PBSA006 Accountancy Research Bernabe de Leon Diego 1

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FINANCIAL LITERACY OF OUT OF SCHOOL YOUTHS

IN SANTIAGO CITY, ISABELA
A Thesis
Presented in the Faculty of
College of Accountancy
University of La Salette Incorporated
Santiago City
In Fulfillment of the
Requirements for the Degree
Bachelor of Science in Accountancy
Bernabe, Marc Ven Q.

De Leon, Mike Julius D.
Diego, Trisha Mae T.
December 2021
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APPROVAL SHEET
This paper entitled FINANCIAL LITERACY OF OUT-OF-SCHOOL YOUTHS IN
SANTIAGO CITY, ISABELA, is prepared by MARC VEN Q. BERNABE, MIKE
JULIUS D. DE LEON, TRISHA MAE T. DIEGO, in partial fulfillment to the
requirements of the course: (PBSA006) ACCOUNTANCY RESEARCH has been
approved by the panel of evaluators.
________________________________________________________________
PANEL OF EVALUATORS
Accepted and approved in partial fulfillment of the requirements for the degree,
Bachelor of Science in Accountancy.
TERESITA D. MAGBITANG, LPT, MBA

Program Head
RUPERTO JOSE H. MATEO CPA, MAIT

Dean, College of Accountancy
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ABSTRACT
Never has been financial literacy have been important after the
occurrence of the financial crises. There is an absolute need to enhance the
financial literacy and functionality to assist the Filipino households cope and
recover from the socioeconomic effect of a crisis. The loss of formal financial
education put at a disadvantage for out-of-school youths towards economic
selections and financial actions. Financial literacy is low in out-of-school youths,
lacking in economic knowledge, access, and practices.
This study aims to determine the level of financial literacy of out-of-school
youths of Santiago City, Isabela. Savings, debt, spending, investment, and
numeracy were integrated as the measures of financial literacy. With sixty-seven
out-of-school youths, respondents were randomly selected and survey method
was facilitated. To effectively appraise the research problem, the descriptive
analytical design was utilized. Responses were analyzed using mean and
percentage. To test the hypothesis, one-way ANOVA is utilized.
The results showed that out-of-school youths are more likely an average
level of financial literacy. In terms of specific measures, numeracy of out-of-
school youths received more than an average level. The results also come up
with slight differentiation of outcomes when grouped according to demographic
variables. For the hypothesis, our analysis has shown no correlation between the
level of financial literacy and demographic variables except with household
monthly income and reasons for not attending school. It be concluded that the
level of financial literacy of the out-of-school youths is up to an average level.

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ACKNOWLEDGEMENT
It is a great platform for us to write about “Financial Literacy of Out-of-
School Youths of Santiago City”. It is the sincerest pleasure to remind the helpful
people to uphold for their valuable guidance to our research. The researchers
wish to express their utmost gratitude to the following people without them; this
work could not have been made possible.
First and foremost, to Dean Ruperto Jose H. Mateo, CPA, MAIT who gave
his best suggestions to come up with better research, for continuous guide, and
for his meaningful support for allowing a time away from his hectic schedule for
this research.
Our utmost gratitude to Ma’am Teresita Magbitang, our research
instructor, for her significant guidance, valuable suggestions, comments and for
her positive encouragement during those times of having low morale and for all
her knowledge and wisdom which greatly improved our study.
To the respondents who impart their honest and cooperative response to
all the questions solicited in this study.
To the families and friends of the researchers for their adoration and moral
support for the improvement of the research.
Most especially, to the one above all of us, the presence of God, the sole
provider of everything, for His divine power and immeasurable love that He
showered, for without Him this endeavor would not be possible Thank you so
much Dear Lord.

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DEDICATION
Looking back to what is done, to the journey we partake, and to what it is about
come, we wholeheartedly dedicate this piece of work to the whole Salettinian
Community and the College of Accountancy in particular, that allow us to shape
our knowledge and gain technical know-how, and leave a lasting experience that
serves as a significant puzzle in our success. Our warmest regard to all the
teachers/instructors who keeps inspiring in the possibilities of excellence in
education.
This study is dedicated to our loved ones that from the start, has been our
greatest cheerleader in circumstances and triumphs. Our family who in any
endeavor support and help our persistent growth and development. Our friends
who became one of our inspirations throughout the whole process. We earnestly
feel without their inspiration and guidance, we should not be able to pass through
the tiring process of this research.
TO GOD BE THE GLORY.

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TABLE OF CONTENTS
TITLE PAGE……………………………………………………………………………. i
APPROVAL SHEET…………………………………………………………………… ii
ABSTRACT…………………………………………………………………………….. iii
ACKNOWLEDGEMENT………………………………………………………………. iv
DEDICATION……………………………………………....…………………………... v
TABLE OF CONTENTS……………………………………………………………….. vi
LIST OF TABLES………………………………………………….…………………… vii
INTRODUCTION
Background of the Study………...……………………………………………. 01
Statement of the Problem………….............................…………………….. 05
Research Question…………………………………………………………….. 07
Significance of the Study…………………………..........……………………. 07
Theoretical Framework………………………...……………………………… 09
Conceptual Framework………………….…………………………………….. 10
Literature Review………………….…………………………………………… 14
METHODS
Research Design………………………………………………………………. 38
Participants and Study Site………….……………………………………….. 39
Instrument……………………..……………………………………………….. 39
Data Gathering Procedure………………………..………………………….. 40
Data Analysis………………………………………………………………….. 41
Ethical Considerations…………….....………………………………………. 43
RESULTS……………..………………………………………………………………… 45
DISCUSSIONS
Findings………………………….……………………………………………… 65
Interpretations………………………….………………………………………. 67
Implications…………...………………..………………………………………. 74
Limitations……………………….……………………………………………… 76
Recommendation for Future Research……………………………………… 77
Conclusion……………….......………………………………………………… 78
Bibliography…………………………………………………………………………….. 80
APPENDICES
A. Letter to the Respondents………………………………………………….… viii
B. Sample Questionnaire…………….………………………………………….. ix
C. Literature Matrix……………………………………………………………….. x
D. Curriculum Vitae……………………………....………………………………. xi
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LIST OF TABLES
No. Title Page

1 Legend of the Rating Scale 42
2 Demographic Profile 45
3 Level of Financial Literacy Based on Savings 46
4 Level of Financial Literacy Based on Debt 47
5 Level of Financial Literacy Based on Spending 48
6 Level of Financial Literacy Based on Investment 49
7 Level of Financial Literacy Based on Numeracy 50
8 Overall Level of Financial Literacy 50
9 Level of Financial Literacy when grouped according to Age Group 51
10 Level of Financial Literacy when grouped according to Sex 53
11 Level of Financial Literacy when grouped according to
Educational Attainment 54
Household Monthly Income 55
Reason for not attending school 57
14 Summary of Level of Financial Literacy 58
15 Difference in Level of Financial Literacy When Grouped
According to Age 59
According to Sex 60
According to Educational Attainment 61
According to Household Monthly Income 61
19 Post Hoc Tukey HSD - Household Monthly Income 62
According to Reasons for not attending school 63
21 Post Hoc Tukey HSD - Reasons for not attending school 63
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INTRODUCTION
Background of the study
In recent years, financial crisis and recession are undoubtedly contributing
to the economic downturn of the world that resulted to severe declines in
financial activity, causes financial distress and economic turmoil. The Great
Depression, which lasted for 10 devastating years, was the worst economic and
financial decline in history. Wall Street into a dread and take out millions of
investors, consumer spending and various investments dropped, peak of
unemployment, failure that led to bankruptcy of banks etc. This world laid off into
a struggling world finance and economy (History.com Editors, 2009). According
to the Corporate Finance Institute, a more recent one is the Great Recession or
the Global Financial Crisis of 2008. It all start with boom of market housing,
which was fueled by an overabundance of mortgage-backed securities that
bundled loans of high risk. The recklessness of lending resulted in an enormous
defaulted loans that several financial institutions incurred losses, necessitating a
government bailout. The 2008 financial crisis marked the rising of people’s losses
in terms of monetary value, sparked the concern of the literacy when it comes to
healthier savings, debt management, borrowing habits, investments, and
numeracy. By that, adversities has surfaced the importance of financial literacy.
A composite definition of financial literacy by President Advisory Council
on Financial Literacy (2008) and various researchers is, “Financial Literacy is the
knowledge of basic economic and financial concepts, as well as the ability to use
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that knowledge and other financial skills to manage financial resources effectively
for a lifetime of financial well-being. Being precise about what is meant by
financial literacy, including which components are being considered, will help
clarify research and ultimately lead more fluidly to practical interventions.”
Financial Literacy is more vital and becomes a necessity than ever in our world
today. With our complex financial world, people must face complex financial
practices and decisions that lead them into greater responsibilities concerning
their financial well-being. Based on a study conducted by the Asian Development
Bank (ADB), The Philippines rank 68th globally in terms of financial literacy
index. The study indicates that national strategy for improving financial literacy is
essential for the acquisition of financial protection, power, and knowledge of
individuals to formulate a thriving economy. The high number of people with low
levels of financial literacy presents a serious problem for both the economic well-
being of nations and the personal well-being of such individuals (CBF, 2004a;
Morton, 2005; RMR, 2003). As stated by the Standard & Poor’s (S&P), 25% of
the Filipinos are financially literate, with over 75 million of Filipinos is clueless
regarding inflation, insurance, or even the concept of saving accounts. The
Bangko Sentral ng Pilipinas (BSP) stated “there is a need to improve financial
literacy and capability to help Filipino families cope and recover from the
socioeconomic impact of a crisis.”
Financial literacy is the ability to read, analyze, manage and communicate
about the personal financial conditions that affect material well‐being. It includes
the ability to discern financial choices, discuss money and financial issues
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without or despite discomfort, plan and respond competently to life events that
affect every day financial decisions, including events in the general economy (Vitt
et al. 2000; Cude et al. 2006). In a recent study by McGurran (2019), he defines
financial literacy as the ability to understand how to make sound financial choices
so you can confidently manage and grow your money. It is the ability to
understand how money works, how someone makes, manages and invests it,
and expends it to help others. In-depth knowledge of financial literacy is required
to understand how money works and how it can work. It is important to
understand common financial literacy principles.
Financial literacy is low not only to the general population, even so among
particular classes such as women, marginal income earner, attaining low
education, living in rural areas, and the youths. A call to action for financial
literacy is a prevalent developmental framework for the economic well-being of
nations and personal well-being of individuals especially to the age group who
are experiencing a transition – youths. Youths themselves appear to recognize
the importance of financial self-sufficiency and cite this as one of the top three
criteria for becoming an adult (Arnett, 2000). Youths have reported that they do
not feel adequately prepared to make good financial choices when it comes to
using debt wisely (28%), saving for the future (40%), or investing their money
(43%) (Schwab Moneywise 2009). Looking to actual financial knowledge, Lusardi
and Mitchell (2008, 2011a, 2011b, 2011c) show that the capacity to do a simple
interest rate calculation and the knowledge of inflation and risk diversification are
strikingly low among the young (a finding confirmed by Lusardi, Mitchell, and
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Curto,2010). Youth experiences developmental strides pace in understanding
financial concepts and economic information from their families, peers, media,
and schools. Thus, the inculcation of the sense of financial literacy to youth is
exceptionally important because it will be utilize for their own sake, welfare and
progress.
In addition, Robert Kiyosaki said, “Everyone has the ability to build a
financial arc to survive and flourish in the future. But you must invest time in your
financial education to build an arc with a solid foundation.” The age group that
needs to instill financial education – youth. Youth is best understood as a period
of transition from the dependence of childhood to adulthood’s independence
(United Nations, 2020). Most likely that they are bombarded with financial
decisions and being responsible to manage money in life events. Family based
and In-school financial education is the best route to develop youth financial
literacy but others are deprived of developing the level of their financial literacy
because of not attending schools. The reasons of not attending schools are the
following (in chronological order): Marriage, family income not sufficient to send
to school, lack of personal interest, housekeeping, high cost of education,
illness/disability, employment, etc. (Philippine Statistics Authority, 2018). The lack
of formal financial education served as a handicapped for out-of-school youths to
discern financial choices and actions. As much as financial literacy is for
everybody, out of school youths, in particular lack in financial knowledge, access
and practices.
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The perceptibility of financial literacy as an important inculcation have
become more relevant in our daily lives especially to those who are transitioning
into from adolescence to adulthood and to those who do not have formal financial
education as the financial marketplaces are increasingly becoming more
complex. This study will give them awareness of the importance of financial
literacy. There is no denying that the culmination of financial literacy is important
for all reasons.
Financial Literacy plays a pivotal role towards out of school youths on
discovering lapses and struggles in financial management, handling money with
confidence, in bringing awareness in monetary activities, fraud and crime,
knowing and having access to financial tools and services and achieving
economic development and financial stability. The financial inclusion for youths
who are not attending the school is a necessity. This study centers on the
financial literacy of out-of-school youths in Santiago City. The purpose of the
study is to bring significant relevance to financial literacy. Savings, debt,
spending, investment, and numeracy reflects how financially literate out-of-school
youths of Santiago City is. This work will shed light on profound information upon
determining the level of financial literacy of out-of-school youths.
Research Problem
Perhaps, the importance of financial literacy has remain a necessity and
significant relevance. Past researches points out and prove that financial literacy
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is a driving force upon strongly developing individual growth and economic
welfare. In today’s society, we have been puzzled by complex financial products
and services such as different mortgage forms, payday loans, student loans,
complex retirement plans, credit cards and so on (Lusardi, 2015). Disadvantaged
and vulnerable out-of-school youths in particular, are unable to experience
developmental education and activities that lead to a stable and better adulthood.
The deprivation of out-of-school youths to attend school contributed as they lack
formal financial education, narrow financial opportunities, sound financial
experience and limited financial practices and training. Hogarth (2002) found that
financial literacy is important because well-informed, educated consumers should
make better decisions for their families; increase their economic security and
well-being; contribute to vital, thriving communities; and foster community
economic development. As out-of-school youth undergo financial difficulties and
problems, they should possess basic financial knowledge, financial skills, know
financial services, understand financial management because of where they are
now, the transition peak of adulthood in order to avoid being financially illiterate,
precarious and at-risk. Thus, financial literacy has become not just a convenience
but an essential survival tool (Jacob, Hudson, & Bush 2000).
At the macro degree, financial literacy secure its people of a nation are
sufficiently equipped to face financial transactions and situations every day. Low
degree of financial literacy create sub-optimal financial decisions , which, in the
aggregate, can yield low levels of well-being by making it difficult for people to
meet their financial needs essential for living (Sohn, 2012). As Department of
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Education stated, the number of out-of-school youth reached four million.
Financial Literacy is widely pointed to the general society. Specifically
administrating financial literacy to out-of-school youth is allowing an effective
integration and intervention of financial literacy programs, policies and training for
a significant movement for out-of-school youths to successfully obtained
economic self-sufficiency, deferred gratification and, self-management. Without
an understanding of basic financial concepts, people are not well equipped to
make decisions related to financial management. People who are financially
literate have the ability to make informed financial choices regarding saving,
investing, borrowing, and more. (Klapper, Lusardi &, Oudheusden, 2015). This
study seeks to determine the level of financial literacy of out-of-school youths in
Santiago City.
Research Questions
1. What is the level of financial literacy of the out-of-school youths in general
and in terms of savings, debt, spending, investment, and numeracy?
2. What is the level of financial literacy of out-of-school youths when they are
grouped according to their demographic profiles?
3. Is there a significant difference with the out-of-school youths’ level of
financial literacy when grouped according to their demographic profiles?

