Student Budgeting

Chapter 1
1.1 Introduction
For highschool students (seniors) (18-22 years old), going to college is often
their first experience living independently. These students may need
assistance in developing a number of skills, both cognitive and personal, to
transition successfully into the college environment. The combination of
cognitive and personal skills achieved in college is a measure of student
learning. Cognitive development in higher education traditionally has been
the responsibility of faculty. Faculty members employ in-class techniques
such as classroom lectures, lab experiments, and group projects to facilitate
cognitive development. To promote personal development, student affairs
professionals traditionally have used out of class activities. For instance,
student affairs professionals use students involvement in student
organizations, interactive programs, and small group discussions to facilitate
personal development. In measuring cognitive development, faculty
members use traditional methods such as tests, written reports, and oral
examinations. Since student affairs professionals use less traditional means
than faculty to promote personal development, assessing the personal
development that occurs from activities outside of the classroom has
remained more complicated. Personal development is promoted through
student experiences in leadership roles, living with roommates, and
participating in programs that enhance behaviors students will need in postgraduate life. In order to develop measures of personal growth from programs
and activities sponsored by student affairs units, it is important to consider
what those units are and how they are intended to influence personal
development. Typical units within student affairs divisions include: new
student orientation, residential life, student activities and organizations,
judicial affairs, career development, counseling services, and health
education. New student orientation assists students in their transition from
high school to college. While orientation programs may vary in length from
one or two days to an entire academic year, they typically address the
transition issues first-year students face. Orientation programs primarily
focus on course registration and financial aid, but they also promote personal
development. By offering programs and activities that address substance
abuse, sexual assault, and diversity sensitivity, orientation programs help
students learn life skills they will utilize beyond their first year. Residence life
units also assist students with personal development as part of their mission.
This unit typically strives to provide safe, clean, and educational residence
halls for students. While responsibilities in residence life units vary with each
institution, most units deal with more than simply housing students. In order
to address personal development of residential students, many residence life
units offer programs and activities on communication, interpersonal

relationships, reducing conflicts, problem solving, and time management.

Wellness models have also been used in residence halls to effectively
program effectively . Wellness programs involve emotional, intellectual,
social, spiritual, physical, and career development topics. By including such
broad program topics, residence life units address personal development.
Another unit that promotes personal development is student activities and
organizations. This unit typically handles the student activities and
recreational interests that supplement the universitys academic mission.
Some student activities offices also assume responsibility for community
service and leadership programs. Leadership development, communication,
and event planning are some of the personal development skills promoted by
student activities and student organization offices. Judicial affairs units also
foster personal development among students. Judicial affairs units are
generally charged to create, interpret, and police campus policies and
standards (Sandeen, 1996). These units are also responsible for students
personal development through participation in the universitys judicial
process. Student affairs professionals in career centers promote personal
development through career development activities . From cooperative
education programs where students intern with companies in their field to
mock interviews to resume workshops to career interests inventories, career
development programs help students develop behaviors that may assist
them as they pursue a career. Students also have emotional needs that the
counseling units may address. Counselors help students learn about
themselves, their behaviors, and their interactions with others. Programs and
activities sponsored by counseling centers include workshops that assist
students in dealing with their stress, homesickness, long distance
relationships, and roommate conflicts (Sandeen, 1996). Health education
offices collaborate with various other university and community services to
help promote personal development among students. Health educators
emphasize the importance of good health. Through their programs, students
learn about body image disorders, fitness, nutrition, safer sex, substance
abuse, and sun sensibility among others. Programs inform students so they
can make educated decisions about their health. Students who make healthy
lifestyle choices in regard to their physical well being may avoid health
complications in the future. In general, then, student affairs professionals
offer an array of services designed to promote personal development in a
variety of ways. But do these services address all the skills students need to
succeed in post-graduate life? There is some reason to suggest that certain
elements of personal development are not currently addressed in student
affairs practice. One such element relates to financial management. Students
will need financial management skills if they are to succeed after they leave
college. Some students have mastered financial management prior to
entering college by gaining an understanding of budgeting skills through high
school courses and/or familial influences. Other students may rely on parents
to manage their money during the college years. While some college
students have mastered basic financial management, others may graduate

from college with a limited understanding of how to manage their resources.

