated Bibliography
Al-Khasawneh, A. L. (2014). The Role of Knowledge Resource Diversification Strategy Management in Improving Organizational Learning among Employees at the Commercial Islamic Banks in Jordan. International Business and Management, 8(2),101-111.
The publication by (Al-Khasawneh, 2014) gives invaluable insights on how the process of knowledge and information sharing can be of great importance in making any given organization realize efficiency; this the article highlights with reference to the banking sector. Al-Khasawneh also mentions that the benefits of knowledge resource diversification strategies cut across the entirety of the corporate divide and can be used successfully with any organizational manager that is looking to gain decent returns and maintain customer loyalty. With commercial Islamic banks in Jordan as a sure example, the author mentions that knowledge resource diversification strategy management can only be realized when an organization is willing to spend on Knowledge Management. Even though expensive in the short run, modern knowledge management systems often prove to be beneficial in the long run. Besides, the author recommend that any firm looking to realize knowledge diversification has to come up with a culture within the internal environment that is supportive to knowledge sharing.
Filson, D., & Olfati, S. (2014). The impacts of Gramm–Leach–Bliley bank diversification onvalue and risk. Journal of Banking & Finance, 41, 209-221.
Filson and Olfati, in their publication, give reasons as to why banks diversify their product lines every now and then. The author’s site that most banks diversify their product lines so as to encourage customers to take them up, ie to increase attractiveness and for the sake of helping customers to get customized product packages. Earlier, most banks noted that some customers were hesitant to do business with them solely because they were not sure of the risks involved and were doubtful of whether they would realize the value for their money. Bank diversification approaches such as the Gramm–Leach–Bliley bank come in to accord customers risk transference and better proceeds for their savings and investments.
Lam, T. Y., & Tipping, M. (2016). A case study of the investment yields of high street banks. Journal of Property Investment & Finance, 34(5), 521-534.
In their publication, Lam and Tipping interview various bank administrators on what diversification is all about and how the process is beneficial to banks or any other business. It is quite noteworthy that all the respondents interviewed gave responses that resonated; describing diversification as the process of increasing options for customers i.e. the realization of varied product lines. For most banks and businesses at large, diversification is a top priority because bad performance in or an economic slump affecting any one of the products will not be disastrous.
...
1. THE LEVEL OF FINANCIAL LITERACY OF MINIMUM WAGE EARNERS
IN DAVAO CITY
An Undergraduate Thesis
Presented to the Faculty of the
College of Accounting Education
Submitted By:
Ricky James D. Dayot
Paolo Vic T. Elarcosa
John Carlou J. Perez
Katherine S. Uy
(14-026)
2. ABSTRACT
The government of the country still regulates the minimum wages in every region with
different amounts in accord to the industry needs. The industries which are covered
by the labor code law tend to adopt the constitution in paying of salaries or wages as
compensation. There is a minimal amount of inducement to be legally provided with
the approval of the authorized personnel. Generally, the intent of this study is to
determine the level of Financial literacy of minimum wage earners in Davao City in
spending strategies. In this regard, they may know more the functional tool of being
aware about basic cash management. Through the use of scientific approach relevant
in this thesis, financial management and decision-making theories applied, minimum
wage earners parlance’ resources and the usage of questionnaires dealing with the
concern of the respondents. This thesis seeks to improve the insufficient way of
managing financial affairs of minimum earners in numerous ways for the betterment
of wisely dealing cash funds. By raising awareness and understanding to the
minimum wage earners. This aims to contribute sufficient and appropriate solutions
to solve blind-minded individuals pertaining money against cognizant.
Keywords: Financial literacy, minimum wage earners, Davao City
3. Chapter 1
INTRODUCTION
Rationale of the Study
It has been observed that more individuals when it comes to money are
accountable of their own financial security and confronting, for the enhancement of
understanding as to economic phenomema, with ever more complex financial
mechanisms. Individuals, nowadays, are facing in a circulation of newly outsourced
investment products and the financial markets burst out its complexity..
There are now an expansion beyond national borders on the opportunities in
investment, allowing individuals in a broad range of assets and currencies to invest.
Though, as the financial crisis has made clear, it becomes very hard to navigate this
type of financial system, and the consequences of mistakes can be devastating. The
need to decide, economically, must have an understanding about financial matters.
The results of an improved saving behavior and decision making, is because of having
a programs on financial education, much can be done to improve these programs'
effectiveness (NBER, 2008). According to Alan Greenspan (2010, para. 2), “The
generation and economic problem today is then said to be due to unaware about
financials.