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Significance of the Study
The outcomes of this study is the determination of the level of financial
literacy of out-of-school youths in Santiago City, which can provide essential
information to prospective beneficiaries. To effectively determine the level of
financial literacy of out-of-school youths in Santiago City is the primary benefit of
conducting the study. The target beneficiaries and expected users of the study’s
outputs are as follows:
Out-of-school youths. This study will bring awareness to out-of-school
youths on their level of financial literacy. This study aims to strengthen the
importance of information, enlightenment, and understanding of how financial
literacy is a necessity emphasizing objective beneficial knowledge to financial
specific topics that helps to acquire the ability to discern financial choices,
decisions, and subjective measures of self-reported confidence.
Parents. This study will also expose parents to determine the level of
financial literacy of out-of-school youths for conducting a vital action for the
inculcation of financial literacy to out-of-school youths from the get-go as they
lack formal financial education.
Policymakers and Government. The study will inform the government
and policymakers the level of financial literacy of out-of-school youths in Santiago
City. This will help to formulate and implement an integrated expanded
framework and policies for the inclusion of financial literacy to out-of-school

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youths. Effective custom-made programs and policies will improve their financial
literacy and provide a unique framework as to what out-of-school youths need.
Future researchers. This study will help influence future researchers to
conduct detailed profound studies, which are interconnected to the financial
literacy of out-of-school youths.
Theoretical Framework
This study utilized the social learning theory by Albert Bandura alongside the
bounded rationality theory by Herbert Simon.
 Social Learning Theory
The social learning theory emphasized those social entities, people learn from
observing and modelling the behaviors, attitudes, and emotional reactions of
others. Social learning theory has been utilized by several studies on
investigating financial behavior. Bandura (1977) states: “Learning would be
exceedingly laborious, not to mention hazardous, if people had to rely solely on
the effects of their own actions to inform them what to do. Fortunately, most
human behavior is learned observationally through modeling: from observing
others one forms an idea of how new behaviors are performed, and on later
occasions this coded information serves as a guide for action.” Social Learning
theory explicate human behavior in terms of constant reciprocal interaction
between behavioral, cognitive, and environmental influences. By learning through
social interaction over the past years, out-of-school youths comprehend, develop,
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and configure their own attitudes, values, principles, and characteristics with
finances.
Figure 1. The theoretical paradigm of the study.
Conceptual Framework
The definition of Financial Literacy is the combination of awareness,
knowledge, skill, attitude and behavior necessary to make sound financial
decisions and ultimately achieve individual financial wellbeing (OECD INFE,
2011).
Financial literacy is knowledge and understanding of financial concepts
and risks, and the skills, motivation and confidence to apply such knowledge and
understanding in order to make effective decisions across a range of financial
contexts, to improve the financial well-being of individuals and society, and to
enable participation in economic life (PISA, 2012).

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Bernheim, Garrett and Maki (2001) and Bernheim and Garrett (2003) in
more recent works, show that those who were exposed financial education in
high school or in the workplace save more. In addition, financial literacy
education is expected to fulfill a wide range of expectations, such as fostering
individual and collective economic well-being as well as providing possibilities for
participation (cf. Lucey & Laney, 2012). The problem of youth dropping out from
school stemmed from social and financial reasons. By delimiting one of the great
sources of financial knowledge, possession of financial skills, attitudes and
strong engagement towards financial literacy will not result into the right financial
outcomes. Demographic variables and socioeconomic factors found to influence
the level of financial literacy of individuals.
Age frequently found to be correlated with financial literacy. The study by
van Rooij et al. (2007), the profile of basic literacy is skewed concerning age.
Advanced literacy is highest among middle-age respondents (particularly 40 to
60), and declines slightly at an advanced age of 61 or over and unfortunately, low
among the young. Similar findings are reported in the Australian context that the
following age groups are displaying the lowest financial literacy scores: the
youngest (18-24 years) and the oldest (70 years or over ANZ, 2008).
Regarding age, major research suggests that adults in the middle of their
life cycle tends to have higher financial literacy and usually, lower among elderly
individuals and young(Agarwal Driscoll, Gabaix & Laibson, 2009). Lusardi and
Mitchell (2011) showed that respondents aged between 25 and 65 tend to hit 5%
more questions than those under 25 or over 65 years.

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Differences between men and women are present not only for older
cohorts but also among younger respondents and in the population at large. The
data show that women are less likely to answer financial literacy and numeracy
questions correctly and more likely to indicate that they “do not know” the answer
to a question. Rooij, Lusardi and Alessie (2007) found that females display
much lower basic knowledge than males resulted into a large differences in
basic literacy between genders. Reported by Lusardi and Mitchell (2006) and the
findings in other literacy surveys (Lusardi & Mitchell, 2007) a large percentage of
females displaying relatively low levels of literacy when considering advanced
literacy, which show that gender differences are more evident
Moreover, there are also large differences in financial knowledge across
educational attainment: Numeracy, in particular, is especially lacking among
those with low educational attainment (Lusardi and Mitchell, 2007; Christelis,
Jappelli, and Padula, 2010). Both basic and advanced financial literacy are
consistently found to be associated with the level of education in the Dutch study
(Rooij et al., 2007). Similarly, In the ANZ Survey (2008), controlling for age,
educational attainment is also found to be associated with financial literacy score.
Greater financial literacy levels are seen in individuals with higher education
levels and greater access to financial information.
Atkinson and Messy (2012) found that low-income levels are associated
with lower financial literacy levels. Moticone (2010) has found that wealth has a
positive but little, impact on financial literacy. In turn, Hastings and Mitchell
(2011) provide an experimental evidence that shows that financial literacy relates
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to wealth. In a study on financial literacy, students from low-income families had
significantly lower knowledge levels than students from high-income families
(Johnson and Sherraden, 2007). In addition, the possibility of reverse causation:
individuals with high financial literacy levels, when making better financial
decisions, achieve higher income level than individuals with low financial literacy
levels. There is also in this case low-income individuals are more likely to drop
out of school, something that, in the end, contributes to their financial illiteracy
(Calamato, 2010).
Out of school youths

level of financial
literacy
Savings Debt Spending Investment Numeracy
Figure 2. The Conceptual Paradigm of the study

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Literature Review
This section presents several readings, which have bearing on this study.
Review of relevant literature from books, journals, articles, and published
researches conducted here and abroad on the financial literacy of out-of-school
youths.
Financial Literacy
Several studies, articles, and concepts in the field of literature have
defined financial literacy however as time progresses and it is aggregately
defined, an implication have exists that financial literacy has no exact and
specific definition. Rather, the context of the financial literacy has been faithfully
taken into account, as there are generally accepted definitions and conceptual
structures that are formulated for utilization and expounding research. According
to Ferrel and Geoffrey, The term finance refers to all activities related to obtaining
money and effective use. On the other hand, Literacy is the possession of basic
knowledge or competence and education is the means to build that capacity
(McCormick, 2009). Lusardi and Mitchell (2007) define financial literacy with
financial knowledge and ability to apply it (knowledge and abilities).
Remund (2010) tries to conceptualize the definition of personal financial
literacy into five categories which include; knowledge of financial concepts, ability
to communicate about financial concepts, aptitude in managing personal
finances, and skill in making appropriate financial decisions, and confidence in

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planning effectively for future financial needs. Knowledge of Financial Concepts
uttered how knowledge can improve one’s financial well-being (Braunstein and
Welch, 2002; Vitt et al., 2000). Ability to Communicate about Financial Concepts
come up with a definition of financial literacy as “crucial to effective consumer
decision making” (Fox, Bartholomae, and Lee, 2005, p. 195). Aptitude in
Managing Personal Finances take financial literacy as the ability to keep track of
cash resources and payment obligations, knowledge of how to open an account
for saving and how to apply for a loan, basic understanding of health and life
insurance, ability to compare competing offers, and plan for future financial
needs (Emmons, 2005, p. 336). In the skill in Making Appropriate Financial
Decisions, The National Endowment for Financial Education (2006) illustrates
this concept well in its definition of financial literacy: (Financial literacy programs)
work to improve the development, acquisition, maintenance, and conservation of
scarce resources that allow families and individuals, as they interact with the
world around them, to better their levels of living. Confidence to Plan Effectively
for Future Financial Needs said that as the language is clear and consistent such
as financial literacy , “understanding about investing and financial planning”
(Koenig, 2007, p. 44).
As it sheds light, a synthesized conceptual definition has been formulated.
Financial literacy is a measure of the degree to which one understands key
financial concepts and possesses the ability and confidence to manage personal
finances through appropriate, short‐term decision‐making and sound, long‐range
financial planning, while mindful of life events and changing economic conditions.
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As interrelated factors has been consider. As mentioned by Hilgert and Hogarth,
knowledge drives aptitude, which in turn influences how one manages money.
Knowledge is worthless without applied experience, and research has shown that
experience forms the bridge between knowledge and aptitude. Attard (2018) in
analyzed that consumer and financial literacy is more than just knowing about
money and financial matters and more than having the skills to work with this
knowledge. It also requires the confidence and capacity to successfully applying
the necessary knowledge and skills in a range of contexts and for a range of
purposes.
In research of Widyawati (2012) stated that financial literacy occurs when
an individual has a set of skills and abilities that make the person is able to utilize
the existing resources to achieve the expected goals.. Meanwhile, as cited by
Krishna (2008), financial literacy can be defined as financial knowledge with the
aim of achieving prosperity. It can be understood that preparations should be
made to meet the globalization, more specifically in the field of financial
globalization issues. Financial literacy is a basic need for everyone to avoid
financial problems. Financial difficulties not only a function of mere income (low
income), financial difficulties may also arise if an error occurs in the financial
management (miss-management) such as the misuse of credit, and lack of
financial planning. Financial constraints can cause stress, and low self-esteem
(Rashid, 2012). Moreover, Rashid (2012) said that financial literacy occurs when
an individual is capable (literate) has a set of skills and abilities that make the
person is able to utilize existing resources to achieve the goal.

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Financial literacy denotes one’s understanding and knowledge of financial
concepts and is crucial to effective consumer financial decision-making (Fox,
Bartholomae, & Lee, 2005). Being financially literate is defined as being
equipped with the information, knowledge, and skills to evaluate their options and
identify those that best suit their [financial] needs and circumstances” (FLEC,
2016). Similarly, Mitchell (2014) suggested that financial problems could be
avoided if people were more financially literate. Being financially literate can be
defined as (a) being knowledgeable, educated, and informed on the issues of
managing money and assets, banking, investments, credit, insurance, and taxes;
(b) understanding the basic concepts underlying the management of money and
assets; and (c) using that knowledge and understanding to plan and implement
financial decisions (Hogarth, 2002). Similarly, Being financially literate is defined
as being equipped with the information, knowledge, and skills to evaluate their
options and identify those that best suit their [financial] needs and circumstances”
(FLEC, 2016).
As eloquently stated by Mason and Wilson (2000), financial literacy is a
"meaning - making process" in which individuals use a combination of skills,
resources, and contextual knowledge to process information and make-decisions
with knowledge of the financials consequences of that decision. From the
definition given above, it can be concluded that financial literacy is an individual
decision making that uses a combination of several skills, resources, and
contextual knowledge to process information and make decisions based on the
financial risk of the decision.

