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FINANCIAL PLANNING OF HOUSEHOLDS IN URBAN BARANGAYS

IN LIPA CITY

A Thesis
Presented to
The Faculty of the Graduate School
College of Accountancy, Business, Economics and
International Hospitality Management
BATANGAS STATE UNIVERSITY
Batangas City

In Partial Fulfillment
of the Requirements for the Degree
MASTER IN BUSINESS ADMINISTRATION

By:

Esiel Jane Cabales Cuevas

Julie Ann Karla Untalan Dimaano
Gracechele Reyes Rodriguez

2018
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APPROVAL SHEET

This thesis entitled “Financial Planning of Households in Urban Barangays

in Lipa City”, prepared and submitted by Esiel Jane Cabales Cuevas, Julie Ann
Karla Untalan Dimaano, Gracechele Reyes Rodriguez in partial fulfillment of the
requirements for the degree of Master in Business Administration has been
examined and is recommended for acceptance and approval for Oral Examination.

DR. JEFFREY MARANAN

Adviser

PANEL OF EXAMINERS
Approved by the Committee on Oral Examination with a grade of ______.

_______________ _______________
Panel Member Panel Member

Accepted and approved in partial fulfillment of the requirements for the degree of
Master in Business Administration.

________
Date
EXECUTIVE SUMMARY
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Title : Financial Planning of Households in Urban Barangays in

Lipa City
Author : Esiel Jane Cabales Cuevas
Julie Ann Karla Untalan Dimaano
Gracechele Reyes Rodriguez
Degree : Master in Business Administration
Year : 2018
Adviser : Jeffrey Maranan
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TABLE OF CONTENTS

TITLE PAGE
APPROVAL SHEET
EXECUTIVE SUMMARY
ACKNOWLEDGMENT
DEDICATION
TABLE OF CONTENTS
LIST OF TABLES
LIST OF FIGURES

CHAPTER

I. THE PROBLEM
Introduction
Statement of the Problem
Hypotheses
Theoretical Framework
Conceptual Framework
Scope, Delimitation and Limitation of the Study
Significance of the Study
Definition of Terms

II. REVIEW OF THE LITERATURE: SYNTHESIS AND

HYPOTHESIS
Conceptual Literature
Research Literature
Synthesis

III. RESEARCH METHOD AND PROCEDURE

Research Environment
Research Design
Subjects of the Study
Data Gathering Instrument
Statistical Treatment of Data
BIBLIOGRAPHY
APPENDICES
CURRICU
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CHAPTER I

THE PROBLEM AND ITS BACKGROUND

Introduction

One measure of standard of living of a household is through family

budgets. A family budget is a statement which shows how family income is spent

on various items of expenditure on necessaries, comforts, luxuries, and other

cultural wants. It shows the distribution of the family income over the various

items of expenditure. A household may have a very large income, but, if it is not

spent in a rational manner, it may not be able to derive maximum advantage from

it. Furthermore, family budgets are mirror of the consumption of a person. the

standard of living depends on consumption and the standard of living determines

economic efficiency, which in its turn leads to economic prosperity. There is no

doubt that the study of family budgets is very useful not only to the household, but

also to the economist, the social reformer and the nation as a whole. Revisiting

your goals yearly is necessary to stay on track with family financial planning. However,

major life events that change the dynamic of your family and, potentially, the strain on

your savings, may require special considerations when it comes to financial planning for

the family. These changes can also have a ripple effect on other areas of your life, like

your tax payments, how soon you can retire and other financial goals such as traveling
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or buying a home. But careful planning during major milestones and lifestyle changes

can ensure you meet these goals and maintain your financial stability for many years.

This study was conducted to come up with a budget plan that may be useful to

every household in selected areas in Lipa City.

Background of the Study

Not all families in the Philippines have the habit of setting up a family

budget. It is necessary that families monitor their expenditures through a family

budget. This is because of the money-related stresses that every household

encounters due to poor budgeting habits or lack of planning.

Our spending decision is usually motivated by our needs and wants.

“Needs” are related to essentials in life, something you cannot live without.

“Wants” are usually things we desire, such as luxury items. More often than not,

our wants are not absolutely necessary. Thus, it is of great importance to know and

consider the priorities that one household must satisfy when it comes to spending.

This study was conducted to assess the characteristics of households in

urban barangays in Lipa City as regards their educational attainment, sources of

income, number of years married, number of children and their educational or

work status, annual household compensation income; and characteristics as

regards the basic needs, financial security, family’s insurance needs, quality of life
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and investments. Afterwards, the researchers will propose a budget plan that will

facilitate the daily spending and budgeting habits of the households.

Statement of the Problem

The study aims to assess the financial planning of the households in Lipa

City to come up with an effective plan.

Specifically, the study seeks to answer the following questions:

1. What are the characteristics of the households in urban barangays in Lipa

City in terms of :

1.1 educational attainment of both husband and wife;

1.2 source of income of family members;

1.3 numbers of years married;

1.4 number of children and their educational/work status; and

1.5 annual household compensation income?

