EFFECTIVE BUDGETING STRATEGIES OF THIRD YEAR STUDENTS OF

BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION IN

ACLC COLLEGE OF BUTUAN ACADEMIC YEAR 2017-2018

In Partial Fulfillment of the Requirements for

Practical Research

Mary Angellin R. Cabanas

Chenie Jane L. Cabrales
Cxybel Zachary L. Delamide
Maria Micaella S. Galea
Jullie Mae Mandag
Cyra Mae M. Ole
Doniarina H. Robles
Elizabeth Ann Sain
Danielle Jo D.Suralta
Angelika A. Uygioco
Shine Marie A. Yaun

Researchers

July 2017
 CHAPTER 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Wealth increases the standard of living of a person. It has

been a part of the flow of modern human kind especially in their

everyday needs. With its absence, life becomes difficult because

every consumer needs to buy food and other basic needs that are

important in everyone’s life. Budgeting is an act of recording

financial and / or non-financial elements into the budget

(Achim, 2009). Hence, the proper way of budgeting is one of the

most basic and effective tool for managing money while spending

it wisely. This allows individuals to determine in advance

whether they will have enough money to spend or not. The success

of budgeting is evaluated in terms of its facilitation of the

realization of the established goals and objectives during the

budgeting process (Brigham & Ehrhardt, 2011).

On the other hand, most people do not have a plan in

budgeting money as they spend based on their wants or needs and

finance anything that cost more expenses than they have

budgeted. Budgeting for some people means no fun because it

unables and limits them to buy the things they want. They never

worried about the money because they are depending on

visualizing for the upcoming money that they will receive. This

problem is faced by the students who do not know how to budget

their money or allowances.

Indeed, this scenario creates the challenge among

researchers, that without knowing proper budgeting, most of the

time students cannot be sure of what to do and how to spend

their money. This picture needs an immediate action, thus, the

researchers take the task of determining the effective budgeting

strategies of Third Year Students of Bachelor of Science in

Business Administration in ACLC College of Butuan.

Conceptual Framework

Today’s living needs income sources to live and to fulfill

daily wants. People need a lot of allocations to sustain these

needs. They have ways to secure their future by means of having

a budget from their allowances or income. There are numerous

definitions of the term budgeting but according to Henley et al

(1992), it is defined and suggested as a plan expressed in

financial terms. It is about handling money which makes it

easier for the people with income or allowance to spend it on

the things that are needed and have a good decision making on

the preferred allocation.

Furthermore, many of the students have a poor treatment of

their allowances or income with regards to budgeting strategy.

The students first spend their allowances or income on their

expenses before allotting a budget for their savings. This

explains that the students have different practiced to their

budgeting strategy such as using debit cards, envelope

budgeting, zero-based budgeting, and proportional budgeting

based towards their stipends.

Theoretical Framework

Horngren et al. (2004) sees budget as the quantitative

expression of a proposed plan of action by management for a

specified period and an aid tool coordinating what needs to be

done to implement the plan. This means that when people spent

too much money without a spending plan, they do not have control

with their money, thus, money now dictates them.

This study is anchored to the Bucket Theory of Andrew

Ehrenberg (1988), who coined the phrase ‘leaky bucket’ to

describe this process: in effect, firms are putting customers

into a leaky bucket, and instead of preventing them from leaking

away through the bottom of the bucket, the firm keeps topping up

the bucket with new customers. This bucket theory of financial

management is a usual approach in planning a family’s financial

future. It gives a systematic way for every family to set and

reach financial goals and it helps build a financial foundation.

Furthermore, Hernando County (2010), illustrates to imagine

five buckets hanging in stair step fashion, each below and a

little to the right of the one above it. As water flows into the

top bucket the bucket begins to fill. When it is full, the water

flows over the edge and into the second bucket which the process

continues. Imagine that each bucket represents one of the basic

financial priorities. The first bucket represents basic needs;

food, shelter, clothing, and transportation. The second bucket

represents financial security and includes an emergency fund and

savings plan. The third bucket represents insurance needs,

including life, health, and property protection. The fourth

bucket represents quality of life. The fifth bucket represents

investments. The water that flows from bucket to bucket

represents the resources a family has.

Each bucket represents the needs and expenses that will be

filled and set an allowance to budget before resources are

diverted to the next bucket. In some instance, the bucket is not

filled because of the budgeting strategies such as: using debit

card, envelope budgeting, zero-based budgeting, and proportional

budgeting based that can affect the way an individual handles

the money.
 Research Paradigm

BUDGETING

STRATEGIES

Debit Card Effective

Students Budgeting
Proportional Strategies

Envelope

Zero-Based
Statement of the Problem

This study aims to determine the factors affecting effective

budgeting strategies of Third Year Bachelor of Science in Business

Administration students in ACLC College of Butuan S.Y. 2017-2018.

This study answers the following questions:

1. What is the average weekly allowance of the students?

2. Where do students learn how to budget?

3. What are the strategies of students on budgeting money?

4. Is the weekly allowance enough to the weekly expenses?

Significance of the Study

The results of this study about the respondents’ budgeting

strategies will serve as storage of information that can be used

as a reference for more useful educational services especially

for the upcoming research related activities. Some target

beneficiaries and expected users of this study are indicated

hereunder.

Business Administration Teachers. The results of the study

will serve as a guide for the teachers especially for those who
are handling accounting subject to upgrade their classroom

instruction and design a module that would help widen the

knowledge of the students when it comes to budgeting.

Parents. The findings of the study will serve as guide for

the parents to sustain exact amount of allowance for their

children.

Students. The result of the study will help the students

especially those who have difficulty in budgeting their money to

improve and balance their expenses in their daily lives. This

research may also help them to enhance in holding money in their

work or own family.

Future Researchers. The results can be used as a source of

information in creating their related literature and studies.

They can use these research findings as enrichment to their

future works on effective strategies of budgeting money.

Scope and Limitations of the Study

This study focuses only in identifying the factors that

affect the effective budgeting strategies among the third year

students of Bachelor of Science in Business Administration who

are officially enrolled in ACLC College of Butuan A.Y. 2017-

2018.

Definition of Terms

The following terms have been defined conceptually for the

purpose of clarifying their use in the study.

Allowance. It refers to the money given by the parents.

Budgeting Strategies. It refers to individual ways or the

methods in spending or allocating the money within a period of

time.

Debit Card. It refers to a modern budgeting strategy that can be

used instead of cash when making purchases that comes directly

from user’s bank when performing transaction.

Discretionary. It is on hand money that is available to use when

necessary.
Envelope. The term refers to the budgeting strategy that is a

process of separating in different operations in an envelope

like paying bills, projects or personal budget.

Expenses. The term refers to the money spent or cost for the

wants and needs or a charge in buying for something.

Income. It is the money received by the individuals as

compensation for their job.

Fees. A payment made to a professional person or to a

professional or public body in exchange for advice or services.

Money. It is a token or item which acts as a medium of exchange

that has both legal and social acceptance with regards to making

payment for buying commodities. It may form of coins, paper

money and banknotes.

Proportional. It refers to the budgeting strategy that the

allowance is divided in percentage and categorized into needs,

wants and savings.

Spending Plan. It refers the plan of budgeting the money or the

stipends to spend and its expenses for a specific time.

Savings. The amount of money that is not spend or used which is

allocated for specific or preferred special purposes.

Stipends. It refers to the specific amount in a week or salary

that is given regularly to an individual.

Zero-Based. It is a budgeting strategy that makes an income

minus the outgo of equal zero spent.