INTRODUCTION

The rationale for the study

Personal financial planning is a way to effectively anticipate future household

financial demands (Altfest, 2004). Garman & Forgue (2014) defined personal finance
as the study of family and personal assets thought to be crucial to obtaining financial
success. Thereby, it can be deduced that personal finance can be defined as the
necessary monetary knowledge and abilities. Specifically, individuals must have an
insight into personal finance to effectively manage their expenditures to achieve
financial independence and stability.

In past, the term “personal finance” has existed in a rudimentary form and for basic
purposes. Before 1990, the majority of scholars with an interest in personal finance
identified as family economics, consumer economists, consumption economists,
household resource management experts, or consumer educators (Schuchardt et al.,
2007). More pointedly, in the twentieth century, a prosperous family might hire
counselors on a specific financial aspect to advise on monetary management problems
(Altfest, 2004). Besides, the stable increase in the living standard and the rising
complications of financial instruments and tax assessment make a suitable situation
promoting personal finance development (Altfest, 2004). However, personal finance
received little attention from mainstream economists and business experts, who
instead concentrated on more general topics like the development of corporate finance
concepts and the behavior of the money markets (Schuchardt et al., 2007).

In the current global context, which emphasizes the traits of a market with
complicated products, personal finance management ability is becoming more and
more crucial. For example, the importance of having money has increased for
university students, a generation that was nurtured in a credit card society (Roberts &
Jones, 2001). According to Hodson, et al, 2014, although credit cards allow
consumers to delay the payment of goods, it leads to overspending and large debt
balances. More pointedly, college students are a very desirable target market for credit
cards (Mansfield and Pinto 2007), in part because they represent a continuous influx
of potential cardholders who could become lifelong users (Hayhoe et al. 2000), as
well as because their brand loyalty to credit cards is higher than that of most other
goods or services (Hein 2003). However, according to Palan, et al. 2011, college
students who misuse their credit cards engage in compulsive buying habits. For
instance, when students need to buy something, if they rely on credit cards, they will
immediately buy that item without paying attention to their financial ability.
Nevertheless, when they repeat this process for a long time, they will become addicted
to shopping and waste more and more money.

The borrowing habits of young Koreans will be the most suitable example of the
problem. Specifically, nearly half of young Koreans think that buying a house is "a
long way" or "impossible", when house prices in Seoul are already on par with New
York (USA), although their income cannot match (VTV Digital, 2020). As a result, an
increasing number of young people are forgoing saving money for the future in favor
of finding methods to treat themselves now (VTV Digital, 2020). Ergo, youngsters
quickly become overwhelmed with extravagant debt due to their tendency of spending
money without considering the cost.

However, a credit card is not supposed to be a trigger for the unorganized spending of
the younger generation. For instance, with the explosion of online business, many
youngsters have taken advantage of capital rotation by opening many credit cards at
the same time to earn benefits (Chu Linh, 2023). Customers of credit cards, for
example, might fully utilize the card as a clever technique to obtain a company loan.
Customers can borrow money from a bank using a credit card and then repay it
interest-free within 45 to 50 days (The Dan, 2023). Besides, banks frequently provide
advantageous policies like 0% installment payments or 1-5% rebates on purchases
(The Dan, 2023).

The differences between the two ways of using credit cards stated above make it
evident how important personal financial management skills are. Thereby, it is
obvious the young generation in Viet Nam should have solid money management
skills to become financially independent.

This study was conducted to examine the current ability to manage expenses of
students at the University of Language and International Studies for specific and
Vietnamese college students in general. Thereby, I could suggest some solutions to the
problems, which might arise in their way of expense management.

The research questions

According to Terry Turner, the five main components of personal finance are income,
spending, saving, investing, and protection.

 Income: It is the money individual receives from all sources, the cornerstone of
personal finances. Salary, pension, Social Security benefits, rental income, and
investment income are all included.
 Spending: Any money used for expenses is included in spending. Individuals
can put money aside to improve their financial situation by limiting their
spending.
 Saving: Any money from an individual's income that they save rather than
spend is considered savings. It is essential to budget for prospective costs,
whether they are foreseen or not.
 Investing: Savings and investing are not identical. Investments are purchases
that enable an individual to earn future income or savings, whereas savings are
what is left over after expenses. Purchases of mutual funds, stocks, bonds, or
real estate that are anticipated to generate a high rate of return are examples of
investments. However, investing entails risk.
 Protection: Numerous financial products, such as annuities, property/casualty
insurance, life insurance, and health insurance, can be used to manage
protection from financial hazards. These can offer financial security or
safeguard against unforeseen financial expenses.