Financial education plays a key role in improving the lives of individuals.
Financial Planning has become not just a convenience but also an essential survival
tool. Contextually, the standard of living does not matter but it is somehow and
somewhat strategic techniques on knowledgeable individuals persist and endeavor in
the accurate way of everyday living (Jacob, 2000).
4. In the records of Department of Labor and Employment, there is a variety of
numbers of Minimum Wage Earners in Davao City, which includes salesperson,
construction workers, security guards, and other low-income earners. These earners
need to learn about broad definition of money on every errand for their guidance.
People are usually guided as to their attempts to budget, to outlay or to save their
money up to the utmost financial management (IFAC, December 2012).
Very few low-income earners elect to take a course that will improve financial
literacy and after all, people cannot be constrained to sit down and concentrate long
enough to learn what they must know to look out for themselves (Dr. Mandell, 1999).
The study regarding low-income earners shows how knowledgeable and
functional they are in the future choices and decisions on managing money. The
continuous involvement of minimum wage earners on their ability to make economic
financial decisions pertaining money affairs caught the attention of the researchers to
conduct a study. This eagerly induces researchers to enlighten and to aware their
minds about the monetary refinement of minimum wage earners as their bases for
future economic actions.
OBJECTIVE OF THE STUDY
This study determined the level of Financial literacy of Minimum Wage
earners in Davao City for spending strategies.
Specifically, this study sought to arrive at the following objectives:
1. To determine the characteristics of minimum wage earners according to:
1.1 Sex
1.2 Educational Attainment
5. 1.3 Civil Status
2. To find out the level of financial literacy of the Minimum Wage Earners in
Davao City in terms of:
2.1 Budgeting
2.2 Saving
2.3 Investing
3. To find out the significant difference of the financial literacy of Minimum
Wage Earners when analyzed according to their characteristics.
Statement of Hypothesis
Ho: There is no significant difference in the level of financial literacy of Minimum
Wage Earners when analyzed according to their characteristics.
Significance of the Study
This study provided information on the Minimum Wage Earners knowledge
about economic matters in Davao City as the basis for spending strategies. This study
will benefit the following:
Municipality of Davao. The City Hall’s office will use this information as the basis
for setting the minimum payroll for Davao Minimum Wage Earners.
Construction Workers. The result will provide information to get more money from
their small earnings, which includes spending strategies.
Security Guards. The findings will give guidance to secure their funds in disbursing.
Salesperson. The study will guide and inform this earner in managing financial
affairs.
6. DEFINITION OF TERMS
The following are the definitions used in this study:
Budgeting. A plan for how much money you have and how much money you spend.
COLA (Cost of Living Allowance). It is an adjustment on wages, for the changes in
the cost of living, to create economic balance.
Davao City. It is a city in Mindanao, Philippines and grouped, but governed
independently, with the province of Davao del Sur. The city covers about 182
barangays in totality, composing 11 administrative districts under three congressional
districts in all.
Economic Decisions. A decision that depends on the economy that is currently in
place.
Financial Literacy. It is the possession of knowledge necessary to understand
concepts related to money; refers to the ability of individual, for an effective judgment
about the usage and managing of their money, to make informed and effective
decisions.
Investing. It is a commission of money or capital in order to acquire a financial
return; to spend for future advantage and devote for benefit.
7. Investment. It is related to saving and deferring consumption; an act of putting
money, usually over a longer term, into something with the expectation to gain in
return of the invested amount.
Minimum Wage Earners. Individuals, employees or workers receiving the lowest or
minimum wage fixed by legal authority or by contract as the least.
Monetary Matters. It is something in which money is concerned, such as financing,
budgeting or saving.
Savings. A detailed plan to be use as a guideline for spending and saving of future
earnings and expenses.
8. Chapter 2
Review of Related Literature
Related Literatures
Through reading of literature and studies, this research has something to put
up in the present study. This covers the discussions regarding Minimum Wage
Earners, financial education on budgeting, saving, and investing, investment strategies
and economic decisions.
Minimum Wage Earners. Since the seminal work of Stigler on 1946,
economists know that the minimum wage can have a positive impact on employment.
For a longer period, it has been known that the minimum wage can have a negative
impact on employment (Benjamin et. al, 2012).