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Financial literacy has been defined as “the ability and confidence to use
one’s own financial knowledge to make financial decisions” (Huston, 2010). As
developed by the National Financial Educators Council, financial literacy
possesses the skills and knowledge on financial matters to confidently take
effective action that best fulfills an individual’s personal, family and global
community goals.
The subject of financial literacy emerges with the aim of measuring the
level of understanding about the information required by a person to make
responsible financial decisions, although it must be taken into account that
people introduce values, wrong perceptions, and fears and shared goals to the
decision making of financial matters (Holden, 2010). In addition, Personal finance
describes the principles and methods that individuals use to acquire and manage
income and assets. Financial literacy is the ability to use knowledge and skills to
manage one’s financial resources effectively for lifetime financial security.
Financial literacy is not an absolute state; it is a continuum of abilities that is
subject to variables such as age, family, culture, and residence. Financial literacy
refers to an evolving state of competency that enables each individual to respond
effectively to ever-changing personal and economic circumstances (Jump$tart
Coalition).
Remund (2010) reflects that financial literacy is a person's ability to
understand and use financial matters. Huston (2010) considers financial literacy
including awareness, knowledge, financial instruments, and their application in
business and personal life. Financial literacy is as important a skill as reading,

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writing, and math skills are, and thus everyone should have knowledge about it in
order to survive the complex financial world. (Lusardi & Mitchell, 2014).
According to the CFPB, the ability to “manage one’s financial life and make the
financial decisions that will serve one’s life goals requires a combination of
knowledge, skills, and action” constitutes “financial literacy.”
The Government Accounting Office (GAO) defined financial literacy as the
ability to make informed judgments and to take effective actions regarding the
current and future use and management of money. It includes the ability to
understand financial choices, plan, spend wisely, and manage the challenges
associated with life events such as a job loss, saving for retirement, or paying for
a child’s education. The combination of knowledge, skills, attitudes and ultimately
behaviors that translate into sound financial decisions and appropriate use of
financial services (The Center for Financial Inclusion). The President’s Advisory
Council on Financial Literacy defines personal financial literacy as “The ability to
use knowledge and skills to manage financial resources effectively for a lifetime
of financial well-being.
OECD defined the financial literacy as "a combination of conscious
awareness, knowledge, behavioral abilities, and the habits necessary to take
proper capital and financial to meet a satisfactory condition." Financial literacy
emphasized the importance of applying knowledge and skill in financial to
decide some financial decisions.” Cited by Cude et.al (2006)., Vitt et.al (2000)
stated that Personal financial literacy is the ability to read, analyze, manage and
communicate about the personal financial conditions that affect material well‐
20
being. It includes the ability to discern financial choices, discuss money and
financial issues without (or despite) discomfort, plan for the future and respond
competently to life events that affect every day financial decisions, including
events in the general economy.
Different Key Concepts
Financial Education
Microfinance Opportunities (MFO) defines financial education in the
following way: Financial education equips people with knowledge and skills, and
strengthens their attitude and belief in themselves, to make and exercise
informed, confident and timely money management decisions. The Organization
for Economic Co-operation and Development (OECD) defined financial education
as the process why which financial consumers and investors develop their
understanding of various financial products, concepts, and risks through the
acquisition of relevant information, objective advices, and instruction. Improving
skills and having confidence to become more mindful of financial threats and
opportunities, to make informed decisions, to know where to go for help and
emergency, and to take effective actions to achieve the state of being financially
satisfied and well.

21
Financial Capability
The Financial Capability Strategy defines ‘financial capability’ as
encompassing the financial skills, knowledge, motivation and attitudes required
to make good financial decisions and to achieve good financial wellbeing.”
(Conlon, Peycheva & Landzaat, 2018a). A mixture of financial literacy and
financial behavior in order to achieve wellbeing is considered as financial
capability. Financial capability can be distinguished in three areas that influence
behavior: (1) knowledge and understanding, (2) skills, and (3) confidence and
attitudes (Kempson et al., 2005). Financial capability is grounded on knowledge,
skills, and access to manage financial resources in an effective way. Thus,
making financial capability an integral stage towards financial security, many
people (regardless of socioeconomic background) may lack one or more factors
of the financial capability equation. According to Micro Finance Opportunities
(MFO) blog, financial capability is defined as the combination of attitude,
knowledge, skills, and self-efficacy needed to make and exercise money
management decisions that best fit the circumstances of one’s life, within an
enabling environment that includes, but is not limited to, access to appropriate
financial services.
Financial Behavior
Financial behavior is one’s attitude and behavior in managing finances.
Financial behavior is defined as the effectiveness and efficiency of a household

22
or individual on managing financial resources that include savings, budget
planning, insurance and investment. Individual who has responsible financial
behavior tends to be effective in using money, such as in making money,
managing and controlling spending, investing, and paying consuming fees on
time. Financial behavior is defined as the process of how individuals understand
and act on financial knowledge so as to make sound investment decisions. It
then explains how human beings are able to apply financial ideas, concepts and
knowledge in their actions or inactions. Financial behavior therefore is the effects
of financial literacy on the behavior of consumers or people (White, 1999).
Financial Well-being
Financial well-being is utilized interchangeably with financial satisfaction
and financial wellness. As Shim et al. (2009) define financial well-being as
satisfaction with a one’s current financial status and level of debt using both
subjective and objective measures. Others define financial well-being as overall
satisfaction with one’s financial situation (Joo & Grable, 2004, 2008). A new
conceptualization for financial well-being is defined as the perception of being
able to sustain current and anticipated desired living standards and financial
freedom. Financial satisfaction can be a measure for one’s financial well-being, a
more encompassing definition that differentiate financial satisfaction from
financial well-being is the inclusion of someone’s present assessment of his/her
satisfaction as well as his/her ability to finance the desired life in the present and
future.
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Scope of Financial Literacy
Kagan, J. (2019) said that savings refers to the amount left over after an
individual's consumer spending is subtracted from the amount of disposable
income earned in a given period. Savings can be used to increase income
through investing. To be financially literate is to know how to manage your
money. This means learning how to pay your bills, how to borrow and save
money responsibly, and how and why to invest and plan for retirement. Putting
time into your financial development improves saving and investing decisions.
Being responsible with your financial life means creating a budget and building
your savings.
Chen, J. (2020) stated that debt is an amount of money borrowed by one
party from another. Debt is an obligation that requires one party, the debtor, to
pay money or other agreed-upon value to another party, the creditor. Debt is a
deferred payment, or series of payments, which differentiates it from an
immediate purchase. Financial literacy includes understanding how a checking
account works, what using a credit card really means, and how to avoid debt. A
strong foundation of financial literacy can help support using debt responsibly.
Moreover, M.M Cummins, et.al. stated that spending is the concept of
planning that refers to individual plan to spend the money. Also, the concept
which refer to whether an individual has savings or not. Lastly, the purchasing of
essential goods concept that refers to the habit of buying necessities.

24
Chen, J. (2020) said that an investment is an asset or item acquired with
the goal of generating income or appreciation. Financial literacy is the ability to
understand and use various financial skills, including investing. It will allow them
to increase the returns on wealth.
According to National Numeracy, numeracy means having the confidence
and skill to use numbers and mathematical approaches in all aspects of life.
Numeracy is as important as literacy. Numeracy is the strongest predictor
of financial literacy. In addition, math anxiety is a stronger predictor of financial
literacy. We need numeracy to solve problems and make sense of numbers,
time, patterns and shapes for activities. Literacy and numeracy are important
because they form the basis of our learning. They are required to learn other
skills, as well as for participation in everyday life.
Significance of Financial Literacy
Financial literacy is defined as the competence to comprehend knowledge
of the aspects of finance, including financial products offered by a financial
institution. Financial literacy is vital to enable individuals making the most
optimum financial decisions. There are of empirical evidences that demonstrate
the lack of financial literacy may cause incompetence on utilizing financial
products and lack of planning for retirement, and higher score in financial literacy
will increase the chances for individuals for saving and investing, getting out of
25
debt, spending less than they earn, and living in a budget. (Potrich, Vieira,
&Kirch, 2014).
Additionally, Samantha Rose (2021) indicates that there are some Expert
perspectives on why financial Literacy is Important. According to Paul Goebel
(2021) “For college students, financial literacy is important because the formula
for college success today only has two factors: grades and money. Professors
and instructors thoroughly educate students on academic requirements and
grading policies. Research has even shown that students are more likely to drop
out of school because of outside pressures than poor grades. The future success
of our students relies on providing opportunities for them to learn, develop, and
strengthen core life skills they need today and more importantly tomorrow as
successful graduates.” Phil Schuman (2021) added, “Financial literacy is
important because if you learn about it, it’s going to teach you how to be efficient
with your finances in such a way that you can accomplish more goals, and the
goals that you do have, faster.” Lastly, Dameion Lovett (2021) believes that
“Financial literacy is important because it’s pretty much one of the things that will
encompass just about every aspect of a person’s life.”
According to the study of Christiana Mbazigwe, most financial consumers
lack the ability to choose and manage a credit card efficiently, and lack of
financial literacy education is responsible for lack of money management skills
and financial planning for business and retirement. Lusardi and Mitchell (2007)
suggest that financial literacy is required to establish a measure of financial
competence, to stay knowledgeable about financial matters. The also added that
26
these literate people are more participating in financial market because they
know financial matters, they found out that financial illiteracy is widespread
among groups of the population, such as women, elderly and those with lower
education. Financial literacy enables people to understand what is needed to
achieve a lifestyle that is financially balanced, sustainable, ethical and
responsible. It also helps entrepreneurs leverage other people’s money for
business to generate sales and profits.
As mentioned by Phil Schuman, Director of MoneySmarts Program,
financial literacy is important because if you learn about it, it is going to teach you
how to be efficient with your finances in such a way that you can accomplish
more goals and the goals that you do have, faster. Financial literacy gives power
to the human beings to know how to control life in order to get benefits. It will
help our future financial planning. It also helps us to overcome our weaknesses,
faults as well as how to face difficulties in life with confidence and control on
them as soon as possible.
Understand how to budget, in order to pay for expenses, save or get rid of
debt, you must understand how much income you are taking in and distribute it
effectively. Understand and manage debt, financial literacy can help you choose
the best methods to get out of debt, either on your own or with the help of
financial products. Understand how an emergency fund works, a crucial way to
prevent debt from building is to create an emergency fund, a savings account
that you can draw from when unexpected expenses arise. A financially literate
saver knows how much to set aside. Plan for retirement, while developing an
27
emergency savings account, saving for retirement should be a concurrent long-
term goal.
For individuals and families, the benefits of financial literacy – which using
shorthand we can describe as ‘being good with money’ – are well understood.
The financially astute recognize the wisdom of sound financial planning from an
early age and, by doing so; improve their chances of achieving their financial
goals. If we accept that financial literacy has a role to play in promoting stable
household balance sheets – and small business balance sheets for that matter –
then it is not too much of a stretch to see the benefits that can flow through from
better financial education to the stability and efficiency of the financial system.
What is good for individual households is often good for the economy as a whole.
As I noted earlier, financial literacy is very much about encouraging individuals
and families to use their money wisely – both their own hard-earned income and
that borrowed from financial intermediaries. However, encouraging households to
save, for example, is not just good for them, it is also very much in the longer-
term national interest. Economic development is very much about the successful
channeling of domestic savings into productive investment opportunities (Hall,
2008).
Braunstein and Welch (2002) argue that financial literacy has a positive
impact on people’s awareness and understanding of available financial services,
which is particularly important to encourage the unbanked to become financially
included. For those who are currently included, financial literacy also matters
because it has an impact on a range of financial behaviors, which are deemed

28
crucial for asset building and wealth accumulation. (Clark et al., 2011). Not only
engaging in financial practices are important but also but also the financial
decision made when using financial services or product is also crucial.
Financial literacy is just as important in life as the other basics.” - John W.
Rogers, Jr., CEO Ariel Capital Management.
Determinants of Financial Literacy
Sanjib Das (2016) stated that financial literacy brings into light some
factors or determinants, which have significant bearing on the level of financial
literacy of people. The factors that were found significant are age, sex,
educational attainment, and level of income. Age, most of the studies reveal that
age is one of the important determinants of financial literacy.
Studies of financial literacy confirm the correlation between financial
literacy and demographic variables. Age is a significant factor in explaining
financial literacy of people. Financial capability varies significantly with age in a
nonlinear way for both men and women and it increases rapidly with age. Level
of financial literacy positively relates to age. Lusardi and Mitchell (2014) find that
financial literacy increases with age, but declines at old age, with females at all
age recorded have lower financial literacy than male. sex, a number of studies
give clear evidence that sex significantly affect the level of financial literacy. It is
clear from literature review that male is more financially literate as compared to
female. Women are less financially capable than men between the age group of
29
20-70 years. Men are more financially literate and well informed compared to
women. Chen and Volpe (1998) find that women generally have less enthusiasm
for, lower confidence in, and less willingness to learn about personal finance
topics compared to men.
Education, educational qualification and discipline of study is directly
related one’s financial literacy level. Students from business or economics and
finance honors were found more financially literate as compared to others
(Ibrahim D 2009). Financial literacy level of male is higher than that of female;
level of financial literacy increases with the increase in educational qualification
(Bhushan P2013). Chen and Volpe (1998) found out that college students had an
inadequate knowledge level, especially in relation to investments. In turn, Thaler
(2013) suggests that financial literacy is highly correlated with other factors and,
among them, Higher Education might be the key.
Income, income of an individual is significantly associated with the level of
financial literacy. Monticone (2010) and Atkinson and Messy (2012) found that
low-income levels are associated with low financial literacy levels. Economically
disadvantaged youth, in particular, lack financial knowledge and access to
mainstream financial institutions. People of rich family are more financial
knowledgeable. Level of financial literacy positively related to income and
earnings, it increases with the increase in income level (Bhushan P2013).
The socioeconomic and demographic variables with greater impact on the
individuals' financial literacy, respectively, age, gender, level of income, and
education (Potrich, Vieira, &Kirch, 2014).

