The Influence of Financial Literacy on the Budgeting or Spending Behavior of Grade 12 ABM Students

AbstractFinancial literacy is a critical competency for young adults navigating increasingly complex economic environments. This study evaluates the influence of financial literacy, specifically budgeting, saving and investing, and debt management, on the spending behavior of Grade 12 Accountancy, Business, and Management (ABM) students. Utilizing a quantitative descriptive-correlational research design, the study assessed 45 respondents regarding their financial proficiency and self-reported spending habits. The findings reveal that students possess a High level of financial literacy in budgeting and saving/investing knowledge, but only a Moderate understanding of debt management. In terms of behavior, respondents demonstrated a High level of responsible spending, particularly in prioritizing needs over wants and paying debts on time; however, a significant behavioral gap was identified in the Low frequency of tracking daily expenses, indicating a disconnect between theoretical planning and practical monitoring. Pearson correlation analysis confirmed a significant positive relationship between spending behavior and knowledge of both budgeting (p < .05) and saving (p < .05). Conversely, debt management knowledge showed no significant correlation with current spending practices (p > .05). The study concludes that while ABM students possess strong theoretical foundations in asset management which drive responsible spending, they lack depth in debt-related concepts and the practical discipline of expense monitoring. Recommendations include integrating experiential learning tools for expense tracking and intensifying instruction on credit and liability management within the ABM curriculum to bridge the gap between classroom concepts and real-world application.