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INTRODUCTION

Spending is part of everyone’s daily life. In general it is defined as the act of

using money to pay for something or allowing time to pass in a particular place or while

doing a particular activity.

People can never have things or do activities without the act of spending either it

is money, leisure time, effort, energy and other resources. And the most common

spending that everyone commits is money spending.

When we go to a grocery store and bought a candy or when we go to a motor shop

to purchase a luxurious car, we are already spending. It doesn’t matter if we pay a peso or

a way bigger amounts, it is still considered as consuming or spending. People mostly

spend on their psychological needs which include food, clothing and housing. But as the

time passed by, people’s way of spending also evolved. They not just spend on these

needs but also to the things that they want or what we called luxuries. And when it comes

to these things, young adults play a vital role in this kind of spending.

In the past, young adults were a market that the sellers and advertisers largely

ignored. But things have changed these days since young adults became a part of the

industry since they are considered today as the biggest spenders. Marketing firms have

realized that brand loyalty starts at a very young age and is often carried to adulthood. So

today, they commonly produced goods and services that suitable for their young

consumers. They are now the target of the selling and marketing industry.

Young adults as mentioned earlier are some of the biggest spenders, especially

when it comes to food, clothing, latest gadgets and entertainment. They play the biggest

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role as consumers. They have the big purchasing power in a household. Their willingness

to spend money and obtain the latest items makes them one of the largest spending

demographics of consumer goods. This sometimes results to overspending or the act of

consuming money in an excessive manner. This overspending might actually be a case of

careless spending or impulsive buying ─ purchasing goods and services with little regard

for the impact it will have on our financial big picture.

Even if you feel confident that you have things under control, becoming more

aware of our spending can only improve our financial well-being. Not just that, it will

also increase someone’s level of mentality, patience and determination.

This study was conducted to prove otherwise the way of spending of Filipino

young adults and to make them more aware of their expenditures. This was created to be

an eye-opener for those who spend money carelessly.

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RELATED LITERATURE AND STUDIES REGARDING THE YOUNG

ADULT’S SPENDING HABITS

FOREIGN

Based on the article entitled “College Students’ Spending Habits (How To Waste

Money)” by Elana Goodwin written last July 25, 2014. According to research by

Nationwide, 40 percent of college students’ spending is discretionary — meaning it’s

being spent on technology, entertainment, clothes, etc. which is high considering just 26

percent of their spending is on room and board, 19 percent is on their college tuition and

the correlating fees, and another 12 percent is dedicated to other expenses.

One of the biggest money wasters college students spend an exorbitant amount of

money on is coffee as well as other food items. If you indulge in, say Starbucks, every

day, even if you’re only getting a tall regular coffee there, you’re still spending around

$60 a month on coffee.  Rather than shelling out money each day for coffee someone else

makes, college students should buy some kind of coffeemaker and brew their own at

home, indulging in a bought cup of Joe only rarely as it’s an expense you don’t really

need to have on a limited budget (which most students are on).

The same applies to eating out at restaurants. Research shows that students spend

more than $11 billion a year on snacks and beverages, as well as around $5.5 billion on

alcohol annually.

Many college students think of their credit cards as magical passes to free stuff.

This is because they’re either charged to their parents’ accounts or because the students

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don’t feel the immediate hit of cash leaving their hands, and therefore chalk up the

expense as not such a big deal.

“The problem with always whipping out plastic is that you are missing the

tangible feeling that you get with cash,” says Dayana Yochim, Fool.com’s financial

expert. “Think of credit cards as poker chips being used by people sitting at tables in

Vegas. If they had to throw down cash instead, they’d be a lot more careful–the same

thing applies to every day spending.”

Of course, students are spending too much by buying new textbooks, too.

Oftentimes, students feel they need to buy their textbooks quickly and will go to the

nearest book store to buy all the textbooks for their classes, many of them new.

This is a spending habit that students can easily change; more students should

look into buying used textbooks, renting the books they need for the semester, or

exploring ebook and digital options for the books they need.

Finally, students are spending too much on entertainment. Movie tickets, concert

tickets, football tickets, even cable TV all are costly expenses. Instead of spending money

on movies and concerts, check out what campus events and entertainment your school

offers, as many have bands come perform at the school and students can go free of charge

and the same is true for movies as many universities have movie screenings on campus

that are free.