30
Financial Literacy in the Philippines
The Philippines, stuck on being third world country due to the reasons
mostly on low financial decisions and literacy. According to the study made by
Berl (2016) there is 1 out of 10 main reasons that falls on the problem of financial
literacy: Extreme Poverty. From the survey by NEDA’s “AmbisyonNatin 2040”
reports 79.2 percent of the Filipinos wants to live a “simple and comfortable life”
prioritizing their basic needs, the remaining percentage wants to live either
“affluent life” or “rich life” (Cabuenas, 2016) mostly prioritizing wants over needs.
Having want but don’t need is a counter-productive (“Florida Tech”, 2016) buying
things people don’t need is due to a fact that they lack of financial literacy.
Poverty also reflects wider trends in the country where the borrowings come from
either family or friends (62%) and just 4.4% on the normal banks (BSP 2015,
BSP 2013). Consequently, only quarter of Filipinos are financial literate, amongst
the lowest in ASEAN countries (The Manila Times, 2015). The reason of poor
financial literacy (No formal education of money and Low saving Rates) is the
cause of Financial Stress (Yih, 2020). Philippines have no national strategy for
financial literacy (Reganit, 2018). In the Philippines, only the Bangko Sentral ng
Pilipinas has its public awareness campaigns and financial issues.
From the report made by Lucas (2018), on 2014 the World Bank shows a
survey that according from the statement of Bangko Sentral ng Pilipinas, said
that 3 out of 10 Filipino Adults manages to answer the survey correctly
concerning basic numeracy, computing compound interest, fundamentals of
inflation and investment diversification. Roughly, only 2 percent of adult Filipinos

31
manages to answer all the questions correctly. In addition, according from the
report of lapper (2016) found out that only 25 percent of adults are considered
financial literate. “The study also showed that Filipinos lack specific knowledge to
make informed financial decisions,” the central bank said, stressing that financial
education was an “imperative,” considering the country’s low financial literacy
levels.
There is a need of being financial literate when it comes to plans, savings,
and investments and accumulation of wealth (Lusardi and Mitchell, 2014).
However, the case in the Philippines, almost half of the Filipino adults can
answer the financial literacy question correctly (“Business World”, 2019a) that
extends to financial illiteracy. Financial illiteracy can result in poor saving, poor
spending, excessive credit card use, and bad investment decisions.
The Enhancing Financial Capability and Inclusion in the Philippines – A
demand side assessment revealed that 23 million adult Filipinos report that their
households run out of money for food and other necessary items either
“sometimes” (29 percent) or “regularly” (26 percent). Even among those earning
more than PhP 50,000 a month, 23 percent state that they run short of money for
basic necessities. Among the households that report that they run short of money
for basic necessities, the use of credit is near universal – 94 percent borrow to
cover costs. (2) Filipinos are more likely to use informal credit and saving
services than formal financial services. Only 4 percent of respondents report
having a mortgage, 5 percent have a credit card and 10 percent availed credit
product from a formal financial institution. At the same time, more than a third
32
rely on informal savings and credit. (3) Those who are knowledgeable about
financial matters (those who are “financially literate”) are more likely to report that
they have money left after paying for basic necessities and less likely to say that
they have borrowed beyond their means. Higher financial literacy scores are
strongly correlated with the level of education.
As noted by Fitz Villafuerte (2015), 80% of working, middle class Filipinos
see a bleak retirement and more than half expect to be supported by their
children in their old age. Only 10% of Filipinos are consciously saving up for
retirement. Among the middle class, 36% save regularly every month while 51%
only “save when they can.” 90% attempt to follow a budget, but only 33% stick to
it. 40% pay their credit card balances in full monthly, while 22% pay only the
minimum amount due in their credit card statements. When asked about
investing, 43% think they know exactly what to do if they had money to invest,
53% have a “good idea” where to invest, while 4% have no idea how to invest .
84% of the working, middle class have no formal financial plan. As stated by the
Bangko Sentral ng Pilipinas (BSP), it is a necessity to help Filipinos and Filipino
families upon improving financial literacy and capability in order to deal with,
recover, and make progress from different socioeconomic impact in our daily
lives and of crisis.

33
Out of School Youth
Youth is defined as all person falling from the ages between fifteen and
twenty-four years old (“United Nations Division for Social Policy and
Development”, 2000). According to the World Youth Report (2018), there are 1.2
billion young people aged 15 to 24 years, accounting for 16 percent of the global
population. One of the fundamental human rights for children is the right to
education, every child must be able to learn and go to school. United Nations
high commissioner for human rights (1989) states that there is “rights of the
child”, that has been released by the United Nations Convention on the Rights of
the Child.
The focus of the global education community has shifted to development
of child education and ensure that children are going to school to actually learn
and gain some skills needed to lead productivity and fulfilling lives (GPE
Secretariat, 2017).
Education in the Philippines is important but many of the children miss out
opportunities to learn. Based on the 2017 Annual Poverty Indicators Survey
(APIS), about 9 percent of the Filipinos aged 6 to 24 years old were out-of-school
children and youth (OSCY). The most common reasons among OSCYs for not
attending school were marriage or family matters (37.0%), lack of personal
interest (24.7%), and high cost of education or financial concern (17.9%)
(Bersales, 2018a).
34
The out-of-school youth who are living in poverty faces many challenges
usually uncommon for youth. These struggles might not allow them to reach their
goals and personal dreams, which may limit their capacity for learning and
working (Polk & Kitching, 2016). Some tends to find part time job to support their
studies but some failed and some enter full time work at a young age to support
their living. There has been a decline on educational standards in the Philippines
during the first decade of the 21st century. The problems that will result from
being out-of-school could lead to bigger issues such as crime and labor skills
problems as well.
Financial Literacy of Out-Of-School Youth
Teaching financial literacy is important because it increases the level of
understanding of youth facing financial decision-making. Unfortunately, many
youths have not received any formal or informal guidance in terms of Financial
Literacy that is why they are not ready to face financial struggles. From the
findings by the Institute for the College Access and Success (2015) shows that
the average debt of students graduated from college rose by 56%. A survey of
15-year-olds in the United States found that 18 percent of respondents did not
learn fundamental financial skills that are often applied in everyday situations,
such as building a simple budget, comparison shopping, and understanding an
invoice (Organization for Economic Co-operation and Development, 2014). And,
according to the 2008 wave of the National Longitudinal Survey of Youth, only 27
35
percent of youth knew what inflation was and could do simple interest rate
calculations (Lusardi, Mitchell, & Curto, 2010) .
There are estimated 39.2 Filipinos that are out-of-school based from the
2017 Annual Poverty Indicators Survey (APIS), one half of the Out-of-school
youth families fall at the bottom 30 percent based on their capita income
(Bersales, 2018b). From the studies made by Youth.gov, a survey of 15-year-old
students found out that 18 percent of them did not learn fundamental finances
such as simple budget planning and savings, 52 percent of school seniors did not
answer financial literacy exam correctly. These children are entering the school
grounds daily and it shows already some negative effects about financial literacy,
how much more on the out-of-school youth.
According to Macha, et. al. (2018), in 2017, from the plans of the National
Economic and Development Authority of the Philippines published the Philippine
Development Plan; 2017-2022 envisions the Philippines becoming an upper-
middle income country by 2022. Recent education reforms have sought to boost
enrolment levels, graduation rates and mean years of schooling in elementary
and secondary education, and to improve the quality of higher education.
Philippines is creating counter measures in order to eradicate the concept
of out-of-school youth to help the children learn and enrich their ideas and give
justice to the right to education that they should have. Education is hard to attain
for some children that is why the Department of Education partners with the
National Youth Commission, BPI-Globe BanKO, and Youth at Venture to

36
increase financial literacy of out-of-school youth enrolled under Abot-Alam
program that aims to register out-of-school youth to give opportunities for
education, employment and entrepreneurship. The partnership aims to
mainstream financial inclusion in the Abot-Alam Program by providing financial-
literacy sessions and seminars to groups of Abot-Alam beneficiaries organized
by the DepEd’s local Abot-Alam coordinators (Mocon-Ciriaco, 2015). The act to
develop financial literacy from youth to adulthood through the workplace and
other settings be severely limited by the lack of early exposure to financial
literacy. That is why providing early opportunities and the need for financial
competencies will establish the foundations of financial literacy.
Being out of school gives a disadvantage when it comes to competency.
According to the Admin of Pros and Cons (2018) being out of school will more
likely makes a person unemployed, more likely to face poverty, can be a bad
influence for people and younger, and it is hard to get by in life without proper
education. In the Philippines there are alarming number of out of school youth
due to the effect of COVID 19 virus, the Department of Education said that there
are a huge amount of youth that are not attending school classes nearly reaching
four million individuals (Moya, 2020).
Borrowers who were not able to finish their schooling are more likely to be
unemployed and unable to pay their loan (Jackson & Reynolds, 2013). Even
graduates with debt and poor credit will struggle with unemployment (Brougham
et al., 2011; Goetz et al., 2011; Lyons, 2004). Young adults who did were out of
school who experiences being unemployed and underemployed, their ability to

37
pay any of their debt is hindered, and they may find themselves taking more debt
to compensate for any financial struggles (Archuleta et al., 2013). Joo, Grable
and Bagwell (2003) believes that there is a positive relation between credit card
accumulation and negative financial behaviors. Debt also has a tendency to
lower one’s sense of financial well-being and security, a feeling that is not easily
recovered from (Norvilitis et al., 2006, 2003).
Out of school individuals shows their struggles when it comes to debt
management. However, there is another group of children and youth who were
faced with financial problems and entered the child labor market to support their
families (Vayachuta, et. al., 2016). In the Philippines, the increasing numbers of
out-of-school youth is very alarming but there are some, which makes their time
to compensate for the sacrifices they made on giving up on education. According
to Canlas & Pardalis (2009) from the year of 1988-2009 there is an average of
246,000 young people joined the labor force every year, the labor force have
been generally stable averaging about 57 percent. Many young individual failed
to study financial literacy and most are entering workforce without having a
proper knowledge about financial management that causes them to fall off
poverty.
38
METHODOLOGY
Research methods tells how the study was conducted. It presents
description of the design and method that was used, study site and participants,
research instruments used, the procedure of gathering data, the statistical tool
utilized in the study, and ethical considerations.
Research Design
The study utilized a research design wherein the engagement is to
determine the level of financial literacy of out-of-school youths in Santiago City.
Descriptive analytical design was utilized for the determination of the level of
financial literacy in accordance with the measurements specifically savings, debt,
spending, investment and numeracy.
The design utilized also for the study is the correlational research design
as wanting to establish if there is a significant difference between the
demographic variables and the level of financial literacy of out-of-school youths.
The collected information on the level of financial literacy of out-of-school youths
in Santiago City, Isabela gone through detailed analysis through objective
manner and numerical treatments to come up with absolute conclusions.
Study Site and Participants
The study site is where the occurrence of the research takes place. The
study site of the research is Santiago City wherein it is located in the province of
39
Isabela. The rationale behind the setting was to know the level of financial
literacy of out-of-school youths in Santiago City. As we aimed to collect
information on the said city, the researchers work towards particular respondents
namely the out-of-school youths in Santiago City. Out of all 37 barangays,
Rosario is the study site or local of the study. According to the United Nations,
those persons between the ages of 15 and 24 years old are classified as youths.
The study implemented the simple random sampling through their
geographical barangay locations as the sampling technique. According to
Community-Based Monitoring System, the population size as of 2019 of out-of-
school youths in Santiago City is Five Thousand Five Hundred twelve (5212).
With 90% confidence level, 50% response distribution and ±10 percentage level
of precision, the sample size for the respondents resulted into sixty-seven (67)
out-of-school youths.
Instrument
To examine the level of financial literacy of out-of-school youths in
Santiago City, the researchers utilized survey method in the formulation of a
questionnaire. The survey is an efficiently useful towards the study as it will be
able to obtain information that is not likely to be accessible from any source and
the data and information collected typically gives an impartial reflection of the
target population. The data and information gathered is evaluated using
descriptive and inferential statistics. The survey consists of demographic profile

40
questions and formulated a ten item guided response type questions with five
classifications namely savings, debt, spending, investment, and numeracy. The
questions are adopted through the National Financial Capability Study: Financial
Literacy Survey and the Enhancing Financial Capability and Inclusion in the
Philippines Financial Literacy Survey for the determination the level of financial
literacy of out- of school youths of Santiago City.
Data Gathering Procedure
The researchers gone through meticulous data gathering procedure for
achieving research’s objectives.
Construction of the questionnaire – The resulting acceptance of the
proposed topic, which is the financial literacy of out-of-school youths in Santiago
City. Gathering all the necessary literature review and data resources. By then,
the researchers outlines the first draft of the questionnaire. Upon making the
questionnaire, accurate and definite procedure were upheld.
Administration of the questionnaire – With the approval of Dean, the
questionnaire was prepared for administration. Letter of approval to conduct the
study at Barangay Rosario and the respondents were made. The final and
approved draft of the questionnaire was produced into on sixty-seven (67) copies
to be filled by the respondents. The data are gathered with originality and free
from any modification.

41
Scoring of Responses – After the retrieval of the questionnaire, the
gathered was tallied by selected statistical tools and were up for data analysis by
the researchers with the help of the statistician.
Data Analysis
As cited in an overview of Data Analysis at (https://ori.hhs.gov/), Data
Analysis is the method in which mathematical and/or logical techniques are
routinely used to explain, demonstrate, condense, and recapture and analyze
data. The data collected were tallied, tabulated, organized and analyzed with the
following statistical tools.
Upon the evaluation of the demographic profile of the respondents,
descriptive statistical tools such as frequency distribution and percentage are
utilized. The mean is utilized upon aiming to determine the level of financial
literacy of out-of-school youths. The standard upon the determination of the level
of financial literacy of out-of-school youths is the following:
Table 1 shows the legend of the rating scale used.
Table 1
Standard Interpretation
Mean Scale Interpretation
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General
6.68 - 10 High Financial Literacy
3.35 - 6.67 Average Financial Literacy
0.01 - 3.34 Low Financial Literacy
Determinants
1.34 - 2.00 High Financial Literacy
Determinants - per item
0.68 - 1.00 High Financial Literacy
The mean was utilized for the determination of the level of financial
literacy when grouped according to sex as it was a variable with two options
namely: male and female. Upon the determination of the level of financial literacy
when group according to age, educational attainment, and household monthly
income, the statistical analysis tool, one way ANOVA was utilized. It separates
the total variability found within a data set into two components: random and
systematic factors. The random factors do not have any statistical influence on
the given data set, while the systematic factors do.
The determination of significant differences in the level of financial literacy
of out-of-school youths when divided according to sex, age, educational
attainment, and household monthly income, the statistical technique namely T-
test is utilized for the gender as it has to two categories, on the other hand, one
way ANOVA is utilized for the rest. If significant differences are evident, post hoc
analysis will be utilized for understanding and the specifications of differences.