The Operation HOPE, Inc., A Global Fleader for Financial Dignity (2007)
published its mission, for the empowerment of wealth-less, on eradicating poverty in a
way of establishing “silver rights” or the right to financial literacy. The mission in
expanding the economic opportunity for the uninformed communities gives
betterment of the financially viable quality of life for individuals, families and
communities.
Wages and salaries are the compensation of the workers equivalent to their
work rendered. While business owners and workers are allowed to have a stipulation
on the amounts to be considered as salaries, these must not be then lower than the
minimum wage set by the Regional Tripartite Wages and Productivity Boards
(RTWPBs) in the Philippines. In the records of National Wages and Productivity
Commission under Region X1, provides integration under W.O. No. 16 into the basic
9. wage of the P15.00 COLA; and a new COLA of P15.00/day trenching P5.00 upon
effectivity and P10.00 effective May 1, 2012. Thus, the daily income before of
P286.00 Basic Minimum Wage Rates/day plus its New COLA as per wage order
totaling P301.00 is the new stipulated rate of a low-income garner can have.
Financial Literacy. The Australia and New Zealand Banking Group Limited
(ANZ) in its survey defines financial literacy as the capacity to make effective
decisions from its core informed judgements regarding the use of money and
managing it(2008, p. 6).
Early evaluations noted by Douglas Bernheim and a series of co-authors, he
suggest that the increasing participation in planned savings shall have a workplace
financial education initiatives (Bayer, Bernheim, Scholz, 1996; Bernheim, Garrett,
2003), while adult propensity to save has increased significantly in financial education
(Bernheim, Garrett, Maki, 2001). Moreover, the publication of Jumpstart Coalition
(2012) stated that the more education one has, the more his or her average income
goes up.
Experience and understanding is the basis of knowing how, with some
definitions merely requiring familiarity. Still others, such as stated by Mandell (2007)
and Lusardi and Tufano (2008), emphasize a judgment and decision-making aspect of
financial literacy. Lusardi and Tufano also focus under debt literacy as one of the
specific form of financial literacy. Moore (2003) goes so far as one basis in providing
an increased level of knowledge and other aspects of financial literacy is the practical
experiences obtain by an individual.
10. However, consumers often think that they know more than they actually do
(OECD, 2005) – a common concluding acts that has been demonstrated not just
concerning about money, but in the range of knowledge and abilities as well across its
course (Alba & Hutchinson, 2000; Yates, 1990; Lichtenstein, Fischhoff, & Phillips,
1982).
Finally, Lusardi and Mitchell noted that some studies, as a component of
financial literacy tests, have explicitly included numeracy (Lusardi & Mitchell, 2007a,
2007b; ANZ Bank, 2008; NCEE, 1999). As explained considering numeracy relating
to and in support of financial literacy, or basic number skill (Lipkus, Samsa, &Rimer,
2001; Peters et al., 2006), to be a distinct construction of financial capabilities.
Budgeting. Budgeting plays a biggest key in managing well the money as
discussed by Caldwell in its article. Caldwell added that many people, even just a
simple term budget, are often turned off. However, budgeting can actually save you
money, and allow you to have more to spend by helping you to make the most of your
money. (Caldwell, 2013)
In a wiseGEEK article, mentioned that oftentimes, flexibility is the means to a
succession on a well-budgeted and accounting of money matters. Payment of those
bills should be an inflexible element due to some certainty of expenses which are
fixed in amount. Furthermore, it added that money allocated for one purpose could
not be reallocated or another if flexible budgeting is improperly used or never have
been implemented.
Jeremy Vohwinkle (2012) suggested creating a budget; take control of the
money so that it does not control you. He exerted also so as to spend too much
11. money on one expense may make a shortage on another expense, which would yield
results that are less than expected.
Saving. According to Dustin (2011), improper planning to save money can be
the reason that makes the next generation could be worst if the generation previously
becomes unproductive and thus only the individual or small community scale are
working. One generation saving money, factually, can’t undeniably make them better
off. Money, as explicitly stated by Dustin, is neither long-lasting good nor prosperity
of living in its broad sense.
In an article entitled How and Why to save a Money (2001), it expresses that
if you want to achieve a huge financial targets from just a small knowing of how and
why then saving money is essential to be observe. It was suggested in the article that
it is important for an individual’s financial resources to make their investments wisely
protected for the improvement of their financial security in future times.
Investing. In Daisy Slan and Veniayetta Aikens study, it shows that the more
you have to invest, the more money you are likely to end up having. Moreover,
Shamin Preeda insisted that proper investment planning is more likely to have any
chance of success in financial endeavors. The most important helping tool specified
by Shamin Preeda is to understand how economic finances works in order to have a
sound investment portfolio, and so thereby, individuals will be familiar what are the
various types of investing techniques.