In a study conducted by Rick, Cyder, and Loewenstein published in the Journal of

Consumer Research, participants’ brains were scanned as they pretended to make buying

decisions. Researchers observed activity in an area of the brain called the insula, which is

stimulated when you experience something unpleasant. The more stimulation in the

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insula, the less likely you are to keep doing what you’re doing. When it comes to money,

insula stimulation can stop your spending.

On the other hand, the act of saving – either by having cash in a bank or by

experiencing a significant savings on a product or service – brings savers

intense pleasure. The victory of a good bargain makes everyone feel good, but savers feel

the rush even more since it’s a relief from the discomfort of needing to spend.

Researchers concluded that people who have more insula activity in their brains

are more likely to be savers, and those with less tend to be spenders. And since we tend to

skew to extremes, spenders can end up in financial trouble later in life, and savers can

end up with great regrets. Recognizing which one you are can help you reach a healthier

balance.

In an early experiment on children, commonly called the marshmallow

experiment of the ’60s, researchers at Stanford presented nursery school children with a

tray of goodies that contained marshmallows, pretzels, and cookies. Researchers told the

kids to select one treat, and that if they ate it immediately, they wouldn’t receive any

more, but if they waited only a few minutes, they’d receive another one. If they could

delay their gratification for a few moments, they’d double their candy. They observed the

children until they were adults and learned that the ones who were able to delay their

gratification achieved much more success in life than the ones who wanted instant

gratification.

In “Teenage Consumer Spending Habits” by Lindsay Woolman published on

2010, Woolman stated that Since many teenagers have part time jobs or get an allowance

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from parents, they are ready to spend money, and it can be interesting to learn about teen

consumer spending habits. Teenagers are shoppers who like to have the latest fashions

and technology and since peer acceptance is important to teens, they make a lot of

spending decisions. Getting to know the spending habits of teens shows the great power

they have as consumers.

LOCAL

In an article written by Raymond Peter Campiglio, last May 21, 2015, entitled

“Improving Filipino Spending Habits”, Campiglio stated that Filipinos are known for a

lot of good traits: from our generosity and hospitality, to our respectful and hardworking

nature. Unfortunately, with the good comes the bad. One thing most of us are notorious

about is that we cannot manage our money well.

Because we work hard, we are assured of an income. But our freewheeling

attitude towards money has a tendency to make the fruits of our labour end up for naught.

In addition Campiglio made a list stating the issues that prevent Filipinos from

saving. In order to make something better, we have to first identify the problems and then

take it from there. Please note that the advice given here will not be enough. Patience and

discipline are needed to pull this off. So, what exactly are the issues that prevent us from

saving?

1. Our fascination with uncertain short-term money schemes

Our belief in the lottery and multi-level marketing is an indicator that we

normally only see as far as the next payday and want money fast. This makes us

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go for short term plans that only benefit us for a very limited time. Although a lot

of people do get rich overnight, it does not happen to everyone. Waiting to be rich

will get you nowhere, but waiting for your investment to return will guarantee

your future.

2. Undeserved entitlement

Many people out there believe that since they work hard to earn money,

they should be able to spend every cent. This mindset should be changed to one of

wanting to make money to secure ourselves in our old age. This makes for a more

sound and healthy money management system.

3. Little Financial Knowledge

Oftentimes, people are loath to ask about certain things due to pride or

embarrassment. Money matters are even more difficult to discuss. There is a fear

of letting others know details about personal finances. But ignorance and money

are doomed to crash and burn together. “A fool and his money are easily parted,”

as they say.

4. Not having long-term financial goals

Getting the latest mobile phone and going on vacation next month are

financial goals but they are reallyy short-term ones. Long-term financial planning

is needed. It can be as complex as setting up a business to something as simple as

having Php 1M in your bank account.

5. Keeping up with Joneses

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Sad but true, the inability to “keep up with the Joneses” is perceived as an

indicator of failure to attain financial success. People end up comparing

themselves to friends and neighbors to determine their place in the social class

structure based on material possessions alone.

In the study conducted by Imee Lacuesta entitled “Spending Habits of Filipinos”

(2014), she said that almost everything is connected to money. Everyday people work

hard in order to make more of it. Humans work to earn an income that would enable them

to bring food to the table, clothe themselves as well as indulge in pleasures that can be

obtained only through money. Some of them earn a lot of money at one time but most of

them earn just enough to support their living.