43
The statistical computations involved in this study had been assisted by Microsoft
Excel.
Ethical Considerations
Ethical considerations forms a major element in a research. The
researcher needs to adhere to promote the aims of the research imparting
authentic knowledge, truth and prevention of error. Furthermore, following ethics
enables scholars to deal collaborative approach towards their study with the
assistance of their peers, mentors and other contributors to the study. (Priya
Chetty, 2016). The study is grounded with ethical principles. All peers, advisers,
and contributors to the study are all properly creditor for their collaborative help
for the purpose of meeting its goals. The dignity of the subjects and the
publications of the information in the research are used for educational purposes
and in line for this specific research. All respondents were briefed regarding the
objectives of the research and are handed with written consent letter to be signed
that indicate their willingness and acceptance for filling the questionnaire. The
study involved the personal knowledge and background of the respondents, the
researchers made sure that they did not inflict any harm to the respondents
before, during, and after the occurrence of the research. Made sure to uphold the
confidentiality of the responses made by the respondents. The researchers
maintained honesty and integrity in presenting and using the gathered data.
Researchers also considered the state values and biases in writing reports to
44
establish a trusting relationship with the respondents. This research study took
steps to ensure that accurate accounts of participant perception are written and
integrated intellectual honesty given to all contributors of this study.
RESULTS
45
Results presents the analysis of data. The data presented are processed
by the researchers using statistical tool Microsoft excel to summarize the results
of the study.
Table 2
Demographic Profile
Variable Categories Frequency Percentage
15-16 8 11.94%
17-18 15 22.39%
19-20 16 23.88%
21-22 22 32.84%
Age 23-24 6 8.95%
Total 67 100.00%
Male 37 55.22%
Female 30 44.78%
Sex Total 67 100.00%
College Undergraduate 8 11.94%
Senior High School Undergraduate 19 28.36%
Junior High School Undergraduate 22 32.84%
Educational Elementary Graduate 13 19.40%
Attainment Did not go to school 5 7.46%
Total 67 100.00%
Below 5,000 28 41.79%
5,000 - 10,000 21 31.34%
10,000 - 20,000 10 14.93%
Household 20,000 - 30,000 5 7.46%
Monthly
Income above 30,000 3 4.48%
Total 67 100.00%
Financial Difficulty 33 49.25%

Labor 8 11.94%
Early Marriage / Pregnancy 7 10.45%
Reasons for Online Class Setup/ Due to
not pandemic 10 14.93%
attending
school Others 9 13.43%
Total 67 100.00%
46
The demographic profile of the respondents in terms of the following
variables: age, sex, educational attainment, household monthly income, and
reasons for not attending school was fulfilled by table 2. The chosen respondents
for this study consist of 67 out-of-school youths of Rosario Santiago, City,
Isabela.
DESCRIPTIVE RESULTS
The following tables were able to help create a visual guide for the first
two research questions that aimed to determine the level of financial literacy of
out-of-school youths in the following areas: savings, debt, spending, investment,
and numeracy.
Table 3
Level of Financial Literacy Based on Savings
Items Mean Interpretation
Savings
(1) Suppose you put 100

PHP into a savings account
with a guaranteed interest
rate of 2% per year. You do
not make any further 0.67 Average Financial Literacy
payments into this account
and you do not withdraw any
money. How much would be
in the account at the end of
the first year once the
interest payment is made?
(2)How much would be in
the account at the end of five 0.37 Average Financial Literacy
years? Would it be:
Total 1.04 Average Financial Literacy
47
Table 3 portrayed total score of 1.04 results in the interpretation that the
participants have average financial literacy. Out of the two questions, the mean
score of item 1 of 0.67 (Suppose you put 100 PHP into a savings account with a
guaranteed interest rate of 2% per year. You do not make any further payments
into this account and you do not withdraw any money. How much would be in the
account at the end of the first year once the interest payment is made?), is higher
than the item of 0.37 (How much would be in the account at the end of five
years? Would it be:) in which has an interpretation of having a correct answer to
those respective question.
Table 4
Level of Financial Literacy Based on Debt
Debt
(3) Suppose you owe Php

1,000.00 on a loan and the
interest rate, you are
charged 20 percent a year,
compounded annually. If you 0.36 Average Financial Literacy
did not pay anything off, at
this interest rate, how many
years would it take for the
amount you owe to double?
(4) Let’s assume that you
took a bank credit of 10,000
PHP to be paid back during
a year in equal monthly 0.69 High Financial Literacy
payments. The credit charge
is 6%. How much is the
annual interest on your debt?
48
Table 4 showed that the level of financial literacy based on debt, with an
overall mean of 1.05. The item with the highest mean score of 0.69 in the two
questions is “Let’s assume that you took a bank credit of 10,000PHP to be paid
back during a year in equal monthly payments. The credit charge is 6% How
much is the annual interest on your debt?” While the item that garnered the
lowest mean score out of the two with 0.36 is “Suppose you owe Php 1,000.00
on a loan and the interest rate, you are charged 20 percent a year, compounded
annually. If you did not pay anything off, at this interest rate, how many years
would it take for the amount you owe to double?”
Table 5
Level of Financial Literacy Based on Spending
Spending
(5) Let’s assume that in 2021

your income is twice as now,
and the consumer prices also
grow twofold. Do you think 0.57 Average Financial Literacy
that in 2021, you will be able
to buy more, less, or the
same amount of goods and
services as today?
(6)Let us assume that you
saw a TV-set of the same
model on sales in two
different shops. The initial
retail price of it was 1,000
PHP. One shop offered a 0.54 Average Financial Literacy
discount of 150 PHP, while
the other one offered a 10%
discount. Which one is a
better bargain, a discount of
150 PHP or 10%?
49
Table 5 indicated the level of financial literacy based on spending has an
overall mean of 1.11. Item 5 with 0.57 “Let’s assume that in 2021 your income is
twice as now, and the consumer prices also grow twofold. Do you think that in
2021, you will be able to buy more, less, or the same amount of goods and
services as today?” had a higher mean than Item 6 with 0.54, “Let us assume
that you saw a TV-set of the same model on sales in two different shops. The
initial retail price of it was 1,000 PHP. One shop offered a discount of 150 PHP,
while the other one offered a 10% discount. Which one is a better bargain, a
discount of 150 PHP or 10%?”
Table 6
Level of Financial Literacy Based on Investment
Investment
(7) Suppose you have money to
invest. Is it safer to put your 0.48 Average Financial Literacy
money into?
(8) Investments that are riskier
tend to provide higher returns 0.61 Average Financial Literacy
over time that investment with
less risk.
The above analysis fulfilled by Table 6 that is the determination of financial
literacy based on investment have indicated an overall mean of 1.09. Item 7
(Suppose you have money to invest. Is it safer to put your money into) with 0.48
has a lower mean score than item 8 (Investments that are riskier tend to provide
50
higher returns over time that investment with less risk.) with 0.61. Overall, the
level of financial literacy based on investment resulted into 1.09.
Table 7
Level of Financial Literacy Based on Numeracy
Numeracy
(9) Imagine that five brothers
are given a gift of 1,000 PHP.
If the brothers have to divide 0.87 High Financial Literacy
the money equally, how much
does each one get?
(10) Suppose you need to 0.52 Average Financial Literacy

borrow PHP 100. Which is the
lower amount to pay back?
Average 1.39 High Financial Literacy
The above analysis in Table 7 signified an overall mean of 1.39. Out of all
the determinants in financial literacy, only numeracy have a high financial literacy
in which the highest mean score is item 9 with 0.87, “Imagine that five brothers
are given a gift of 1,000 PHP. If the brothers have to divide the money equally,
how much does each one get?” while the lowest mean score of 0.52 but still have
an average financial literacy is “Suppose you need to borrow PHP 100. Which is
the lower amount to pay back?”
Table 8
Overall Level of Financial Literacy
Savings 1.04 Average Financial Literacy
Debt 1.04 Average Financial Literacy
Spending 1.10 Average Financial Literacy
Investment 1.09 Average Financial Literacy
Numeracy 1.39 High Financial Literacy
51
Table 8 showed that the level of financial literacy of out-of-school youths in
Santiago City in terms of savings, debt, spending, investment, and numeracy.
The overall level of financial literacy of participants resulted in 5.66. Level of
financial literacy in terms of spending resulted with a score of 1.10 while
investment resulted with a score of 1.10. Savings and Debt both garnered the
lowest level of financial literacy (1.04) while Numeracy have the highest level of
financial literacy (1.39). Level of financial literacy in terms of numeracy is the only
item that resulted into high financial literacy with 1.39.
Table 9
Level of Financial Literacy when grouped according to Age Group
Age Group Score Interpretation

15-16
Numeracy 1.25 Average Financial Literacy
17-18
Savings 1 Average Financial Literacy
19-20
Savings 1 Average Financial Literacy
52
Investment 1 Average Financial Literacy

21-22
23-24
Table 9 shows the level of financial literacy of out-of-school youths in
Santiago City according to their age group. Each age group have its
corresponding score based on the rating scale towards their level of financial
literacy in terms of savings, debt, spending, investment, and numeracy. The age
group who has the highest overall score is the age group ranging 21-22 with 6.36
followed by the age group ranging 23-24 with 6.01 overall score. The two age
groups are similar when it comes the category of numeracy. The remaining age
groups such as 15-16, 17-18, and 19-20 garnered an average level of financial
literacy that garnered 4.88, 5.34, and 5.38 overall score respectively. The 15-16
age group received the lowest score in terms of savings and investment that
resulted into both 0.75. The 23-24 age group have the highest score in terms of
numeracy with 1.67 score.

53
Table 10
Level of Financial Literacy when grouped according to Sex
Sex Score Interpretation

Male
Female
Table 10 showed the level of financial literacy of out-of-school youths
according to their sex group namely male and female, generated 5.60 and 5.77
respectively. The overall score of male respondents resulted into 5.60 and for
female respondents resulted into 5.77. Both of the sex group highest score is on
the items of numeracy indicating a high level of financial literacy and the
remaining variables, all got an average level of financial literacy. The results
lowest score are received by male in the savings category and female in the debt
category by receiving a 0.97 score. Female sex group, which is 5.77, has bigger
score compared to male sex group having a score of 5.60.

54
Table 11
Level of Financial Literacy when grouped according to Educational Attainment
Educational Attainment Score Interpretation
College Undergraduate
Investment 1.38 High Financial Literacy
Senior High School Graduate
Junior High School Graduate
Elementary Graduate
Did not go to school
Spending 0.60 Low Financial Literacy
55

Table 11 shows the average generated by the out-of-school youths when
grouped according to their educational attainment. The highest score between
the different educational attainments are the college undergraduate having high
scores upon financial literacy with 1.38 with investment.
With that being said, respondents who did not go to school garnered the
lowest scores in the table with 0.60 in their level of financial literacy in terms of
spending. The highest score when grouped according to educational attainment
goes to the college undergraduate having 6.52 while the lowest number is junior
high school graduate, which is 5.31. The Elementary Graduate have a score of
5.77 followed by Senior High School Graduate with 5.69 and for those out-of-
school youths who did not go to school have a 5.40 score higher than those
junior high school graduate who garnered the lowest.
Table 12
Level of Financial Literacy when grouped according to Household Monthly
Income
Household Monthly Income Score Interpretation
Below 5,000
5,000 - 10,000
56

10,000 - 20,000
Debt 1.50 High Financial Literacy
20,000 - 30,000
Savings 1.60 High Financial Literacy
Spending 1.60 High Financial Literacy
Investment 1.80 High Financial Literacy
Total 8.60 High Financial Literacy
Above 30,000
Table 12 showed the results generated by the household monthly income
of out-of-school youths in Santiago City. For the group below 5,000 income the
total score is 5.22, the 5,000 – 10,000 income group resulted into 5.01 total
score, for the 10,000-20,000 income group showed a 6.40 total score, the
20,000-30,000 income group garnered a total score of 8.60, and for above
30,000 income group is 7.33 all of which interprets to having different levels of
financial literacy. The 20,000 – 30,000 income group have an up to par financially
literate because of the score given in table 12. The lowest score is garnered by
57
5,000-10,000 in terms of savings. Both 20,000 – 30,000 and above 30,000
income group perfected the question in the category of numeracy.
Table 13
Level of Financial Literacy when grouped according to reason for not attending
school
Reason Score Interpretation
Financial Difficulty
Labor
Spending 0.50 Low Financial Literacy
Early Marriage/ Pregnancy
Savings 0.14 Low Financial Literacy
Pandemic/ Online Class
Others
Spending 1.55 High Financial Literacy
58

Table 13 shows the level of financial literacy when grouped according to
reasons of having not to go to school. Out of school youths whose reason for not
attending school is financial difficulty received 5.63 score, for those whose
reason is labor received a score of 4.51. The others reasons for not attending
school are the following: peer pressure, no motivation, and etc. garnered a score
of 6.54. The out-of-school youths whose reason is early marriage/pregnancy
garnered the lowest score out of all reasons with 3.70. Out-of-school youths
whose reason is pandemic/online class resulted into the highest score with 7.30.
Table 14
Summary of Level of Financial Literacy
Variable Total Interpretation
15-16 4.88 Average Financial Literacy
Male 5.60 Average Financial Literacy
Female 5.77 Average Financial Literacy
College undergraduate 6.52 Average Financial Literacy
Senior High School Graduate 5.69 Average Financial Literacy
Junior High School Graduate 5.31 Average Financial Literacy
Elementary Graduate 5.77 Average Financial Literacy
Did no go to school 5.40 Average Financial Literacy
Below 5,000 5.22 Average Financial Literacy
5,000 - 10,000 5.01 Average Financial Literacy
10,000 - 20,000 6.40 Average Financial Literacy
20,000 - 30,000 8.60 High Financial Literacy
Above 30,000 7.33 High Financial Literacy
Financial Difficulty 5.63 Average Financial Literacy
Labor 4.51 Average Financial Literacy
59
Early Marriage/ Pregnancy 3.70 Average Financial Literacy

