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EFFECT OF FINANCIAL STATUS ON ACADEMIC PERFORMANCES OF

GENERAL ACADEMIC STRAND IN NARRA NATIONAL HIGH SCHOOL

A Research Paper Presented

To the Faculty of Narra National High School

Panacan II, Narra, Palawan

In Partial Fulfillment

Of the Requirements for

Practical Research 1

BERNALES, KIA ROSE

LAUREEN JOY, PADRIGO

MARTINEZ, FERDINAND

SUMONDONG, JAN ROVIC

TANOTE, RICA JOY

February 2019
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DEDICATION

This study is dedicated to our families: Bernales family, Corpuz family, Martinez

family, Sumondong family, and Tonote family for their supporting us to do our best and

to achieve our dreams.

To God be the Glory

Acknowledgement

The researchers would like to extend their heartfelt thanks to those who help to

make their paper in reality. They sincerely convey their never ending gratitude to

everyone especially to the following;

First of all our almighty God for giving them rare talent that helped them to

enhance the research capability for their benefit of mankind which not would be possible

without Him.

To Mrs. Cassy Ann Nejal Ramil for her untiring support. For her nonstop

reminding and checking their paper perfectly;

CHAPTER I

INTRODUCTION

Background of the Study

Financial literacy has become one of the most concerned issues in the developed

countries in recent years especially after the economic crisis of 2008 since the effects of

personal finance are significant to societies. Financial can cause physical illness,

especially if a person experience high stress. In cases student struggle to get out of their

own way to achieve the academic goals. Poor study, lack of motivation and poor

preparation negatively impact student performance. However, student also face more

indirect conflicts with high academic achievements from areas like finance and family

support. Financial problem can cause a lot of effect on the education sector the increase

exorbitant lost of formal education constitute the major excuse most parent.

Some student could not pay attention in the class, rather thinking of how to get

money to buy their practical material, handout etc. In most institution today some

students whose studies are going smoothly suddenly fail a victim of half education

because of their parent or guardians who go through financial crisis or they could lose

them and that could make them stop their education also having a loose of financial can

affect to the academic performance of the student.

Purpose of the Study

The purpose of this study is to determine the effect of financial status on

Academic performance of SHS student in General Academic Strand in Narra

national high school.

Statement of the Problem

This study focuses on the effect of financial status on Academic

performance of SHS student in General Academic Strand in Narra National high

school

Specifically, it seeks to answer the following questions;

1. What is the demographic profile of the respondents in terms of:

a).Year level

b).GWA

2. Are the respondents get their financial through working or parents Commented [vivo 19061]: Are

support?

3. Is there an effect of financial status of the respondents to their academic

performance?

4. How does financial status affects the academic performance of the

respondents?

Significance of the Study

The result of this study will be beneficial to the following:

To the parents; this will open the eyes of parents to strive more and

provide enough money to sustain the education of their children.

To the School Administrator; this research can help them to identify the

factors affecting the academic performance of the students.

To the teachers; the data to be collected from this research will give some

insights, the difficulties experiencing by their student. that they may give

consideration in giving activities and projects to the students who cannot afford to

contribute or buy their requirements. But instead, allow them to complete their

requirement so may that they don't need to use pennies frequently.

To the students, Students can gain additional knowledge in this study and

strive more even day are struggling financially,study well and succeed no

matter what happens.

To the future Researchers; this study can be used as their guide and

examples on doing similar or related study.

Scope and Delimitation

This is conducted in Senior high school General Academic Strand Grade

11 students in Narra National High School.

This study will focus on the effect of financial status on academic

performance in grade11 students in General academic Strands only.

Definition of key terms

Academic performance- In this study, it refers to the General Weighted

Average of the student.

Economic- In this study, it refers to the studies the production, distribution, and

consumption of goods and services.

Education- In this study, it refers to the learning of students

Financial Status- In this study, it refers to the person income,savings, property.

Students- In this study, it refers to the learner or someone who attends an

educational institution particular at Narra National High School.

Chapter II

Review Related Literature

Lusardi (2008) demonstrates widespread financial illiteracy among the masses.