In her study it also stated the factors that cause the problems on why most people

mishandled their money in a daily basis. These are listed as follows:

1. Afraid to say "NO"

2. Buying cheaper than quality products

3. Spending less for basic needs.

4. Buying new materials to be ahead of other.

5. Prefer to live by the “bahala na” lifestyle.

6. Trying to find an excuse not to save.

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Also, Lacuesta provided some tips on how to spend money wisely. All of her

recommendations were based on the research she conducted. The suggestions are stated

below:

1. Create a budget.

2. Plan your purchases in advance.

3. Avoid impulse purchases.

4. Don't be fooled by marketing.

5. Wait for sales and discounts. 

Spending money when people earn it is enjoying. With the help of controlling

money, Filipinos should know how to control their spending habits, if not then they

would end up in a lot of trouble. 

In “Top Spending Habit Mistakes Committed by Filipinos Today” (May 2015)

written by Tyrone Solee, he stated the common mistakes that the Filipinos commit

whenever they spend. Solee said that many Filipinos who are in their late teens and early

thirties don’t fancy the idea of setting aside funds for a probable financial crisis

eventually. Preparing at least half a year’s worth of expenses is recommended by a

number of financial advisers.

However, not only is the concept comical, there’s also a hard time for them to

save for emergency mostly because of social pressure from their friends and colleagues.

They say statements of such nature, but when emergencies arise, they’ll have no choice

but to rely on the remaining balance in their savings accounts.

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Aside from that, Filipinos usually have a habit of shopping, treating themselves

for the hard work that they have done, disregarding their current financial status, and

letting their credit cards have their backs. They rummage through signature stores and

take advantage of the establishments’ sales for items they probably don’t even need at all.

As a result, financial doom is up ahead. Although they may be aware of interest rates,

they rely on their cards anyway. The disadvantage of having credit, however, is

destructive as most do impulse buying every time a sale comes up in major malls.

Another mistake is that some Filipinos have the habit of purchasing the latest

versions of smartphones, music players, tablets, and just about every other gadget. Fast

forward to months ahead when newer versions of these things hit the market, they’ll be

among those who are first in line to take them home. Since they’ll actually be paying for

the same item all over again (only the new model may come with additional features and

maybe a modified design), they’re accountable for making unnecessary purchases.

“We’re busy!” is a common excuse that many Filipinos stick with when asked

regarding paying all sorts of bills beyond due date. Since penalties are issued for late

payments, this could be a problem when the little charges accumulate over time. Even if

they’re really occupied with a lineup of duties, they could still help themselves

financially by submitting their dues on time. Considering we’re already in the digital age

(i.e. a time when online transactions are available), missing deadlines shouldn’t be a

practice.

Rappler, one of the most trusted news-provider online, released an article last

2014 entitled “80% Of Filipino Consumers Curb Spending in Q4 2014”. On the article, it

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is stated that at least 8 in 10 or 80% of consumers in the Philippines adjusted their

spending habits over the past 12 months to boost their household savings, according to

Nielsen’s Consumer Confidence Index report released Monday, January 26.

The Nielsen survey said that more than 6 in 10 Philippine consumers or 62% are

spending less on new clothing, while some are cutting back on expenses by saving on gas

and electricity; delaying upgrading of technology; and switching to cheaper grocery

brands.  Saving and investment also continue to be a priority for the Filipino consumers.

They, along with other Southeast Asian consumers, are considered the most avid savers

in the world, Nielsen added.

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REPRESENTATION AND INTERPRETATION

OF THE DATA

This part of the study contains the data that were gathered on the previous survey.

All the results of the survey conducted by the researcher had gone through an intensive

and careful deliberation for the researcher to come up with a comprehensive

interpretation of the collected data.

TABLE NO. 1: GENDER OF THE RESPONDENTS

GENDER NUMBER OF

RESPONDENT

PERCENTAGE

MALE 3 30%

FEMALE 7 70%

TOTAL 10 100%

ANALYSIS:

In table no. 1, it can be seen that there are a total of ten (10) respondents who

willingly answered the questions provided by the researcher through a survey-

questionnaire. The female population dominated the survey since most of the respondents

are females. Out of 10, three (30%) are males and the remaining seven (70%) respondents

are females.