Pandemic/Online Class 7.30 High Financial Literacy
Others 6.54 Average Financial Literacy
Table 14 shows the level of financial literacy of out-of-school youths when
grouped according to their demographic variables. As show in the table, the
overall level of financial literacy of out-of-school youths resulted into 5.83. Out-of-
school youths who belonged to 20,000-30,000 have the highest score of 7.30.
Out-of-school youths whose reason for not attending school is early
marriage/pregnancy have the lowest of financial literacy with 3.70
INFERENTIAL RESULTS
The following will be used in the following tables to analyze the data on each
illustration.
a. Reject the null hypothesis if the p-value is less than or equal to 0.10 level
of significance.
b. Accept the null hypothesis if the p-value is greater than 0.10 level of
significance.
Table 15
Difference in the Level of Financial Literacy When Grouped according to Age
Categor p-
Variable y Mean f-value value Alpha Interpretation
15-16 4.8750
17-18 5.2670
Age 19-20 5.3750 1.188 0.325 0.10 Not significant
21-22 6.3636
60
23-24 6.0000
Table 15 shows whether there is a significant difference in the financial
literacy of the out-of-school youths when grouped according to age. As there are
more than two categories in this variable, the One-Way ANOVA is utilized.
In line with this, the calculated p-value of the level of financial literacy of the out-
of-school youths when grouped according to age is 0.325 therefore; the results
interpret as having no significant difference in financial literacy when grouped
according to age. With that, the null hypothesis is accepted.
Table 16
Difference in the Level of Financial Literacy When Grouped according to Sex
p- Interpretatio
Variable Category Mean t-value value Alpha n
Male 5.6226
Sex 1.2949 0.4131 0.10 Not significant
Female 5.7333
Table 16 uses independent sample t-test of unequal variances to
determine if there is a significant difference in the level of financial literacy when
grouped according to sex. T-test is utilized as the statistical tool because there
are two variables namely male and female sex group. The computed p-value
resulted with 0.4131. The results indicated that there is no significant difference
in the level of financial literacy when grouped according to sex. Thus, the null
hypothesis is accepted.
61
Table 17
Difference in the Level of Financial Literacy When Grouped according to
Educational Attainment
f- p- Alph Interpretatio
Variable Category Mean value value a n
College
Undergraduat 6.500
e 0
Senior High
School 5.736
Educationa Graduate 8
l Junior High
Attainment School 5.318 0.498 Not
Graduate 1 5 0.7369 0.10 significant
Elementary 5.769
Graduate 2
Did not go to 5.400
school 0
Table 17 indicated the One-Way ANOVA is utilized upon the
determination of significant difference in the level of financial literacy when
grouped according to educational attainment. The results show that the p-value
computed is 0.7639 of the level of financial literacy when grouped according to
educational attainment that indicated that the null hypothesis is accepted.
Table 18
Difference in the Level of Financial Literacy When Grouped according to Household
Monthly Income
f- p- Alph Interpretatio
Variable Category Mean value value a n
Househol 5.214
d Monthly Below 5,000 3
Income 5,000 -10,000 5.000
0
62
10,000 - 6.400
20,000 0 5.2745 0.0010 0.10 Significant
20,000 - 8.600
30,000 0
7.333
Above 30,000 3
The results shown in Table 18 indicates whether there is a significant
difference in the level of financial literacy when grouped according to Household
Monthly Income. The One-Way ANOVA is used since this variable has more than
two categories.
According to this, the computed p-value of the degree of financial literacy
when grouped by Household Monthly Income is 0.001, as shown in the table.
When respondents were categorized according to household monthly income,
the data indicated that there was a significant difference in their degree of
financial literacy. As a result, the null hypothesis has been rejected.
Table 19
Post Hoc Tukey HSD
Pairwise Comparisons Significance Result
Below 5,000 : 20,000 - 30,000 Q = 4.78 ( p = .01057)
5,000 - 10,000 : 20,000 - 30,000 Q = 5.08 ( p = .00557)
Upon the result of having significant difference to the level of financial
literacy of out-of-school youths when grouped according to household monthly
income, the Post Hoc Tukey HSD was utilized for the particularity in the
significance. As shown in Table 19, the significance difference lies between the
63
below 5,000 and 20,000-30,000 income groups with q-value of 4.78 and p-value
of .01057. Moreover, there is also a significance result with the income groups of
5,000-10,000 and 20,000-30,000.
Table 20
Difference in the Level of Financial Literacy When Grouped according to
reasons for not attending school
Variabl f- p- Alph Interpretatio
e Category Mean value value a n
Financial 5.214 5.636
Difficulty 3 4
5.000 4.625
Labor 0 0
Early Marriage/ 6.400 3.571
Reason
Pregnancy 0 4 0.0008 0.10 Significant
Pandemic/ 8.600
Online Class 0 7.3
7.333 6.555
Others 3 6
The result shown in table indicates whether there is a significant difference
in the level of financial literacy; the participants classified according to their
reasons of not attending school. With more than two categories in this variable,
the one-way ANOVA was utilized.
As indicated in the table, the estimated p-value for the degree of financial
literacy when classified by Reason for not attending school is 0.0008. The results
revealed that there was a significant difference in the respondents' financial
literacy when they were grouped by reasons for not attending school. As a result,
the null hypothesis is rejected.

64
Table 21
Post Hoc Tukey HSD
Pairwise Comparisons Significance Result
Labor : Pandemic/Online Class Q = 4.56 ( p = .71047)
Early Marriage/ Pregnancy :
Pandemic /Online Class Q = 6.35 ( p = .00029)
Pandemic/Online Class : Others Q - 5.09 ( p = .00559)
The Post Hoc Tukey HSD was utilized to for locating the significant
difference to the level of financial literacy of out-of-school youths when grouped
according to the reasons for not attending school. As stated in table 21, the
significant difference lies in labor and pandemic/Online class with q-value of 4.56
and p-value of .71047. In addition, Early Marriage/ Pregnancy and Pandemic
/Online Class resulted into a significant result of having q-value of 6.35 and p-
value of .00029. Lastly, the significant difference is also located with
pandemic/online class and others with q-value of 5.09 and p value of .00559. The
substantial disparities are seen with these pairwise comparisons.

65
DISCUSSIONS
The discussions of the findings would be supported by researches that have
been published and validated as reliable. Discussions presents the summary of
findings, interpretations, implications, limitations, and recommendations related
to the present study: Financial Literacy of Out-of-school Youths of Santiago City.
Findings
After a careful and thorough evaluation of the results of the research conducted,
the research questions of the study were able to be answered. The literature
review were utilized in hope for understanding the level of financial literacy of out-
of-school youths of Santiago City. It also expounds unequivocally the different
measurement basis of financial literacy such as savings, debt, spending,
investment, and numeracy. The questionnaire answered by randomly selected
out-of-school youths from Rosario, Santiago City. The following are the findings
of the study based on the data gathered from the survey and its corresponding
66
interpretation. Based on the survey results when taken as a whole, the level of
financial literacy of out-of-school youths is average. However, the level of
financial literacy of out-of-school youths in terms of the measures of financial
literacy, numeracy resulted into a high level of financial literacy while savings,
debt, spending, and investment resulted into an average level of financial
literacy.
With further analysis, the level of financial literacy when grouped according age,
sex, and educational attainment lead to an average level of financial literacy. In
addition, the level of financial literacy when grouped according to household
monthly income and reasons for not attending school varies. For those who
belong to 20,000 – 30,000 and above 30,000 income group received a high level
of financial literacy. For those who have not attended school because of the
pandemic/online class also received a high level of financial literacy. The
remaining categories of the household monthly income and reasons garnered an
average level of financial literacy.
The results rejected two of the null hypotheses and accepted three. There is no
significant difference in the level of financial literacy when grouped according to
age, sex, and educational attainment. On the other hand, the study demonstrates
the significant difference in the level of financial literacy of out-of-school youths
when grouped according to household monthly income and reasons for not
attending school.
67
Interpretations
Through the use of questionnaires which was adopted by the researchers, the
research came up with analysis and interpretation towards the level of financial
literacy of out-of-school youths in Santiago City. The following are the research
questions answered:
I. Level of financial literacy of out-of-school youths in general and in terms of
Savings, Debt, Spending, Investment, and Numeracy
In the website “The power of compounding grows your savings faster.” In other
words, is is saying that by harnessing the act to save, the more you’ll earn in
interest. The category of savings discussed the about the application of simple
interest and interest compounding in the context of savings. The out-of-school
youths knows how to utilized simple interest on savings account while they have
a hard time applying compound interest compared to simple interest. Moreover,
the results imply that the out-of-school youths’ level of financial literacy in terms
of savings is average financial literacy.
Debt literacy is an important domain-specific aspect of financial literacy. It is
defined as the ability to make simple, everyday decisions regarding debt
contracts (Lusardi and Tufano, 2015). The out-of-school youths resulted into a
high financial literacy on item 4 compared to item 3 that got an average financial
literacy. Their application and analysis are stronger when they are considering
68
only the amount and rate of the debt while the consideration of time have been
neglected. The data suggested that the level of financial literacy of out-of-school
youths is average.
As cited by Bhadrappa Haralayya (2021), “low financial knowledge and low
awareness of financial literacy leads to higher spending behavior.” The difference
between the two is 0.03 that garnered them result that expressed an average
financial literacy when it comes to subject of spending. The out-of-school youths
have middling level of financial literacy when tackling inflation and purchase
discount in the context of spending. The difference between the two is 0.03 that
garnered them result that expressed an average financial literacy when it comes
to subject of spending.
As stated in corporatefinanceinstitute.com, “to become financially literate, an
individual must learn about key components in regards to investing.” The
interpretation with the financial literacy of out-of-school youths in terms of
investment is in fact an average level of financial literacy. This signifies that they
are somewhat knowledgeable towards investment and its risk. In a fair manner,
out-of-school youths have an understanding towards investment literacy.
According to Lusardi (2012), numeracy and financial literacy are lifetime skills
that everybody needs to have to be able to live and operate in today’s complex
environment. This means that out-of-school youths have the knowledge and
dispositions when it comes utilizing mathematics in different circumstances. The
overall result indicates an high level of financial literacy.

69
Hilgert, Hogarth, and Beverly (2003) found a strong link between financial literacy
and day-to-day financial management. A regular link for out-of-school youths with
their day-to-day financial management and financial literacy because the overall
level of financial literacy of out-of-school youths indicated that they an average
level of financial literacy.
II. Level of financial literacy of out-of-school youths when grouped according
to their demographic profiles
On average, 56 percent of young adults are financial literate compare with 63
percent of those who are older (Klapper, Lusardi, and Oudheusden, 2014). All of
the age groups resulted into an average level of financial literacy with few
discrepancies. The higher the age of the out-of-school youths the higher the level
of financial literacy except with the age group of 21-22 and 23-24. They also
garnered a high financial literacy interpretation.
Cited from the study “An Analysis of the factors affecting the spending and
saving habits of college students,” stated that females employ more saving
mechanisms. In this case, the female group have got a much higher score
compare to the male group in terms of savings that the study is deemed true. In
the book called Women and Financial Education by OECD, it uttered that
women, in terms of financial knowledge and skills, are less confident when
70
compared to men, less over-confident in financial matters, and more averse to
financial risk compared to men. It is deemed invalid for the results as female
group seem to have higher score than the male group. Nevertheless, both sexes
got an average level of financial literacy.
According to Klapper, Lusardi, and Oudheusden, “financial literacy sharply
increases with educational attainment.” the results have negated the study of
Klapper, Lusardi, and Oudheusden by having the junior high school graduate
receiving a much lower score than the out-of-school youths who did not go to
school. There are large differences in financial knowledge across educational
attainment: numeracy, in particular, is especially lacking among those with low
educational attainment (Lusardi and Mitchell 2007a,b; Christelis, Jappelli, and
Padula 2010). The results are paralleled to the study as college undergraduate
and Senior high school graduate both have higher numeracy than those of the
remaining. In general, all groups according to educational attainment have shown
in the table that corresponds to the interpretation of having an average level of
financial literacy.
Monticone (2010) found that people with higher incomes were more likely to
acquire financial literacy on their own while those with lower incomes found it too
costly or did not have the same incentives to do so. The study corresponds to the
results as those with higher household monthly income have a much higher
score of financial literacy. However, the 20,000-30,000 income group have the
highest score with having a high level of financial literacy with savings, debt,
spending, investment, and numeracy than any income group given even the
71
above 30,000 income group. The 20,000-30,000 and above 30,000 income
group got perfect score on the subject of numeracy with 2.0. People with lower
income saw that a lack of financial knowledge to be a barrier to financial
behaviors specifically saving (Mauldin, et al., 2016). The results in terms of
savings have been having average level of financial literacy with 0.67 as the
lowest and 1.67 as the highest. Other studies have found that people with lower
incomes are less likely to be financially literate (Lyons, Chang, & Scherpf, 2006;
Mauldin, Henager, Bowen, & Cheang, 2016; Monticone, 2010; Zhan, Anderson,
& Scott, 2006). The lower income group received lower scores compared to
higher the higher income group. However, the lowest score among the income
group is 10,000-20,000 with a discrepancy of .21 with the below 5,000 income
group.
Moreover, Out-of-school youths whose reason is financial difficulty have a high
level of financial literacy in terms of numeracy however, in general have an
average level of financial literacy. For those who have reason of labor also have
a low financial literacy in spending, out-of-school youths who experienced early
marriage/pregnancy received a low financial literacy in terms of savings. While
pandemic/online class and others resulted into mixture of high and average level
of financial literacy.
The summary of the level of financial literacy when grouped according to their
demographic variables tells that when group according to age, sex, and
educational attainment received an average level of financial literacy. In addition,
household monthly income and reasons for not attending school both resulted
72
into high level of financial literacy in the part of 20,000-30,000 income group,
above 30,000 income group, and pandemic online class. Due to wealth
accumulation and higher income rate, they are more expose towards financial
matters thus giving them advantages towards dispositions in financial literacy. It
could be concluded that the overall impression given by the table is that financial
literacy is average.
III. Significant difference with the out-of-school youths’ level of financial
literacy when grouped according to their demographic profiles
The following are the interpretation of the inferential results:
(1) The null hypothesis that say there is no significant difference in the financial
literacy of out-of-school youths when grouped according to age is accepted. In
other words, the age group of the out-of-school youths does not affect the level of
financial literacy. the findings show that being in young or being a little older does
not guarantee a greater degree of financial literacy.
(2) The null hypothesis that says there is no significant difference in the financial
literacy of out-of-school youths when grouped according to sex is accepted. it
does not matter whether one is a male or a female it only shows that both male
and female have the understanding when it comes to financial literacy matters.
From the study by Brachinger, Gysler, and Schubert (1999) states that the
hypothesis that male and female risk attitudes do not differ under controlled
73
economic conditions adds a new dimension to the observed sex differences in
financial literacy. The inference is that there are unlikely to be any disparities in
financial literacy between men and women.
(3) The null hypothesis that says there is no significant difference in the financial
literacy of out-of-school youths when grouped according to educational
attainment is accepted. This signifies that educational attainment would not affect
the level of financial literacy of a person. One reason presented by the National
Financial Educators Council that graduate of higher education does not imply full
knowledge about Financial Literacy is because schools fail by not teaching
personal finance; A failure of the educational system to recognize the most
important abilities that pupils should have. While some refer to underfunding as a
reason why personal finance isn't taught in schools, others argue that it is due to
a lack of resources.
(4) The null hypothesis that says there is a significant difference in the financial
literacy of out-of-school youths when grouped according to Household Monthly
Income is rejected. The data gathered and analyzed supported studies stating
the difference in financial literacy when belonging to different income groups. The
researchers discovered that out-of-school youths who have 20,000-30,000 and
above 30,000 incomes had higher overall financial literacy compared to the
remaining categories.
74
(5) The null hypothesis that says there is a significant difference in the
financial literacy of out-of-school youths when grouped according to reasons for
not attending school is rejected. The result means that reasons for not attending
school is a factor affecting the level of financial literacy of out-of-school youths.
As shown from the result, it concludes that reason for not attending school affect
the financial literacy of a person. Online class set-up has the highest level of
financial literacy knowing the fact that they only consider not attending school
because of hardship on adapting online classes due to the pandemic. Supported
by the report of Tadalan (2021), according to the youth organization Samahan ng
Progresibong Kabataan, the pandemic deteriorated the quality of the Philippine
school system, which was already in poor shape before the global health crisis
struck. The pandemic would have provided an opportunity for the government to
employ technology to reset the country's education system, but it instead
exposed significant issues, such as poor internet access.
Implications
A survey was conducted to measure the financial literacy of Out-Of-School
youth in Santiago City. There were 5 financial measures to assessed in
measuring their financial literacy namely savings, debt, spending, investment,
and numeracy. This research has contributed a wide range of financial measures
to other researches that tackles about different major points of financial literacy.
The research has a specific individual that are often overlooked towards
conducting the determination of financial literacy and those individuals are out-of-
75
school youths. It gives a specific point of view and a profound perspective on
youths. When it comes to the profiles of the respondents, given the results and
findings of the study, two have shown significant difference on the level of
financial literacy and that are household monthly income and reasons for not
attending school. Household monthly income can be supported by the evidence
shown by Pratap (2017) that income is one of the factors affecting the person
financial behaviour. Additionally, low-income earners have a negative impact of
over indebtedness, as supported by French and McKillop (2016) indicate that a
lack of money management skills is linked to a high debt load.
The other three variables which are, the Age, Educational Attainment, and
Gender shows that there is no significant difference on Financial Literacy.
Educational Attainment cannot affect the financial literacy because this can be in
connection with the study made by the National Financial Educators Council
claiming that financial literacy is not affected because schools are failing to
include in their educational system the most important abilities that the children
should have on dealing with personal finance, another reason is that of
underfunding. Thus, this shows that the financial literacy is not affected by the
educational attainment because schools fail to teach personal finance among
youth. This study can contribute to further researches among out-of-school youth
on how they face the finances considering that they are not attending school; this
would possibly give an idea and insights to further researchers on how to answer
the on-going problem on lack of education funding towards financial literacy.