According to him, most individuals cannot perform simple economic calculations and

lack knowledge of basic financial concepts. One reason people fail to plan for retirement,

or their planning is not successful, may be because they are financially illiterate. In this

case, they may fail to appreciate the role of compound interest, inflation, and risk

(Lusardi, 2003). Financially illiterate households make poor choices that affect not only

the decision makers themselves, but also their families and the public at large (Gale &

Levine, 2010). Lusardi (2008) mentions that failure to plan for retirement, lack of
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participation in the stock market, and poor borrowing behavior can all be linked to

ignorance of basic financial concepts. Cole and Shastry (2008) write that a society, that

expects individuals to take responsibility for managing their finances and to determine

how much to save, is in trouble if its citizens are ill-equipped to make wise financial

decisions. Financial education is the process by which people improve their

understanding of financial products, services and concepts so they are empowered to

make informed choices, avoid pitfalls, know where to go and act to improve their present

and long term financial well-being. Financial education programs should be encouraged

to promote financial awareness and encourage people to make better financial decisions

(María, 2013). Cole and Shastry (2008) describes four-part model of education in which

financial education aims to increase financial knowledge, which improves financial

behaviours and decision and finally financial outcomes such as money saved. Consumer

Bankers Association believes consumer financial education is important and is committed

to the goal of expanding financial education and improving consumers' understanding of

the complexities of consumer financial services-whether in mortgages, credit cards,

student loans, deposit products, or all the ways in which consumers interact with

financial. CBA also support financial literacy programs in public schools. Lusardi and

Mitchell (2006) examine that the provision of financial education via retirement seminars

can foster savings and also the allocation of portfolio components into complex assets

such as stocks. Financial education might impact borrowing behaviour, discount rates,

and risk- aversion. Households with higher levels of education are more likely to

participate in financial markets, and show more responsible financial behaviour such as

writing fewer bounced checks, and paying lower interest rates on mortgages (Eccles,
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Ward, Goldsmith & Arsal, 2013). Lusardi (2008, 2009) concludes that financial

education programs result in improved saving behavior and financial decision-making.

Kiyosaki (2008) wrote in his book that without financial education people cannot process

info and produce knowledge that can guide them to take financial decisions. The

increasing complexities of the financial landscape coupled with the economic difficulties

illustrate the need that financial literacy should be a national priority to prepare

households for an economic future (Gale & Levine, 2010; Condon, 2010). Understanding

financial literacy is of critical importance for policymakers; it can aid those who wish to

devise effective financial education programs targeted at young people (Lusardi, Mitchell

& Curto, 2009; Lusardi & Mitchell, 2009; Lusardi, 2008). Widespread financial literacy

might also provide broad social and economic gains as vulnerable households make

better financial decisions (Braunstein & Welch, 2002). To enhance such decision making,

the government should have a policy of fostering financial and economic education for

the society (Cole & Shastry, 2008). Improving financial literacy has become an important

goal of policy makers and businesses (Eccles et al., 2013). Launching a campaign to

place financial literacy on the national curriculum, Gill Ball, finance director of

Birmingham University equalizes the increasing level of individual indebtness as the

financial equivalent of global warming (Bellman & Zadeh, 1970). 2.3. Financial literacy

improves financial behaviour Financial literacy is crucial to effective financial decision

making with respect to budgeting, debt management, wealth creation, retirement planning

etc. Financial decision making requires the abilities to reason, retrieve information and

perform quantitative tasks regarding money (Tannahill,2012). It is the ability to make

informed judgments regarding the use and management of money and wealth (Gale &
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Levine, 2010; Holden, Charles, Laura, Deanna & Beatriz, 2009). Those who are more

financially knowledgeable are much more likely to have planned (Lusardi, 2008).

Financial literacy can have positive effects on financial behavior. Increased financial

literacy could help individuals understand their saving situations better, save more, and

attain higher economic status and more economic security (Lusardi et al., 2009; Barcus,

2011). In words of Maria (2013), individuals who attended credit counselling programs

for 3 years were able to reduce their debt and improve their credit card handling. Rooij,

Lusardi, and Alessie (2007) use questionnaire for the Dutch DNB Household Survey to

show that financially sophisticated households are more likely to participate in the stock

market. Lusardi (2003) describes that households with greater financial sophistication are

more likely to participate in risky assets markets and invest more efficiently. He

demonstrated a strong link between financial knowledge and financial behavior. Lusardi

and Mitchell (2006) took several new steps in linking workers’ financial literacy to their

success at retirement planning and their accumulation of retirement wealth. According to

their opinion, financial literacy may influence household saving outcomes by influencing

planning patterns. There are empirical observations that financial literacy is associated

with higher retirement wealth. Lusardi and Tufano (2009) find a strong relationship

between debt literacy and financial experiences. In particular, those who have the highest

levels of debt literacy are less likely to face problems with debt, while those with lower

levels of debt literacy tend to judge their debt as excessive. Braunstein and Welch (2002)

suggest that better financial literacy could encourage greater personal saving and improve

financial and economic security on retirement. He finds that respondents who attended
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high school in states mandating financial education reported saving rates 1.5 percentage

points higher than those who did not. Warschauer and Sciglimpaglia (2012) mention that