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Graph 1: Age of the respondents

Q1: What is your age?

13-16 years old

17-19 years old

20-25 years old

60%

30%

10%

ANALYSIS:

In the first graph, the distribution of the survey-questionnaires can be seen based

on the age of the respondents. The researcher randomly selected ten (10) young adults for

her study but gave equal opportunity for each age group to answer her questionnaire for a

just and fair research.

For the first question (Q1) provided on the survey, only one (10%) out of 10

respondents fall on the age group of 13-16. 30% of the respondents or 3 out of 10

answered 17-19 years old. And the remaining six (60%) answered that they were on the

20-25 age group.

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Graph 2: Respondents’ activities during their leisure time.

Q2: During your leisure time in school, what do you usually do?

EatingReadingStudyingListening to musicChatting w/ someoneSleepingOthers

19%

15%

ANALYSIS:

When asked about their activities during their leisure time in school, the

respondents were given a chance to mark more than one activity that they do during their

free time garnering a total of 21 answers from the students.

It is more likely that young adults like to eat, study and sleep during their leisure

time on school since ‘Eating’, ‘Studying’ and ‘Sleeping’ gathered the same results

garnering 19% or 4 out of 21 answers that were provided by the respondents. Out of 21

answers, 3 of them were for ‘Listening to music’ and ‘Chatting with someone’ occupying

15% of the total percentage. Two people (10%) tend to do other activities during leisure

time since they put a check on ‘Others’ when asked putting it on the second to the last

rank. And lastly, one (5%) out of 10 respondents answered ‘Reading’ as the activity that

they do during their leisure time.

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Graph 3: Number of respondents who own an ATM card.

Q3: Do you own an ATM card?

YesNo

40%

60%

ANALYSIS:

When Q3, “Do you own an ATM card?” was asked to the respondents only four

(40%) out of ten of them answered ‘Yes’ and the remaining 60% (6 out of 10) marked

‘No’ as their answer.

The next two graphs contain follow-up questions for this question. It’s either how

much do they receive in their ATM cards (if they have one) or how much do they receive

from their parents on a daily basis if they don’t have an ATM card.

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Graph 3.1: How much do they receive in a week if they have an ATM.

If YES, how much do you receive in a week?

₱100 - ₱500

₱1000 - ₱1500

₱2100 - ₱2500

25%

50%

ANALYSIS:

Out of 4 respondents who answered ‘Yes’ in Q3, where they were asked if they

have an ATM card, two (50%) of them answered P100 – P500 as the amount that they

receive in a week. And one (25%) receives P1000 – P1500 in her ATM in a weekly basis.

Lastly, there is also one respondent that answered P2100 – P2500.

The amounts provided on the questionnaire as choices range from P100 – P4000.

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Graph 3.2: How much money do they receive directly from their parents every day.

If NO, how much do you receive directly from your parents on a daily basis?

₱50 - ₱100₱100 - ₱200₱200 - ₱300

66%

17%

17%

ANALYSIS:

Since 6 out of 10 answered ‘No’ in the question “Do you have an ATM card?”

(Q3), the six respondents were asked how much do they receive from their parents

directly in a daily basis since they don’t have an ATM card.

4 out of 6 (66%) said that they receive an amount of P100 – P200 from their

parents every day. Meanwhile, 17% (1 out of 6) answered P50 – P100 so thus that one

respondent who received P200 – P300 from her parents in a day.

The choices provided for the respondents of the survey-questionnaire range from

P50 – P1000.

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Graph 4: Amount of money young adults spend every day.

Q4: How much money do you spend in a day?

₱50 - ₱100₱100 - ₱200₱200 - ₱300

60%30%

10%

ANALYSIS:

In Q4, it can be seen that 6 out of 10 respondents said that they spend P50 – P100

every day. When asked how much money the respondents spend in a day, 30% (3 out of

10) answered P100 – P200. The remaining one respondent answered P200 – P300 as the

amount of money he/she spend in a day.

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Graph 5: Young adults’ way of spending.

Q5: What do you think of your way of spending?

