College Students and ideal monthly budget: A preliminary study

on the satisfaction level of semi-autonomous youth regarding

budget
Keywords: College Students, Semi-Autonomous Youth, Monthly Budget,
Expenditure Behavior, Ideal Budget, Limited source of income

ABSTRACT

The research paper broadly focuses on the satisfaction level of college students and semi-
autonomous youth pursuing studies regarding their budgeting capacity. Talking further about
it, we have conducted a survey and asked some simple questions related to ideal monthly
budget for students, area of expenditure, ways to increase the supply of budget. We are
mainly focusing on College students and semi-autonomous youth. College students and semi-
autonomous youth can be described as the people in the age group from 18-25 in this age
group there can be some individuals who are studying and working at the same time.

INTRODUCTION

We have chosen this topic of “College students and their monthly budgets” because since
we all are studying away from our homes so budgets and monthly expenditure plays very
important role. Since we all stay away from home so there are many expenses which one
starts to incur due to staying away which one does not realize when he/she lives at home.

We want to know what all are the monthly budgets of the students as how much money do
they get from their home and what all are the areas of their expenditure and where do in their
opinion they spend most amount of the money, so as to get full knowledge of the expenses a
student occurs during his/her college life and how does there is change in the expenditure of
the students as they are promoted from year after year and whether or not there is different

expenditure style for different genders and how each one divides their budgets and spendings.

A personal or household budget is an itemized list of expected income and expenses that

helps you to plan for how your money will be spent or saved, as well as track your actual
spending habits.[ CITATION JER20 \l 1033 ]. This is known as monthly budget.
Most of the people in this age try to understand what all are their financial conditions and try
to improvise their living expenditure in a way which is supported by all and also at this age of
life students try to control their expenditure and try to divide or list the things and then spend
money accordingly so that they do not overspend or spend money within the money allotted
to them.

The tool used to conduct the research is an online survey among the young adults from
various parts of the country. This helped us cover a wider population with people with
different approach towards money and spending habits. The survey was taken by many
people and the results have been discussed below in the paper. This research is different from
the other researches that have been conducted in many ways.

OBJECTIVES

The main objectives of the research are as follows-

 To determine the monthly budgets of the students. The research is conducted to

determine the monthly budgets of the students of different years, different ages,
different genders so as to know what all are the requirements and demands of the
students.
 To determine different areas of expenditure of a student. The research is also
conducted to determine the area of expenditure as where all the students spend most
of their money and how it is different with age and gender.
 To know how do students gets funds. The research is conducted to determine how
do students arrange or get the funds that they spend as whether they do part time jobs,
or are they fully dependent on their parents for the money.

HYPOTHESIS

The research can have multiple Hypothesis statements when seen from different angles.
They have been given in the cases below.

CASE 1

H0 - Ideal Monthly Budget is different for male and female students.

H1 - Ideal Monthly Budget is not different for male and female students.
 Objective - To determine the difference between male and female ideologies
regarding ideal budget.

CASE 2

H0 - Majority of college students prefer internships or part time jobs to increase their
level of limited income.
H1 - Majority of college students do not prefer internships or part time jobs to increase
their level of limited income.

CASE 3

H0 – College Students spend their major part of limited income on food.

H1 – College Students do not spend their major part of limited income on food.

The research papers that we have used to determine these objectives and that support our
research have been explained in detail below. They have helped us determine the various
factors that determine the budgeting capacity of college students and semi-autonomous
students. It has also helped us formulate questions for our survey which we conducted
through google forms.

LITERATURE REVIEW

In the research paper we are broadly focusing on the behavior of college students and semi-
autonomous youth pursuing studies on the basis of their budgeting capacity. Talking further
about it, we have conducted a survey and asked some simple questions related to ideal
monthly budget for students, area of expenditure, ways to increase the supply of budget. We
are mainly focusing on College students and semi-autonomous youth. College students and
semi-autonomous youth can be described as the people in the age group from 18-25 in this
age group there can be some individuals who are studying and working at the same time.

In order to conduct the Literature Review, the article we are referring to is the ‘Student
budgeting and spending behaviors: A comparative study’ the basis on which the study is
conducted is common or similar to our research. As the manner in which the college students
or semi-autonomous youth manage their money is based on several factors such as age,
personality traits, and knowledge. College students are in a unique situation because they
have restricted incomes and high expenses; therefore, they manage money differently. The
findings of this research paper were that there were significant differences between males and
females on whether they had a monthly budget for expenses. Females were found to be more
likely than mans to create a monthly budget. Addition to these males were more likely to
spend on eating out in comparison to females. Females intended to have a daily planner and
on the other side males do not.