In the article of Canadian Securities Administrators, it was stated that
everyone defines money indifferently with the others—personal freedom, the
individual's wants of life is one factor which senses of security or the ability to afford
12. the things. Having a proper and workable investment plan can help get where the
salaried individuals want to be. [Canadian Securities Administrators in an article
Investing Basics-Getting started, 3rd part]
Investment Strategies. In an annotation of The Independent Financial Portal
(Financial Web) stating that investment strategy, to ensure the succession of financial
goals satisfaction, deals with the overall long-term guidelines that sets up and attempt
to implement financial solutions.
Indifferent considerations on different background of individuals affects the
decision pertaining to investment strategiey. In deciding the investment strategy of the
investor during lifetime which is based on the financial periods, commonly utilize is
the 'life cycle approach' (“Investing your money,” 2003).
Economic Decisions. Since World War, economic theory of decision making
was considered the major paradigm in making decisions (Schoemaker, 1982;
according to Plous, 2002). David Ingram expresses that economic decision making is
the fundamental basis to individuals’ desire somehow, while minimizing costs, to
ensure the maximization of benefits. This balancing act is a skill that takes practice to
master, and is referred then as maximizing value. [David Ingram, Demand Media,
2012] Oftentimes, people usually want more things than they can afford. This forces
them to make economic judgements and decisions.
Hallerbach and Spronk (2003) emphasizes thoroughly in its study that most
financial-economic decisions made consciously, with unambigous and constant drive
to do “good”, “better” or even optimal decisions. Nevertheless, despite the availability
of financial economic theory, many decisions do not earn these type of qualifications
in practice which could be valuable in future judgements.
13. Theoretical Framework
The study was affixed in the research paper of Annamaria Lusardi and Dr.
Mandell (2009), National Financial Educators Council (NFEC), and Jumpstart
Coalition. This study was sustainably associated with the following theories:
Annamaria Lusardi (2007) stated that individuals need knowledge beyond the
fundamental financial concepts discussed above in order to make saving and
investment decisions competent. Furthermore, the relationship between risk and
return of money is the basis to strengthen individuals understanding. She noted that
basic knowledge is the objective of any designed policy to promote financial literacy.
The NFECs Financial Literacy Standards were developed to help individuals
achieve a state of financial capability and implement the learned money management
lessons in the 'real world' so as to provide then clearer steps. Through collaborative
efforts from the NFEC's team of educators, financial professional and community
leaders, these financial education standards represent the best practices in the
industry.
For personal economic well-being, the JumpStart Coalition asserts that
individuals should be able to take individual responsibility. They insisted that, broadly
speaking, person possessing financial capacity should know how to: find, evaluate,
and apply informative economy; set goals and plan financial affairs to achieve them;
enhance potential income-earning and saving abilities; use effective financial
services; meet financial obligations; and profound and protect wealth.
14. Level of Financial Literacy
Budgeting
Saving
Investing
Characteristicsof Minimum
Wage Earners:
Gender
Civil Status
Educational
Attainment
Conceptual Framework
The study is intended to establish the relationship between the individuality of
Minimum Wage Earners and the level of financial literacy as the basis for investment
strategies for future economic decisions. The Figure 1 below illustrates the
independent and dependent variables.
Figure 1. Conceptual Framework Showing the Variables of the Study
15. Chapter 3
METHOD
Presented in this chapter are the methods and procedures used in making this
research. It gives information about the device which is useful in the data gathering
and the statistical tools used for the analysis and interpretation of the data being
gathered.
Research Design
This study will use descriptive quantitative method to assess the level of
financial literacy of minimum wage earners in Davao City. Descriptive research that
are going on or trends that are evident in an opinions held in processes, is concerned
with conditions, practices, structures, differences or relationships that exist (Best
1970).
Research Respondent
The 40 respondents of the research were the minimum wage earners in Davao
City with 2012 barely minimal monthly earnings. These earners will be organized
according to the factors affecting their financial literacy level.
Research Instrument
A modified questionnaire, adopted form the study of a certain researcher, was
used in collecting the data. The first part of the instrument used is the profile
background of the respondents and the second part is their level of financial literacy
under budgeting, saving and investing. It is composed of five questions in each
16. independent financial aspect that will be answerable by level of frequency and if it is
not attainable it will be treated as blank.