Regardless of their degree of expertise in financial management, many
college students may have limited experience handling their money. Since
few traditional-age college students have lived independently before enrolling
in college, they may not have a clear understanding of expected expenses.
For instance, students may fail to budget for textbooks or parking fines. From
telephone bills to car insurance to entertainment, the expenses of college
students vary, but common expenses can be identified to help students
better manage their money. If students do not have an adequate
understanding of expected expenses, they may mismanage their money. A
lack of information about possible expenditures coupled with underdeveloped
financial management behaviors may lead to financial crises. Financial crises
can lead to poor credit ratings, bankruptcy, and unanticipated money
shortages. Therefore, student affairs professionals can significantly help
students by giving them information, teaching skills, and guiding behaviors.
Financial management behaviors include making investment decisions,
managing credit, selecting appropriate insurance plans, and planning a
budget by knowing daily expenses and income (Garman & Forgue, 1988).
After acquiring knowledge about day-today expenses and income, people can
estimate future income and expenses, which allows them to develop financial
management behaviors. Budgeting may be a financial management skill that
college students lack. Indeed, research reveals that more than 50% of college
students cannot properly define the word budget (Buttner, 1997).
Therefore, estimating their income (e.g., salary, gifts from parents), regular
expenses (e.g., credit card bills, insurance, food), and unexpected expenses
(e.g., car repairs, hospital bills) may be a challenge for college students.
While budgeting is one challenging component of financial management,
overall financial management may be even more difficult for college
students. In fact, research has shown that students rank finances as a major
source of stress (Archer & Lamnin, 1985; Murphy & Archer, 1996). Despite
the importance of this topic in the lives of college students, limited research
has been conducted on the financial management skills of such students. The
few studies involving the financial management skills of students focus on
money management, credit card debt, and student budgeting. Specifically,
scholars have discussed the development of the money management
behaviors among high school students (Murdy, 1995; Rush, 1995;
Schuchardt, Danes, Swanson, & Westbrook, 1991; Susswein, 1995; Varcoe &
Wright, 1991). Programs to develop high school students money
management knowledge and behaviors have been established and evaluated
(Murdy, 1995; Rush, 1995; Schuchardt, Danes, Swanson, & Westbrook, 1991;
Susswein, 1995). Research on the overall money management skills of
college students shows that students have very little knowledge about their
finances (Anderson, Camp, Kiss, Wakita, Weyeneth, & Fitzsimmons, 1993;
Archer & Lamnin, 1985; Danes & Hira, 1987; Jackson & Pogue, 1983;
Susswein, 1995). For instance, students cannot explain who controls interest
rates on home loans or how they affect their finances (Susswein, 1995).

Another financial management skill, managing credit, has been studied by

investigating the credit card debt of college students (Brobeck, 1992; Danes
& Hira, 1986; Murdy, 1995; Rush, 1995; Susswein, 1995). Sixty-one percent of
college students own at least one credit card (Susswein, 1995), and research
suggests that college students manage their credit cards in different ways.
Some remit only the minimum balance due at the end of each month while
others pay their balances in full (Murdy, 1995; Rush, 1995). Other scholars
have examined student budgeting behaviors and offered recommendations
on how to improve student budgeting skills. Lohse (1995) suggested that
most college students are unwise spenders with poor budgeting behaviors
who may need guidance in planning their budgets. Students could learn from
budgeting their expenses and income instead of relying on parents or other
care providers to manage their finances (Jackson & Pogue, 1983; Lohse,
1995; Weinstein, 1982). Since understanding ones expenditures and income
is a component of budgeting, Nick (1997) studied the spending habits of
traditional-aged college freshmen and sophomores at the same institution as
the present study. In this study, participants logged their spending over a
three-week period of time. Participants also answered questions concerning
how and where they learned their financial management behaviors. Among
other results, Nick found that some students spend five times more than their
income in a given month, and that most students learn their financial
management behaviors from their families. However, Nick focused on how
and where students spend their money, not whether those expenses are part
of a planned budget. Research examining how students budget their finances
is limited. Literature regarding college students financial management
behaviors and, specifically, student budgeting behaviors is limited. While Nick
(1997) investigated the spending habits of students, further research should
explore student financial planning behaviors. Nick also only examined lower
division students, and few studies have focused on the financial management
of upper division students. Upper division students who have attended
college for at least three years may have developed quality financial
management behaviors that differ from lower division students. Therefore,
this study was designed to address this gap in the existing budgeting
literature by studying the budgeting behaviors of upper division students.

1.2 Significance of the Study

This study will help other student to realize how they spend their budget on
useful reason comparing other answer with significant result . When students
do not budget their money effectively, parents often are required to
compensate for their mistakes. For example, students may underestimate the
cost of long distance phone calls. When telephone bills arrive that students
cannot pay, many make another phone call to their parents to ask for
financial help. Therefore, parents may be interested in the information on

students budgeting behaviors that resulted from this study.

Many student dont realized the importance of budgeting because they just
get thier money from their parent as a allowance. In this research, they will
came up another way of thinking upon their budgeting. The findings may
guide the students about how to effectively budget monies.

1.3 Assumption
This study is conducted based on the following assumptions:
1.) That the student will start creating their own budget plan;
2.) That the students will be dedicated to have their on savings.

1.3 Scope and Delimitation

Scope
This study will conduct seryus interview on a selected 30 highschool
students that contains several question on how they spend thier money on a
daily basis.
Limitation
This study can only have effective result if all the selected students
answered honestly and correctly.

1.4 Definition of Terms

SBCA - Saint Blaise Community Academy. This is the selected where we've
conducted a test.