The brief description of ‘Student budgeting and spending behaviors: A comparative

study’ from its abstract:

“The more knowledge students have about their financial responsibility and status the less
likely they are to be in debt. In “Borrowing Against the Future: Practices, attitudes and
knowledge of financial management among college students” Minomonaco finds college
students tend not to have a budget or calculate credit card bills based on their actual spending.
For example, there was a significant number of students that did not know their SES or how
much they would owe in student loans when they graduate. Also, only 36% of students with
credit cards reported paying off their credit cards bills monthly. Although, college students
are concerned about their future financial status; 67% of freshmen at four-year colleges or
universities have concerns about paying their tuition. This is the highest amount of concern
expressed in over a decade. There are many groups of students that accumulate and perceive
debt differently, for example, how they used credit cards. Women are more likely to report
having a budget then men, but women more frequently accumulate higher amount credit card
debt and total debt. Also, majority students perceive themselves as more in control of their
finances than minority students perceive themselves. Some variables did not show differences
in the accumulation of debt but perceptions varied among groups. Demographics variables,
GPA, and number of hours worked did not play a role in the amount of debt acquired but,
students with a higher GPA and/or those who worked more were more worried about their
financial status. In our study, we look at the printing budget put in place by a small
Midwestern liberal arts college. Through 2007 students were allowed unlimited printing from
campus computers. Beginning in the fall of 2008, students were charged 4 cents per page
printed from a campus computer. Students were also given a printing allowance provided by
the school of 14 dollars, the equivalent of 350 pages. Any printing over 350 pages the student
would be charged 4 cents per page. Through a survey we evaluate the changes and
behaviours of student printing and budgeting. The printing system changed for the classes of
2010 and 2011 from unlimited printing to having a budget. For the other two classes
surveyed, the class of 2012 and 2013, the budget was always in affect while attending the
college. We assess how the printing budget affects these classes differently and determine the
implications of a printing budget, particularly against other spending habits.”[ CITATION Mat11
\l 1033 ]

Further we took an article ‘Budgeting for College Students’ by Katy McWhirter to

support our research. In this article it is stated that determining expenses is a valuable step for
any budget, and students are likely to have several fixed and variable expenses each month.
When creating a budget, it’s important to consider which (if any) expenses are covered by a
parent or guardian and subtract those from your monthly expenses. Following are common
expenses students may expect to be responsible for:

Fixed Expenses

• Housing: Whether students live in dorms or in off-campus accommodations, this is

likely to be one of their largest monthly expenses.

• Books: Usually purchased at the beginning of the semester, books can add up to a
little or a lot depending on whether students purchase them used or new.

• Utilities: Electricity, gas, water, cable and internet bills typically are covered for
students living in on-campus housing, but those with their own accommodations off campus
should tack these onto their list of monthly expenses. All students should also include that
monthly cell phone bill.

• Transportation: Students with vehicles must consider costs related to auto loan
payments, insurance, maintenance and repairs, fuel and parking, while those who rely on
public transportation need to think about monthly bus, light rail or subway passes. Anyone
who may take advantage of ride-sharing services (cabs, Uber, Lyft, etc.) or who shares costs
as part of a carpool also should consider those occasional expenses.

• Savings: The image of poor college students is a pervasive one, but it need not be
true. Those who plan and budget wisely actually can save money while in school. Even if it
doesn’t seem like much, it does add up.

Variable Expenses
• Groceries: Cooking at a dorm may not be completely feasible, but students can buy
snacks or microwavable meals to cut back on costs. Those whose housing situations include
full kitchens can significantly cut expenses by buying groceries and preparing meals at home
rather than eating out.

• Dining out: Whether heading out with friends or picking up dinner after a long day of
classes, students will inevitably do a lot of dining out in college.

• Childcare: Some students have children who must be cared for while they are in
class, and they may either take advantage of on-campus child care or hire independent help.
Either way, this is an expense that must be considered.

• Entertainment: Activities and entertainment expenses such as concerts, lectures,

movies, TV or music subscription services and venue admission costs can add up and should
be factored in.

• Medical/Health: This category includes insurance premiums, prescriptions and

regular expenses at such stores as Walgreen’s, CVS or Rite Aid. Some students may also
need to pay for memberships at gyms or health clubs.

• Clothing: Transitioning from winter to summer clothes or finding a special outfit for
an upcoming event can be costly, but students can save money by having their families ship
existing clothes or checking out secondhand stores.