Research Procedures
Data Gathering. The sampling plan will include the sample of 40 minimum
wage earners, with different kind of jobs, in Davao City.
Suitable questions modified from related research was used in creating the
survey and individual questions will be formed. The survey will be comprised
of 15 questions in totality, which will be related to the respondent’s
knowledge about financial matters.
The confidentiality of the respondent’s survey was assured. We will be giving
them the option of being anonymous in an understanding that people’s
consciousness may hinder the answering of survey.
After the researchers have gathered the data, Likert scale was used in the
questionnaire to determine the respondents’ behavior in a subject matter
provided and to determine the level of their financial literacy.
The data gathered will be analyzed using the scaling below.
Figure 2. Data Interpretation Scale
Range Level Interpretation
0-1 Very Low Financially illiterate
1.1-2 Low Below Average in Financial Literacy
2.1-3 Moderate Average in Financial Literacy
3.1-4 High Above Average in Financial Literacy
17. 4.1-5 Very High Financially Literate
Statistical Tools
Treatment of Data. The following statistical tools was used in the
computation of data.
1. Percentage/Frequency. This was used to identify the ratio of characteristics of
the Minimum Wage Earners in Davao City in terms of sex, educational
attainment and civil status.
2. Mean. This was used to determine the financial practices and applications of
the Minimum Wage Earners in terms of budgeting, saving and investing.
3. Analysis of Variance (ANOVA). This was adopted to test the
hypothesesdeveloped in this study. Moreover, this was used in identifying the
significant difference of the level of financial literacy of the Minimum Wage
Earners.
4. T-test. This was used to measure the significant difference in the level of
financial literacy by Sex, Educational Attainment and Civil Status.
18. Chapter 4
RESULTS AND DISCUSSIONS
The study’s population is composed of minimum wage earners in Davao City.
There are 40 respondents with three different characteristics. The table below
summarizes the gender, educational attainment and civil status of the respondents and
its respective percentages.
Table 1 Frequency Distribution of Respondents
Descriptive Value Frequency Percentage
Sex
Male 21 52.5
Female
Total
19
40
47.5
100
Educational Attainment
Elementary Graduate 2 5
High School Graduate 16 40
College Graduate 22 55
Total 40 100
Civil Status
Single 20 50
Married 20 50
Total 40 100
The table exemplifies that the population of the male respondents acquired
more than half of the entirety with the ratio of 52.5:47.5 as to sex. The table illustrated
also that the college graduates dominated the total respondents which represents 55%
of the totality. High school graduates comprise 40% and elementary graduates
resulted to a 5% of the population under the educational attainment variable. The table
shows above, when analyzed by their civil status, that the population of the single and
married respondents got the same percentage showing a ratio of 50%:50%.
19. Table 2.1 Level of Financial Literacy in terms of Budgeting
Item Statement Mean Descriptive Level
How frequent are you budgeting your labor-worked
money?
4.13 Very High
Do you consider the benefits over cost? 3.80 High
Do you consider the value of the thing you buy? 4.20 Very High
Do you compare your previous expenses with the expenses
in present?
3.60 High
Do you keep records of your income and expenses? 2.88 Moderate
Overall 3.72 High
The table above shows the level of financial literacy of the minimum wage
earners in the field of budgeting, which is from moderate to very high under each item
statement thereupon. The following results indicate that the minimum wage earners
have an overall average or mean constituting 3.72 in totality which describes as high
in descriptive level in this field and practicing it at the same time.
Table 2.2 Level of Financial Literacy in terms of Saving
Item Statement Mean Descriptive Level
Are you saving? 3.70 High
Do you properly spend your money every transaction? 3.83 High
Do you consider how much you saved and spent last
month?
2.88 Moderate
Do you keep a record of all your daily savings regularly? 2.60 Moderate
How frequent are you saving than spending? 4.00 High
Overall 3.40 High
The table 2.2 shows the level of financial literacy of the minimum wage
earners in the field of saving which is from moderate to high under each item
statement on the specification above. The result signifies that they are saving their
money frequently as indicated above by its overall mean approximately 3.4 and
therefore resulting to an overall high in descriptive level of knowledge about this
field.
20. Table2.3 Level of Financial Literacy in terms of Investing
Item Statement Mean Descriptive Level
Are you aware of the business world? 3.45 High
How frequent are you dealing with money management? 3.95 High
Do you make any business if in case you have extra
money?
3.13 High
Do you properly manage the time and money? 3.53 High
Do you make decisions for future expenditures and
savings?