the economic benefits that an individual / family receive by completing the financial

planning process are divided into three areas: increasing wealth, preventing loss, and

smoothing consumption. On Debt Literacy, Lusardi and Tufano (2009) highlight the need

for relevant and effective financial literacy information. People with low financial

literacy are more likely to have problems with debt. On Retirement Preparedness, Lusardi

and Mitchell (2006) mention that people with low financial literacy are less likely to

participate in the stock market, less likely to choose mutual funds with lower fees, less

likely to accumulate wealth and manage wealth effectively and less likely to plan for

retirement. Lack of planning is pervasive among older workers, according to Lusardi

study in 2000 and 2002. These findings show that many workers lack the information

necessary for making saving decisions and poor planning is the primary result of

financial illiteracy. Carol's mission is to promote financial intelligence in all levels of

society and families by educating them on the necessity of understanding their financial

behavior and how it affects their money. She teaches skills that empower them to manage

their money better through the use of simple and easily understood tools and techniques

(as cited in Yip & Sang, 2009). 2.4. Financial Intelligence enhances effectiveness of

financial decisions Financial intelligence is the gathering of information of financial

relevance, to understand its effect and interpretations, and predict its behavior and

outcomes. It helps in improving decision-making skills and boost control over finances

(Berman, Knight, & Case, 2006). According to Dedrick, Financial intelligence goes

beyond the provision of financial information and advice. It is the ability to know,
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monitor, and effectively use financial resources to enhance the well-being and economic

security of oneself, one’s family, one’s business. We need the awareness to know what

state we are in so we know where we are going. Having good financial IQ is not about

saving tons of money or dumping them into mutual funds. It is building a wealth of assets

that will generate money. The recognition of the importance of financial planning means

creating and evaluating financial statements for financial wellbeing. The financial

information of an individual is contained in financial statements. Three basic financial

statements that are of great significance are balance sheet, profit & loss account and cash

flow statement (Warschauer & Sciglimpaglia, 2012). Financial statements serve as the

basis for financial planning, analysis and decision making. It is needed to predict,

compare and evaluate one’s earning ability (Panday, 2009). Financial statements give the

knowledge that can help in leading and managing money more effectively (Yip & Sang,

2009). Some entrepreneurs think they don’t need to undergo financial sector but as they

grow in their company, they need to see and understand the information contained in

three basic statements. Managers who are financially intelligent understand the basics of

financial measurement (Berman, Knight & Case, April, 2008). Financial intelligence

arms managers with accessible, jargon-free information to manage their balance sheet

and practical strategies for improving their financial performance. Financial intelligence

gives non-financial managers the financial knowledge and confidence for their everyday

work (Berman et al., 2006). Financial intelligence helps IT managers to understand what

is happening in their company from a financial perspective. Financial intelligence shows

them how to use the information to work and manage more effectively (Malagoli,

Giovanni, & Magni, 2005). Even an HR manager need to understand the basics of
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financials, and has to apply financial rules, assumptions and estimates. He can use the

information to analyse the numbers in greater depth and to make financial decisions

(Berman et al., March, 2008).

Lamba (2010) emphasised that non finance people feel that finance is something

complicated and beyond the scope of their understanding. Finance is an integral part of

everyone’s life and financial principles are based on pure and simple common sense. The

ability to take financially intelligent decisions is financial management. It is the ability to

understand the impact of every decision on net worth or economic position and to ensure

that all the actions should be taken to strengthen economic position and do nothing that

weakens it.

CHAPTER III

RESEARCH DESIGN AND METHODOLOGY

The objective of this chapter is to describe the methodology that is used to

reveal the effect of financial status on academic performance in grade11 students in

General academic Strands.

Research design

The descriptive method will be used in this study. This will be utilized in order to

gather data on the effect of financial status on academic performance in grade11 students

in General academic Strands.

Respondent of the Study

The respondents of this study are the SHS student of Grade 11 of General

Academic Strand.

Sampling procedure

In this study, questionnaire will be used in which it is a method that chooses all the

possible answers of the respondents. The researchers will formulate questions to gather

more knowledge about the effect of financial status on academic performance in grade11

students in General academic Strands.

Research Instrument

A questionnaire will be distributed to the grade 11 students, then the data will be

collected and analyzed.

Data gathering Procedure

A letter of request to be presented by the researcher to the school principal for

approval to administer this study in Narra National High School. The same letter will be

presented to General Academic Strand adviser for the conduct of this study.

Data analysis

After the collection of data, each data result will be analyse comprehensively.

Tabular and graphic presentation will be the primary basis for the discussion of the study,

drawing summary and conclusion as well as the recommendation.