• Laundry: Unless they live in apartments equipped with washer/dryer units, most
students need to pay to use these machines in their dorms, in common areas or at
laundromats. Additional costs for dry cleaning may be necessary as well.[ CITATION Kat \l 1033
]

The next research paper we took as the basis is ‘Exploring the Food Expenditure Patterns
of College Students’ by Joel Fatto Amoakon, Godfrey Ejimakor, Deric Hardy this study
indicates the behavior of college students and semi-autonomous students regarding
expenditure on food. The findings of this research paper were that the high proportion of
income that college students spend on food is mostly likely due to their limited income.
Given that food is a necessity, only a small proportion, about 8 percent, of additional income
received by students will be spent on food. Budget allocations to food decrease by about one-
half percent for each percent increase in student income. During periods of rising incomes,
businesses that sell food to college students could get more of the student dollar if they find
ways to diversify into selling non-food items.[ CITATION Amo16 \l 1033 ]

The next article we opted to support our study is ‘Money Management Practices of College
Students’ by Henry, Reasie A.; Weber, Janice G.; Yarbrough, David. This article
conveys that majority of the college students are living on the edge of financial crisis and
many of them do not possess the knowledge needed to manage their money. While students
at the university, they are constantly accumulating debt, through student loans and credit
cards. They may not realize how their current debt can negatively affect their credit rating.
[ CITATION Hen \l 1033 ]

The research paper ‘Does the Life-Cycle Theory Really Matter? Saving and Spending
Habits of College Students’ by Kaitlin Karlson supported our study as it focused on
expending behavior of college students. This study looked at the financial behavior of college
students and recent alumni as it relates to economic theory and the life-cycle hypothesis.
With student loans increasing dramatically and credit card debt becoming more of a reality, it
is critical to understand what drives financial stability or instability after graduation. The pool
of 230 participants was composed of 174 women and 56 men, representative of eight years of
graduating classes, 2009-2016, from Connecticut College. Students comprised 29.1% of the
participants and alumni made up the remaining 70.9%. Participants completed a survey
including three quantitative measures on credit card use, financial well-being, and attitudes
toward debt, as well as an extensive demographic questionnaire regarding spending and
saving habits. Results suggested that participants overestimated future salaries, making it
difficult for them to smooth current consumption based on future earning as predicted by the
life-cycle model. Debit and credit were not the primary methods of payment of the
participants who reported a preference for using cash. Students who were confident
financially were more responsible with their credit cards and more tolerant of debt. The life-
cycle hypothesis, although a theoretically sound model, was not upheld by participants in this
study.[ CITATION Kai13 \l 1033 ]

‘Factors affecting the spending behavior of college students’ by J.T.C Bona served as the
basis for the study as this research paper is based on the study of factors determining the
spending behavior of college students. The purpose of this study was to look at the factors
affecting the spending behavior among college students of Surigao del Sur State University in
Cantilan, the northernmost municipality in the province of Surigao del Sur, Philippines in
terms of attitude, family background, lifestyle and financial knowledge. Subsequently, this
study was done to better understand how these factors influenced the spending conduct of
college students and their financial behavior. This study used the descriptive survey method.
A researcher-made questionnaire was used as the main instrument for data collection.
Interviews were also conducted to answer clarifications, verify the answers of the
respondents, and to solici231`23t additional information. After having studied the data, the
researcher concluded that college students’ spending behavior are greatly influenced by their
family background. Parents play a key role in shaping not only the attitudes about financial
management but also life attitudes in general of their children. It is therefore critical that
young individuals begin to learn about finance during adolescence for them to have the best
possible chance to be successful in adulthood. Having a good financial knowledge is not
enough. Success requires a set of healthy and positive attitude and supportive parents who
expect responsible financial attitude.[ CITATION JTC08 \l 1033 ]

The next research paper is ‘Financial Management Issues of College-Aged Students

Influences And Consequences’ by Katharine Nicole Widener. This research paper is
based on the study of college students. As college students have acquired a reputation of
irresponsibility and impulsivity, which has contributed to the perception that they are poor
managers of money. This researcher sought to establish a clearer picture of the full story
behind how college students handle their finances through a comprehensive literature review.
Several searches were conducted on the topics of college students, finances, money
management, debt levels, and other related terms. Scholarly articles were analyzed for
common themes and research patterns, and the various strings of research identified were
categorized into three main headings: Financial situation, financial influences, and financial
consequences.