Normal SpendingOverspending

90%

10%

ANALYSIS:

In Q5, where the respondents were asked on what do they think of their way of

spending, it appears that 90% (9 out of 10) of the respondents think that their manner of

spending is ‘Normal’. On the other hand, the remaining one respondent (10%) thinks that

she ‘overspends’ her money. No one answered ‘under spending’ as their way of

spending.

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CONCLUSION

Based on the data that were gathered and carefully analyzed by the researcher this

part of the research focuses on the results of the survey and the conclusions that were

formed from the data mention.

In the research conducted, the researcher generally concluded that most of the

young adults tend to spend according to their budget. They mostly bought things or spend

their money wisely.

The specific conclusions are stated as follows:

1. The respondents of the study with a total of ten (10) persons were young adults

ranging from 13-25 years of age.

2. It had been observed that most of the respondents of the research were mostly

dominated by the female population and the respondents mostly belong on the age

group of 17-19 years old.

3. It was also noticeable that most of the respondents like to eat, study and catch up

with sleep since they spend most of their leisure time in school doing activities

like eating, studying and sleeping while reading is the least activity that they

chose to do whenever they have their free time.

4. Based on the results of the survey, that only few of the respondents of the study

have their own ATM cards that they use as storage of their money and most of

them just directly ask money from their parents on a daily basis. Since it is more

likely convenient and secured for both parents and young adults to use this

method to observe and control the young adults’ daily expenditures.

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5. Most of the respondents who have an ATM card receive P100 – P500 weekly and

the largest money that a respondent can receive in his/her ATM card is P2100 –

P2500 while for those who ask money directly from their parents every day

receives P100 – P200 and the highest amount that a young adult receive is from

P200 – P300.

6. The results of the survey showed that most of the respondents spend from P50 –

P100 per day. We may conclude that most of the young adults spend money

according to their allocated budget.

7. Lastly, most of them are normal spenders. The respondents spend their money

wisely and enough to the money that they receive.

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RECOMMENDATION

In relation to the study conducted and conclusion presented by the researcher,

here are some recommendations that the researcher came up with:

1. For those young adults that are over spenders it is recommended for you to take

only the cash that you need. If ever you just need P100 for today, just take P100.

Leave the excess money at home or save it. People who have more than what they

need tend to spend more in an impulsive manner.

2. It is also recommended for all the young adults out there to set a financial goal.

Budgeting your money can make you save not just money but also time. People

who have a straight mindset about their spending are more likely to save and

avoid over spending.

3. Learn to say NO. Saying “No” to yourself is an effective way of controlling your

expenditures. Say NO to the things that you don’t need or to the things that are

out of your budget. Saying NO to your friends also include here. When a friend

asks you to go out but you know you just have enough money in your wallet,

saying NO is an option. If you can’t afford it then politely decline.

4. In accordance with the second recommendation, the researcher also suggested that

young adults should shop with a list. List all the things that you need from the

most necessary up to the least. Your necessities should be your top priority rather

than your wants. This will help you to shop for the things that you really need and

to avoid the things that you don’t. Since most of the young adults nowadays are

skeptical buyers, having a list will help them know the things that they have to

buy.

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5. Take an inventory of what you have. Sometimes when a young adult shop for

things that he/she need in a mall or grocery then later on at home see that they

already have that, isn’t that a waste of money? So the researcher strongly suggests

that young adults should check first the things that they own so they won’t have

the mistake of buying the same things.

6. It is also strongly recommended for parents to supervise their children’s

expenditures, if they noticed that their child tend to spend more money they

should have a talk with their child. Ask him/her where he/she spends most of his

money. Earning money is hard so parents should know where the hard-earned

money that they give to their child went.

7. Always think of the future: not in terms of days, weeks, or months, but in years.

Just imagine retiring into a comfortable lifestyle by the age of 50. Isn’t that

something to look forward to? Goals such as this also help people prepare for the

unexpected. Sudden hospitalization or deaths in the family can incur expenses that

may delay original life plans, but having money saved will ease the burden of

having to find a large sum of money in a short period of time.

8. Wait for sales and discounts. Sometimes shopping malls tend to do sales when

there are holidays. You don’t have to buy things (especially if they are not

necessities) as early as they came out of stores. For example, a new model of

phone will be released so it is still expensive, wait for few months and this will

eventually be on sale.