Spending and saving are, in my opinion, the two most important components of
personal finance. Additionally, individuals are exposed to many ways of managing
personal finances at a young age, which frequently results in the formation of bad
spending habits (Gutter, Garrison & Copur, 2010). Therefore, I believe that we should
first focus on how students budget their money and save. Nevertheless, I supposed the
study must provide answers to the following questions to achieve its success:
  What do students usually spend on?
 How much do students usually spend compared to their monthly income?
 Where does the student's income come from?
 How much money do students usually save each month?
 Is the student's savings habit stable?
 In what ways do students tend to save or invest?
 Compare the spending and saving patterns of different student populations
(individuals who have studied economics and finance compared to those who
haven't; students by years).

The research methodology

The research will focus on answering the mentioned questions and the main research
object is 4th-year ULIS students. Moreover, some comparisons are added for
conducting detailed research. For instance, besides surveying senior students,
freshman students and senior students from universities of economics are invited to
take the survey. Therefore, I could determine some outside factors that might affect
students’ spending and buying habits. This study builds on the framework of
quantitative research. The survey questionnaire will be designed according to
multiple-choice questions.

The research contribution

The international economy in general and Vietnam's domestic economy in particular,

are facing difficulties. This is very evident in the unprecedented 3.02% CPI inflation
in Viet Nam in the past year. And if the current state of student loans (a consequence
of a failure in personal financial management) continues, we can hardly anticipate
major problems will arise. Drawing lessons from Korea, according to the Bank of
Korea, by September 2019, the people of this country owed about 1,600 trillion won,
including money for college, car and home purchases, and card purchases. credit and
online gambling. Besides, a study by the Shanghai University of Finance and
Economics found that the whole Chinese economy would suffer if the debt swelled.
Specifically, when credit debts cannot be paid, households run out of money, and
demand for goods will decrease (VTV Digital, 2020). Thereby, studying students'
spending and saving patterns can therefore reveal problems that are concealed in them
and the remedies that go along with them. Nevertheless, it could assist Vietnam avoid
the financial issues that other nations have faced.

LITERATURE REVIEW

Relevant theories and frameworks

Saving behavior

A key to maintaining strong control over personal finances is to spend less than you
earn and save for the future (Pohane, 2015). By keeping track of your monthly
spending, you may instantly spot any spare cash, which can boost your emergency
fund, retirement savings rate, and even your net worth. But in practice, a lot of people
struggle to set aside extra money for savings.

Factors influencing saving behavior

The JARS system

The rule is named "JARS System of Money Management" because it is illustrated by

placing your income in six separate jars, representing six purposes. The system has
been built by T. Harv Eker, and mentioned in his book named “Secrets of the
Millionaire Mind”. According to the website www.6jars.com, the six jars include:

 Necessity Account (NEC - 55%):

This account is used to handle bills and daily costs. This would include things
like food, clothing, bills, utilities, rent, and mortgage. In essence, it comprises
all of the survival needs.
 Play Account (PLY - 10%):
PLY money is used monthly to make purchases that wouldn't often be made.
Individuals could use the money in this jar to indulge themselves. For instance,
the money could be spent on a weekend getaway, a massage, or a pricey bottle
of wine at dinner. In general, anything that the heart desires can be PLY.
  Financial Freedom Account (FFA - 10%):
The cash jackpot is in this jar. Every individual’s key to financial independence
is this jar. Specifically, the funds deposited in this jar are invested to
create passive income streams. The money should be avoided spending under
every circumstance. Once an individual is financially independent, that is the
only time the money would ever be spent. Even then, the investment's profits
should be the only money consumed. The initial capital should never be used.
 Education Account (EDU - 10%):
The funds in this jar are intended to support personal development and
education. The most priceless resource is the human being. Therefore, a
wonderful approach to spending money is to invest in self-value. Books, CDs,
courses, and other items of educational value can be purchased using the
education funds.
 Long-term saving for spending Account (LTS - 10%):
This jar of money is set aside for more extensive, luxurious purchases. More
pointedly, the funds are utilized for trips, amenities, a plasma TV, a
contingency fund, the education of the youngsters, and various other expenses.
Each month may go a long way. Therefore, an individual is permitted to
possess more than one LTS jar. Divide the 10% among the jars in order of
importance if the individual has more than one LTS.
 Give Account (GIV - 5%):
This container of money is for charitable donations. The money is spent on
friends and family on holidays, special events, and birthdays. In addition to
giving money away, time may be offered. The person may offer to house-sit for
a neighbor, walk a friend's dog, or volunteer in the neighborhood or for a
beloved cause.

This theory is used as a gold standard for spending and saving habits in the research.
Specifically, the scenery that a student spent more than the amount specified by the
rule would be considered unreasonable spending.
Tài liệu tham khảo.

1. Schuchardt, J., Durband, D., Bailey, W. C., DeVaney, S. A., Grable, J. E., Leech, I.
E., ... & Xiao, J. J. (2007). Personal finance: An interdisciplinary profession. Journal
of Financial Counseling and Planning, 18(1).