The three major headings of this literature review were organized to best detail the “what”,
“why”, and “what next” questions that arise when explaining finances. Students often
struggle to make ends meet and afford their education, and many of them suffer from low
income, low financial literacy, compulsive spending tendencies, and high debt levels. These
can be attributed to items such as demographic factors, social factors, family socio-economic
backgrounds, academic influences, psychological factors, personality, and many more.
Further research reveals that students suffer from immediate stress-related health concerns as
well as a wide range of difficulties in graduation success, career opportunity, and retirement
planning because of today’s financial decisions. Understanding these relationships is key to
better preparing the next generation for financial success.[ CITATION Kat17 \l 1033 ]

The above research paper deals with factors determining the financial incapability of college
students which is the aspect of our research.

‘The Habit of Savings among College Students’ this article provides insightful ways of
saving for college students. We took this article as a supporting material because it covers the
saving aspect of our research. The habit of savings plays an important role in everyday
financial decisions. The study has revealed that there subsists a progressive correlation amid
savings and growth. Constant act of saving is very important to the financial independence
and stability Greater savings has established to be a vital element of fiscal progression. In an
era of unstable financial economies, one has to ensure and implement prudent financial
management practices to achieve personal financial independence of which savings are
fundamentally key. Savings have therefore become indispensable in the life of college
students who strive to achieve personal financial independence as the continent is largely
plagued with ever-increasing huge rates of unemployment. Financial literacy in the area of
saving is therefore paramount as the financial industry is ever-evolving with innovative
products.

An individual’s financial literacy level is his/her ability to make informed judgments and to
take effective actions regarding the current and future use and management of money.
Financial literacy includes the ability to comprehend financial sets. For example, having
current and savings accounts, having a bookkeeping system, planning for the future like
saving or investing for long term goals like education, home, vacation, etc. Financial literacy
also pleas for prudent expenditure. This means organizing resources, tracking costs, repaying
bills on time, etc. Financial literacy affects financial decision making. Ignorance about basic
financial concepts can be linked to a lack of retirement planning, lack of participation in the
stock market, and poor borrowing deeds. This means that financial illiteracy can travel a long
way through the youthful stages to the retirement stage of an individual. It is a driving force
in the life of an individual. Even though habit formation is not an easy act, once the habit of
savings is formed, it affects one’s saving ability because habit formation improves a person’s
perception and intention towards saving. Once a habit is formed, it affects an individual’s
consumption and savings. Savings is a function of one’s past savings and a combination of
current income changes and “discounted value of future income changes”. The habit of
saving is therefore very vital as optimum financial leverage does not only encourage sound
economic stable life but also pivotal in ensuring and assuring a better lifestyle in areas of
healthy living, quality health care, education and better accessibility to basic social amenities.
Savings is an integral part of life as it is needed in every facet of life and the ability to
cultivate the habit would enhance financial success in life. This study sought to examine the
habit of savings among college students and its impact on their basic financial planning skills
that are needed for a successful life.[ CITATION Dav \l 1033 ]

The major problem faced by college students and semi-autonomous students is how to create
an ideal budget as they have limited allowance for their expenses and to find out ways to add
on their budget through various sources like internships, part-time jobs, etc. Budgeting
capacity of college students vary from individual to individual because of various factors like
financial background, the area or city where they are pursuing their studies, the environment
of college, the type of stream or stream they opt for. College students should create an ideal
budget while taking in mind their expenses, so the ideal budget of individuals will vary as
different individuals have different expenditure behavior. And along with this there are some
students who are satisfied with their funds and those who are not satisfied with their fund
they try to find out different ways or sources to add on their funds.

RESEARCH DESIGN

The research design includes the population, sample size, sampling technique, Data collection

method, Statistical Tools used for data analysis and the scales used in the study. This help

define the basics of a research paper and make it easier for a researcher to go through with the

research.

The population is a large collection of people who are the main focus of the research. The

criteria to define the population can be anything from geographically defined to defined on

the basis of origin or age. We have defined our population as the college students and semi-

autonomous youth basically young adults. The young adults are the people in the age gap of

18 to 25. This is because our study is focused on the younger generation or the college

students to study their behavior regarding monthly budgeting capacity and spendings.
According to the government census data of 2001 we see that roughly 10 Crore people are in

the age gap of 18-25.

[ CITATION Gov01 \l 1033 ]

For the research we cannot take the entire 10 Crore people as it will be really expensive and

time-consuming process. Thus, we use sampling techniques to take a sample size from the

data which can be studied for the research and data can be analyzed. Sample Size is a subset

of the population and should be big enough to depict the information of the entire population.