76
The findings of the study clearly state that as a whole, the out-of-school
youths have an average level of financial literacy. Thus, it negates the national
longitudinal survey of youth who have states that financial literacy is low among
the youth. In general terms, conducted national surveys shows that young adults
have amongst the lowest levels of financial literacy. Due to lack of formal
financial education, out-of-school youths are perceived being financial precarious
and poor financial literacy but aside from educational attainment as variables for
financial literacy, many important predictors of financial literacy can be accounted
such as the reasons for not attending school. In some way, this research
implicates the importance of further comprehensive researches with out-of-
school youths’ financial literacy.
The implication of the study towards the out-of-school youths is through
awareness towards their level of financial literacy in terms of savings, debt,
spending, investment, and numeracy. The importance of enlightenment towards
the scope of their financial literacy are implications to their financial daily
measures. Other than the out-of-school youths, parents or guardians can
objectively determine their sons/daughters that have no full blown or partial
formal financial education the level of financial literacy. This will give parents or
guardians further assess the level of financial literacy that affects present and
future financial decisions and actions. In addition, policymakers and the
government will be informed as matters of the level of financial literacy of out-of-
school youths to come up with necessary measures and implement policy and
framework to maintain or further improve the out-of-school youths’ financial

77
literacy. Lastly, this research is important to future researches to support details,
possible contrasts, and influencing studies to clearly widen the scope at the
same time improve the knowledge with regard to the level of financial literacy of
out-of-school youths.
Limitations
The focal point of the research is to determine the level of financial literacy of out-
of-school youths of Santiago City. The generalizability of the results is limited by
the out-of-school youths who are the respondents of this study. The sample size
is composed of 67 out-of-school youths of Rosario Santiago City. The premise of
out-of-school youths are individuals who belongs to the 15-24 age bracket and
have not go to school for the academic year 2020-2021. The reliability of the data
is impacted by environmental changes and participation changes. Environmental
changes tackles about the influence of environmental conditions and surrounding
the respondents when data is being collected. On the other hand, participation
changes is that researchers have short and limited amount of interaction thus
creating barriers towards focus and attention in answering the questionnaire. The
methodological choices were constrained by the pandemic. Generally, out-of-
school youths answers the questionnaire in a paper form while others are limited
with social media platforms because of the pandemic. It is beyond the scope of
the study when it is other than determining the level of financial literacy of out-of-
school youths in Santiago City.

78
Recommendations
The researchers cited recommendations for the improvement and practical
implementation of further research.
a. It is recommended that other variables such as parent’s occupation,
individual’s employment, and home ownership be given focused in future
research. Further research should take into account towards
strengthening the objectivity, scope and reliability the reasons for not
attending school.
b. The study can be expanded in terms of population by adding more of the
respondents to build a more essential findings and reducing risks of bias.
c. Give a tantamount amount of time and attention towards guiding the out-
of-school youths upon answering the questions in person or in social
media to protect the validity of the data.
d. The measures of financial literacy can be expanded for wide scope of
financial literacy or can be shorten for specific point of financial literacy.
Conclusion
As data gathered were analyzed and interpreted, the objectives of the study were
able to be determined. It further elaborates explicitly on the categories of savings,

79
debt, spending, investment and numeracy as basis of financial literacy that out-
of-school youths’ level of financial literacy is average. On the other hand, when
grouped according to age, sex, and educational attainment, household monthly
income, and reasons for not attending school, the level of financial literacy of out-
of-school youths is average except on the categories of household monthly
income mainly 20,000-30,000 and above 30,000 brackets as they resulted into
high level of financial literacy. Other than that, the pandemic/online as the
reasons for not attending school also garnered a high level of financial literacy.
The results rejected two of the null hypotheses namely household monthly
income and reasons for not attending school. The results for the sex, age, and
educational attainment have arrived on the acceptance of the three of the null
hypotheses.
80
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92
viii
APPENDICES
A. Letter to the Respondents
(Month) (Day), 2021
Dear Respondents;
Greetings!
We, the undersigned are Bachelor of Science in Accountancy students of the

University of La Salette, Incorporated presently conducting a study entitled
“FINANCIAL LITERACY OF OUT-OF-SCHOOL YOUTHS IN SANTIAGO CITY”
as part of the requirements of the program.
In line with this, we would like to ask your help to provide the necessary data for
my study upon answering the questionnaire.
We heartily express our gratitude upon fulfilling our request for data. Your
answers will greatly influence the objective of our study and will prove valuable to
the study we are conducting.
We assure you that all necessary measures and privacy regulations will be
adhered. If you have any concerns, our contact information is Trisha Mae Diego -
09633901212.
Best Regards,
Marc Ven Q. Bernabe
Mike Julius D. De Leon
Trisha Mae T. Diego

ix
B. Sample Questionnaire
Survey Questionnaire
On
Financial Literacy of out of school youths
In Santiago City
I. Demographic Profile
Please fill out the following demographic information honestly and
without any reservation. All information provided is strictly confidential.
Thank you for your cooperation. Now on the survey!
(Maaaring punan ang mga kahon na naayon sa inyong impormasyong pansarili
ng may katapatan at walang pag aalin-langan. Ang lahat ng impormasyon ay
mahigpit na maproprotekathan. Maraming salamat sa inyong kooperasyon.)
Age (Edad): _____
Sex (Kasarian): Male Female
Educational Attainment: Level of Household Monthly

Income:
(Natapos na antas ng Edukasyon) (Buwanang kita/sahod)
College undergraduate Below 5,000
Senior High School Graduate 5,000 – 10,000
Junior High School Graduate 10,000 – 20,000
Elementary Graduate 20,000 – 30,000
Did not go to school Above 30,000
Reason for not attending school (Dahilan sa hindi pagpasok sa paaralan):

_____________________________________
II. The Level of financial literacy in general and in terms of Savings,
Debt, Spending, Investment, and Numeracy.
DIRECTIONS: Answer each of the following multiple-choice questions and
write it on the blank provided at the right side of the test paper.
(Sagutan ang bawat tanong sa pamamagitan ng pagpili ng letra at ilagay ang
letra ng napiling sagot sa patlang na makikita sa kanang bahagi ng bawat
tanong.)
Savings
__________ 1. Suppose you put 100 PHP into a savings account with a
guaranteed interest rate of 2% per year. You do not make any further payments
into this account and you do not withdraw any money. How much would be in the
account at the end of the first year once the interest payment is made?
(Ipagpalagay natin na naglagay ka ng Php 100 sa iyong savings account na may
2% interest kada taon. Hindi ka nag deposito o naglabas ng kahit anong pera.
Magkano sa tingin mo ang laman ng iyong savings account pag lipas ng isang(1)
taon?)
a. 100 PHP
b. 102 PHP
c. 104 PHP
d. It is impossible to tell from the information given (Imposibleng malaman sa
mga impormasyon na ibinigay)
__________ 2. How much would be in the account at the end of five years?
Would it be: (Katuloy ng unang tanong, Magkano naman ang laman nito pag
lipas ng limang (5) taon?)
a. More than 110 PHP (Mahigit 110 PHP)
b. Exactly 110 PHP (Saktong 110 PHP)
c. Less than 110 PHP (Mas mababa sa 110 PHP)
d. It is impossible to tell from the information given (Imposibleng malaman sa
mga impormasyon na ibinigay)
Debt
__________ 3. Suppose you owe Php 1,000.00 on a loan and the interest rate,
you are charged 20 percent a year, compounded annually. If you did not pay
anything off, at this interest rate, how many years would it take for the amount
you owe to double?(Ipagpalagay natin na humiram ka ng Php 1,000 sa bangko
na may karagdagang babayaran na 20% interest kada taon. Kung wala kang
binayaran pag lipas ng
isang taon, ilang taon ang aabutin upang madoble ang halaga ng iyong bayarin
sa bangko?)
a. Less than 2 years (Mas mababa sa dalawang taon)
b. 2 to 4 years (Dalawa hanggang apat na taon)
c. 5 to 9 years (Lima hanggang siyam na taon)
d. More than 10 years (Mahigit sampung taon)
__________ 4. Let’s assume that you took a bank credit of 10,000 PHP to be
paid back during a year in equal monthly payments. The credit charge is 6%.
How much is the annual interest on your debt?
(Kung humiram ka sa bangko ng pera na may halaga na Php 10,000, babayaran
matapos ang isang taon na may interest na 6%. Magkano ang babayrang
interest sa iyong hiniram?)
a. 1,000 PHP
b. 900 PHP
c. 600 PHP
d. 300 PHP
Spending
__________ 5. Let’s assume that in 2021 your income is twice as now, and the
consumer prices also grow twofold. Do you think that in 2021, you will be able to
buy more, less, or the same amount of goods and services as today?
(Ipagpalagay natin na nadoble ang iyong kikitaing pera sa susunond na taon,
ngunit ang presyo ng mga bilihin ay dumoble katumbas ng orihinal nitong presyo.
Sa tingin mo ba ay makakabili ka ng mas marami, mas kaunti, o parehas lang sa
kaya mong bilhin ngayon?)
a. More than today (Mas mataas sa halaga ngayon)
b. Exactly the same (Pareho sa halaga ngayon)
c. Less than today (Mas mababa sa halaga ngayon)
__________ 6. Let us assume that you saw a TV-set of the same model on sales
in two different shops. The initial retail price of it was 1,000 PHP. One shop
offered a discount of 150 PHP, while the other one offered a 10% discount.
Which one is a better bargain, a discount of 150 PHP or 10%?
(Napansin mo na may binebentang parehas na TV sets sa magkaibang
tindahan. Ang orihinal nitong presyo ay Php 1,000. Ang unang tindahan ay
nagbibigay ng Php 150 discount at ang pangalawang tindahan naman ay
nagbibigay naman ng 10% discount. Saan sa tingin mo ang makakatipid ka?)
a. A discount of 150 PHP
b. They are the same
c. A 10% discount
Investment
__________ 7. Suppose you have money to invest. Is it safer to put your money
into: (Kung may pera ka at gusto mong mag invest, mas siguradong ilagay ang
iyong pera sa?)
a. One business or investment
b. Multiple Businesses or investments
__________ 8. Investments that are riskier tend to provide higher returns over
time that investment with less risk.
(Puhunan na mas mataas ang risk ay nakakapagbigay ng mas mataas na kita
kaysa sa puhunang mas kaunti ang risk.)
a. True
b. False
c. Do not know
Numeracy
__________ 9. Imagine that five brothers are given a gift of 1,000 PHP. If the
brothers have to divide the money equally, how much does each one get?
(May limang magkakapatid na nabigyan na Php 1,000. Napag isipan nila itong
paghatihatian ng pantay, magkano ang nakuha ng bawat isa?)
a. 100 PHP
b. 200 PHP
c. 300 PHP
d. 400 PHP
__________ 10. Suppose you need to borrow PHP 100. Which is the lower
amount to pay back?
(Nangailangan kang humiram ng Php 100. Saan ka mas makakatipid sa pag
bayad ng iyong hiniram?)
a. 105 PHP
b. 100 plus 3%
Source (Adapted): World Bank Financial Capability Study: Financial Literacy
Survey, Standard & Poor’s financial literacy survey, and Financial Literacy and
the Financial Crisis Survey
x
LITERATURE MATRIX
Determinants/
Author/s Title Year Literature Review Theme
Scope
Financial literacy level of male is higher
Determining Tax Sex
than that of female
Literacy of Salaried
Bhushan, P 2013
Individuals - An Level of financial literacy positively Household
Empirical Analysis related to income and earnings, it Monthly
increases with the increase in income Income
level
Measuring Financial
Literacy: Results of
Atkinson, the OECD /
low-income levels are associated with Educational
A., & International 2012
low financial literacy levels Attainment
Messy, F.A. Network on
Financial Education
(INFE) Pilot Study.
Women generally have less enthusiasm