3.95 High
Overall 3.60 High
The table 2.3 shows the level of financial literacy of the minimum wage
earners in terms of investing their idle or extra money. The results indicate that
though they are earning less or at the least, the respondents’ level of knowledge in this
field is high when analyzed in its mean approximating 3.6 of the overall item
statement thus minimum wage earners are knowledgeable when it comes to investing
money affairs.
Table3.1 Significance of the Difference in the Level of Financial Literacy of
Minimum Wage Earners by Sex
Indicators Male Female F-Value P-Value Decision=Ho
Budgeting 3.81 3.62 0.72 0.4 Accept
Saving 3.29 3.53 1.39 0.246 Accept
Investing 3.47 3.75 1.7 0.201 Accept
Overall 3.52 3.63 0.42 0.52 Accept
The table 3.1 shows that the level of financial literacy of minimum wage
earners in terms of budgeting, saving and investing is considered to be high because
of the resulted overall analysis of data when analyzed by sex. In analyzing the data
using ANNOVA, the researchers always consider the P-Value in order to arrive at the
decision whether to accept or to reject the null hypothesis. Wherein the chance of
21. accepting the null hypothesis is always attainable under the independent variable
illustrated above.
Table3.2 Significance of the Difference in the Level of Financial Literacy of
Minimum Wage Earners by Educational Attainment
Indicators
F-
Value
P-Value Decision=HoElementary
Graduate
High School
Graduate
College
Graduate
Budgeting 3.6 3.74 3.72 0.03 0.97 Accept
Saving 3.3 3.29 3.49 0.47 0.63 Accept
Investing 3.3 3.43 3.75 1.29 0.29 Accept
Overall 3.4 3.48 3.65 0.57 0.57 Accept
The table 3.2 above shows a high level of financial literacy of the respondents
when analyzed according to educational attainment in each indicator. The overall
result thereby is the likelihood of accepting the null hypothesis. The probability of
getting 95% of correctness in the computational process under the P-Value is always
attainable in each aspects of financial literacy in the independent variable illustrated
above.
Table 3.3 Significance of the Difference in the Level of Financial Literacy
ofMinimum Wage Earners by Civil Status
Indicators F-Value P-Value Decision=Ho
Single Married
Budgeting 3.69 3.75 0.07 0.789 Accept
Saving 3.48 3.32 0.6 0.442 Accept
Investing 3.62 3.58 0.03 0.857 Accept
Overall 3.6 3.55 0.07 0.787 Accept
The table 3.3 shows above that the level of the minimum wage earners
financial literacy resulted to a high level of frequency after considering the data
gathered, using ANNOVA, under budgeting, saving and investing, when analyzed
22. according to civil status. The presumption herein is to accept although there is a
difference but it is not significant at all. The decision made to accept the null
hypothesis is greater than the approximate error set on the overall results illustrated
under the independent variable above.
23. Chapter 5
FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
Summary of Findings
The researchers had conducted a survey, composing five questions in each
dependent variable, to 40 minimum wage earners. The gathered data, with the use of
the research instrument, has been analyzed and interpreted to determine their level of
financial literacy.
1. Majority of the respondents were male and most of them were college
graduates. While the ratio between single and married respondents was noted
equally.
2. Using the Mean Deviation, the level of Financial literacy of the overall result
in the three independentvariables is high. The result therein indicates that their
knowledge in financial aspects is all above the average of the minimum wage
earners.
3. Using the ANOVA and the t-test approach, results showed that there is no
significant difference in the level of financial literacy of Minimum Wage
Earners when analyzed according to their profile, thus the null hypothesis is
accepted.
Conclusion
This research showed that though it has differences in totality, each
independent variable with respect to determining the level of financial literacy of the
minimum wage earners, this cannot be considered as significant at all. In addition, this
research shows that even though respondents earned within the minimum amount of
24. wages per day stipulated in the Regional Tripartite Wages and Productivity Boards
(RTWPBs), they still do budgeting, saving and investing intheir idle funds for future
spending.
Recommendations
In line of the findings and conclusions as the basis of the study, the following
recommendations were drawn by the researchers:
1. The Municipality of Davao should set the bases for the wages of Minimum
Wage Earners per day and they should make an additional amount of pesos for
the betterment of their spending strategies.
2. The minimum wage earners, such as Construction Workers, Security Guards
and Salesperson, should keep track on their daily recordings for their future
spending and expenditures strategy.