There are various sampling techniques which can be used to determine the sample size of the

population like

 Simple Random Sampling

 Systematic Sampling
  Stratified Sampling

 Clustered sampling

 Convenience sampling

 Quota sampling

 Judgement (or Purposive) Sampling

 Snowball sampling

For our study we have used the Simple Random Sampling method. This is because each

individual has an equal chance of being chosen at random without any biasness. To calculate

the sample size we have taken the confidence level to be 95% with the confidence interval to

be 5% and when we calculate the sample size it comes out to be 384 according to the

calculator on the website https://www.surveysystem.com/sscalc.htm .

Thus, this shows that we need a sample size of approximately 384 people for our research

study. Now we need to collect data and broadly there are two methods using which we can

collect data- Qualitative and Quantitative methods. We have chosen quantitative method

because it is comparatively cheaper lesser time consuming and also, we don’t need the deep

analysis which the qualitative method provides. We also have a predetermined hypothesis

objective and only need the data to conclude our research and check for hypothesis.

We have used both the primary and secondary sources of data in this research. The secondary

sources are used to formulate the population, sample size and also to prepare the questions of

the primary research tool. The primary data collection method used is online survey form. We

have prepared an online survey using the Google Forms platform to collect data from the

people in the sample size. This survey form is a questionnaire consisting the basic questions

focused on the objectives and hypothesizes to check them and come to a conclusion.
We have used the nominal and the ratio scale in the questionnaire survey form while framing

the questions. These scales have made it easier for the people to answer the questions and

also have made it easier for us to analyze and conclude the result from the data. The nominal

scale is used to determine the preference of the people among few different options which

helped us to formulate three questions. The ratio scale gives the option as intervals and

people can choose the range which they feel is appropriate according to them which helped

us formulate the two questions related to the numerical data.

We have used various statistical tools for data analysis which are-

 Sample Size Determination

 Hypothesis Testing

 Mean

 Standard Deviation

The mean and the standard deviation have been used to determine the spread and

concentration of the data. The mean (average) is used to calculate the overall trend of the

data. It is calculated by the dividing the sum of the data by the number of observations. The

standard deviation is used to determine the spread of the data around the mean. Higher the

SD more spread is the data and lesser the SD, more it is towards the mean.

The sample size determination is used to determine the sample size in the start of the research

based on the population and the confidence level. The other statistical tool used is Hypothesis

testing. It is used to assess if a certain premise is actually true for the population. Thus, we

have formulated three hypothesis statements based on the objectives and to come to a

conclusion. We will be checking if the hypothesis is significant or not.

DATA COLLECTION INSTRUMENT

In our research study, the medium of data collection we use was a questionnaire, which was

circulated using online sources. It is one of the preferable and economical methods of

collecting primary data. In our questionnaire all the questions were clear and to the point, and

they follow a specific phase order.

The first question we asked was ‘From where do you get/arrange your monthly budget?’. As

our research focuses on satisfaction level of college students and semi-autonomous youth

pursuing studies regarding their budgeting capacity, it was the basic and most important

question to know what is the most common source or how an individual arrange funds. Then

going further, we asked ‘Monthly Budget (including accommodation) of an individual?’ the

reason behind asking this question was to know how much is the budgeting capacity of a

person and what are the differences in budgeting according to gender roles and different

cities.

Further third question was ‘Where do you spend largest portion of your budget?’. This

question was one of the most important because it was very important to know where the

college students spend major portion of their budget or to find out the areas of expenditure of

semi-autonomous students. So, in short, this question focuses on the spending behavior of

college students and is the backbone of the research. The next question of the research study

was ‘How do you arrange additional funds for extra expenditures?’. This question basically

put stress on the different sources from where semi-autonomous youth can arrange funds on

their own. It is totally a subjective thing and depends on the person whether he/she prefer

internships, part-time jobs, stock trading or some other source for additional funds. There are

lot of options available in today’s modern world from where college students can arrange

additional funds. The last question of the research study was ‘Do you save money from your
limited budget’. This question focuses on the college student’s opinion regarding savings

from their limited budget.

We find all these questions highly relevant for our research study. We kept the questionnaire

short so that it will not take much time for the respondent to fill it and it won’t be much

tedious.

Link for the Questionnaire Survey

https://docs.google.com/forms/d/e/1FAIpQLSca-
q1PWcsVqgFNbIu0JXZG0YO1ujWfKu0Dr2pHTJVEv49_wg/viewform?vc=0&c=0&w=1&flr=0