An Analysis of for and less willingness to learn about
Sex
Personal Financial personal finance topics compared to
Chen, J. &
1998 men.
Volpe Literacy Among
College Students College students had an inadequate
Determinants Educational
knowledge level, especially in relation to
of Financial Attainment
investments.
Literacy
Financial literacy: The factors that were found significant
Das, S. measurement and 2016 are age, sex, educational attainment,
determinants. and level of income.
The economic
financial literacy increases with age, but
Lusardi, A. importance of
declines at old age, with females at all
& Mitchell, financial literacy: 2014 Age
age recorded have lower financial
O. S Theory and
literacy than male.
Evidence.
Determinants of
Financial Literacy:
Potrich
Analysis of the The socioeconomic and demographic
A.C., Vieira
influence of 2014 variables with greater impact on the
K.M. &Kirch
Socioeconomic and individuals' financial literacy.
G.
demographic
variables.
Financial literacy, financial literacy is highly correlated with
Thaler, R. Educational
beyond the 2013 other factors and, among them, Higher
H. Attainment
classroom. Education might be the key.
Debt is an obligation that requires one
party, the debtor, to pay money or other
Chen, J. Investment. 2020 Debt
agreed-upon value to another party, the
creditor.
Cummins,
Financial attitudes
M.M., Spending is the concept of planning that
and spending habits Scope of
Haskell, 2009 refers to individual plan to spend the Spending
of university Financial
J.H., & money.
freshmen Literacy
Jenkins S.J.
Savings refers to the amount left over
after an individual's consumer spending
Kagan, J. Savings 2019 is subtracted from the amount of Savings
disposable income earned in a given
period.
`
Numeracy means having the confidence

National and skill to use numbers and
What is numeracy? 2020 Numeracy
Numeracy mathematical approaches in all aspects
of life.
An exploratory
Joo, S., & framework of the Others define financial well-being as
Grable, J. determinants of 2004 overall satisfaction with one’s financial
E. financial situation
satisfaction. Financial Well-
Financial Education, being
Financial financial well-being as satisfaction with a
Shim, S.,
Knowledge and one’s current financial status and level of
Serido, J., 2009
Risky Credit debt using both subjective and objective
& Xiao, J.J.
Behavior of College measures.
Students.
Analyzed that consumer and financial
Dialogic Practices in literacy is more than just knowing about
Attard, C. the Mathematics 2018 money and financial matters and more
Classroom. than having the skills to work with this
knowledge.
Financial literacy denotes one’s
Bartholoma understanding and knowledge of
ing the Case for
e, S., Fox, 2005 financial concepts and is crucial to
Financial Education
J. & Lee, J. effective consumer financial decision-
making
Financial literacy:
Braunstein, Knowledge of Financial Concepts
an overview of
S. F., & 2002 uttered how knowledge can improve
practice, research,
Welch, C. one’s financial well-being
and policy
Geoffrey, Definition of
Finance refers to all activities related to
F., &Ferrel business finance by N.D
obtaining money and effective use
C. different authors
Financial
Knowledge,
Experience and
Knowledge is worthless without applied Financial
Hogarth, J. Learning
experience, and research has shown Literacy
& Hilgert, Preferences: 2002
that experience forms the bridge
M. Preliminary results
between knowledge and aptitude.
from a new survey
on Financial
Literacy.
Financial literacy has been defined as
“the ability and confidence to use one’s
own financial knowledge to make
Measuring Financial financial decisions”
Huston, S. 2010
Literacy financial literacy including awareness,
knowledge, financial instruments, and
their application in business and
personal life.
financial literacy is a "meaning - making
process" in which individuals use a
Mason,
combination of skills, resources, and
C.L.J., & Conceptualising
2000 contextual knowledge to process
Wilson Financial Literacy.
information and make-decisions with
R.M.S.
knowledge of the financials
consequences of that decision.
`
The Financial Capability Strategy
Conlon, G.,
Children and Young definesas encompassing the financial
Peycheva,
People’s Financial skills, knowledge, motivation and Financial
V. 2018
Capability Deep attitudes required to make good Capability
&Landzaat,
Dive: Parenting financial decisions and to achieve good
W.
financial wellbeing.”
It includes the ability to discern financial
Financial Literacy choices, discuss money and financial
Cude B. and Long- and Short- issues without (or despite) discomfort,
Financial
&Henager- Term Financial 2016 plan for the future and respond
Behavior
Greene, R. Behavior in Different competently to life events that affect
Age Groups. every day financial decisions, including
events in the general economy
The Effectiveness of Literacy is the possession of basic
McCormick, Youth Financial knowledge or competence and Financial
2009
M. H. Education: A review education is the means to build that Education
of the Literature. capacity
On 2014 the World Bank shows a survey
that according from the statement of
Bangko Sentral ng Pilipinas, said that 3
Many Filipinos are
out of 10 Filipino Adults manages to
Lucas, D. still ‘Financially 2018
answer the survey correctly concerning
Illiterate’.
basic numeracy, computing compound
interest, fundamentals of inflation and
investment diversification.
The economic
There is a need of being financial
Lusardi, A. importance of
literate when it comes to plans, savings,
& Mitchell, financial literacy: 2014
and investments and accumulation of
O. S Theory and
wealth
Evidence.
Definition of youth. Youth is defined as all person falling
United Out of School
United Nations 2020 from the ages between fifteen and
Nations Youth
youth. twenty-four years old
Asia-Pacific from the year of 1988-2009 there is an
Canlas, M.
Working Paper average of 246,000 young people joined
E., &
Series. Youth 2009 the labor force every year, the labor
Pardalis,
employment in the force have been generally stable
M.C
Philippines averaging about 57 percent.
Financial Literacy According to the 2008 wave of the
Lusardi, A.,
among the young: National Longitudinal Survey of Youth,
Mitchell, O.
Evidence and 2010 only 27 percent of youth knew what
S., &Curto
Implications for inflation was and could do simple
V. Financial
Consumer Policy interest rate calculations
Literacy of Out
Education is hard to attain for some of School
children that is why the Department of Youth
DepEd, partners Education partners with the National
boost financial Youth Commission, BPI-Globe BanKO,
Mocon- literacy of out-of- and Youth at Venture to increase
2015
Ciriaco, C. school youth. A financial literacy of out-of-school youth
broader look at enrolled under Abot-Alam program that
today’s business aims to register out-of-school youth to
give opportunities for education,
employment and entrepreneurship.
xi
C. Curriculum Vitae
MIKE JULIUS DERIJE DE LEON

Quirino Avenue, Rosario Santiago City, Isabela
Contact Number: 0906 713 5394
Email address: mikejuliusdeleon@gmail.com
PERSONAL INFORMATION :________________________________________
BIRTHDAY: August 16, 2000

BIRTHPLACE: Rosario, Santiago City, Isabela
AGE: 21 years old
NATIONALITY: Filipino
RELIGION: Christianity – Roman Catholic
CIVIL STATUS: Single
FATHER’S NAME: Michael C. De Leon
MOTHER’S NAME: Julie D. De Leon
EDUCATIONAL BACKGROUND:_____________________________________
TERTIARY: University of La Salette Incorporated

Bachelor of Science In Accountancy
Dubinan East, Santiago City, Isabela
2018 to present
SENIOR HIGH: Northeastern College

Accountancy, Business, and Management
Villasis, Santiago City, Isabela
2016 to 2018
`
JUNIOR HIGH: Santiago City National High School

Calaocan, Santiago City, Isabela
2012 to 2016
ELEMENTARY: Rosario Elementary School

Rosario Santiago City, Isabela
2006 to 2012
`
MARC VEN QUEROL BERNABE

Valentin Street, Buenavista, Santiago City, Isabela
Email address: bernabemarcven@gmail.com
PERSONAL INFORMATION :________________________________________
BIRTHDAY: March 4, 2000

BIRTHPLACE: Roxas, Isabela
AGE: 21 years old
RELIGION: Christianity – Roman Catholic
FATHER’S NAME: Vener F. Bernabe
MOTHER’S NAME: Lolita Q. Bernabe

2018 to present
SENIOR HIGH: University of La Salette Incorporated

2016 to 2018
`
JUNIOR HIGH: University of La Salette Incorporated

Malvar, Santiago City, Isabela
2012 to 2016
ELEMENTARY: La Salette Elementary School

Centro West, Santiago City
2006 to 2012
`
TRISHA MAE TAGUINOD DIEGO

Arellano Street, Dubinan East, Santiago City, Isabela
Email address: trishaadiego@gmail.com
PERSONAL INFORMATION :_______________________________________
BIRTHDAY: March 25, 2000

BIRTHPLACE: Santiago City, Isabela
AGE: 21 years old
RELIGION: Christian – Born Again
FATHER’S NAME: Donald P. Diego
MOTHER’S NAME: Arlene T. Diego

2018 to present
SENIOR HIGH: University of La Salette Incorporated

2016 to 2018
JUNIOR HIGH: University of La Salette Incorporated

`
Malvar, Santiago City, Isabela

2012 to 2016
ELEMENTARY: Santiago South Central School

Victory Norte, Santiago City
2006 to 2012

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FINANCIAL LITERACY OF OUT OF SCHOOL YOUTHS

Bernabe, Marc Ven Q.

This paper entitled FINANCIAL LITERACY OF OUT-OF-SCHOOL YOUTHS IN

SANTIAGO CITY, ISABELA, is prepared by MARC VEN Q. BERNABE, MIKE

JULIUS D. DE LEON, TRISHA MAE T. DIEGO, in partial fulfillment to the

requirements of the course: (PBSA006) ACCOUNTANCY RESEARCH has been

approved by the panel of evaluators.

Bachelor of Science in Accountancy.

TERESITA D. MAGBITANG, LPT, MBA

RUPERTO JOSE H. MATEO CPA, MAIT

occurrence of the financial crises. There is an absolute need to enhance the

education put at a disadvantage for out-of-school youths towards economic

selections and financial actions. Financial literacy is low in out-of-school youths,

lacking in economic knowledge, access, and practices.

This study aims to determine the level of financial literacy of out-of-school

youths of Santiago City, Isabela. Savings, debt, spending, investment, and

numeracy were integrated as the measures of financial literacy. With sixty-seven

out-of-school youths, respondents were randomly selected and survey method

was facilitated. To effectively appraise the research problem, the descriptive

percentage. To test the hypothesis, one-way ANOVA is utilized.

level of financial literacy. In terms of specific measures, numeracy of out-of-

with slight differentiation of outcomes when grouped according to demographic

level of financial literacy and demographic variables except with household

level of financial literacy of the out-of-school youths is up to an average level.

It is a great platform for us to write about “Financial Literacy of Out-of-

work could not have been made possible.

Our utmost gratitude to Ma’am Teresita Magbitang, our research

her knowledge and wisdom which greatly improved our study.

To the respondents who impart their honest and cooperative response to

all the questions solicited in this study.

support for the improvement of the research.

much Dear Lord.

come, we wholeheartedly dedicate this piece of work to the whole Salettinian

Community and the College of Accountancy in particular, that allow us to shape

teachers/instructors who keeps inspiring in the possibilities of excellence in

greatest cheerleader in circumstances and triumphs. Our family who in any

the tiring process of this research.

TO GOD BE THE GLORY.

No. Title Page

Background of the study

In recent years, financial crisis and recession are undoubtedly contributing

to the economic downturn of the world that resulted to severe declines in

investors, consumer spending and various investments dropped, peak of

a struggling world finance and economy (History.com Editors, 2009). According

which was fueled by an overabundance of mortgage-backed securities that

bundled loans of high risk. The recklessness of lending resulted in an enormous

defaulted loans that several financial institutions incurred losses, necessitating a

healthier savings, debt management, borrowing habits, investments, and

numeracy. By that, adversities has surfaced the importance of financial literacy.

A composite definition of financial literacy by President Advisory Council

for a lifetime of financial well-being. Being precise about what is meant by

clarify research and ultimately lead more fluidly to practical interventions.”

their financial well-being. Based on a study conducted by the Asian Development

essential for the acquisition of financial protection, power, and knowledge of

regarding inflation, insurance, or even the concept of saving accounts. The

Bangko Sentral ng Pilipinas (BSP) stated “there is a need to improve financial

socioeconomic impact of a crisis.”

Financial literacy is the ability to read, analyze, manage and communicate

et al. 2000; Cude et al. 2006). In a recent study by McGurran (2019), he defines

and expends it to help others. In-depth knowledge of financial literacy is required

to understand how money works and how it can work. It is important to

understand common financial literacy principles.