2. What are the characteristics of households in urban barangays in Lipa City

as regards;

2.1 basic needs;

2.2 financial security;

2.3 family’s insurance needs;

2.4 quality of life; and

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2.5 investments?

3. Is there a significant relationship on financial decision of the respondent

when grouped according to characteristics?

4. What budget plan may be proposed for households in Lipa City?

Research Hypothesis

The study focused on studying the financial planning of the households in Lipa

City. The researchers then came up with the hypothesis:

Ho: There is no significant difference on the assessment of the financial planning

of the respondents when grouped according to profile.

Theoretical Framework

According to the theory developed by Ann Henderson- The Bucket Theory

of Financial Management, to become financially worry-free is possible goal. This

“bucket theory” of financial management is a common-sense approach to planning

a family’s financial future. It provides a systematic way for families to set and

reach financial goals and it helps the family build a sound financial foundation.

Through a common-sense approach, one can achieve this aspiration by working at

it systematically.
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The theory was illustrated using buckets hanging in the stair steps. Each

bucket will represent one of the financial priorities. One bucket represents the

basic needs: food, shelter, clothing and transportation; another bucket represents:

financial security: contingency fund and savings plan; the third represents:

insurance needs: life, health and property insurance; the fourth one represents

quality of life: feelings of joy, pleasure, contentment and life satisfaction; and the

last bucket represents investments. The water that flows from one bucket to

another represents the resources that one household has.

Under the theory, each bucket must be filled before resources are diverted

to the next one. The primary resources of a household are used to provide its basic

needs. As income increases and money is left after basic needs are met, the extra

money is used to develop a contingency fund and begin a regular savings plan.

When saving is regular and contingency fund is complete, the next step is to

acquire an adequate insurance to protect the family’s health, income, and property.

When adequate insurance coverage is provided, extra money is then

diverted to building quality of life. Quality of life focuses on feelings of joy,

pleasure, contentment and life satisfaction. The last step is to channel the extra

money available into investments that will provide a secure future for the family.

In line with the study, the researchers used this model to assess the financial
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decisions of households in urban barangays in Lipa City and to eventually come

up with a budget plan that will help them manage their finances.

Conceptual Framework of the Study

The framework used in the study was the input-process-output model or the

IPO Model. A process is viewed as a series of boxes connected by inputs and

outputs. Information or materials objects flow through a series of tasks or

activities based on a set of rules or decision points. Flow charts and process

diagrams are often used to represent the process: what goes in is the input; what

causes the change is the process; what comes out is the output. The IPO model

will provide the general structure and guide for the direction of study.
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Input Process Output

Characteristics of the
households in urban
barangays in Lipa City
in terms of :
 Educational
attainment of
both husband and
wife;
 Source of income
of family
members;
 Numbers of
years married;
 Number of
children and their
educational/work
status; and  Survey
 Annual Questionnaire
household  Data Analysis  Budget Plan
compensation
income?
Characteristics of
households in urban
barangays in Lipa City
as regards;
 Basic needs;
 Financial
security;
 Family’s
insurance needs;
 Quality of life;
and
 Investments?

Figure 1.2

Research Paradigm

The input variables include the characteristics of household in Lipa City in

terms of educational attainment of both husband and wife, source of income of

family members, number of years married, number of children and their

educational /work status and annual household compensation income. It also

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includes the characteristics of household as regards to basic needs, financial

security, family’s insurance needs, quality of life and investments.

Processes are the mediating mechanisms that convert inputs to outputs. A

key aspect of the definitions is that processes represent interactions that take place

among the inputs. The researchers will determine the characteristics of the

respondents using survey questionnaires and informal interviews to gather

important data. Once the information has gathered, different statistical tools will

be used to analyze the data such as relative frequency, percentage, weighted mean,

independent T-test and one-way ANOVA (Analysis of Variance).

Finally, the output of the study refers to the course of action that will be

proposed by the researchers to further determine the effective budget plan for the

households in Lipa City.

Significance of the Study

The researchers believe that this study will be significant to the following:

To the families residing in Urban Barangays in Lipa City, this will provide

a significant knowledge in effective budget plan that will help them decide not

only for themselves but for the sake of the entire family budget.

To the parents, this research will give them awareness on how to maintain

and consider financial priorities.

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To the children, this will help them become mindful of financial priorities

and persuade them to participate in proper handling of their finances given by their

parents.

To the entrepreneurs, this study will also give them the knowledge and

insight about the financial priorities of households and how profile can affect it.

Through this study, they may also explore how families talk about their finances.

The researchers, this study will be given insights on the need for effectively

utilizing the financial priorities. This study will also give the opportunity to gain

knowledge on the behavior of the households on how they manage their finances.

Lastly, to the future researchers, this study will give them essential

information to develop new related studies in the near future.

Scope and Delimitation of the Study

This study will be focused on the financial planning of household in the

urban areas in Lipa City in terms of their basic needs, financial security, family’s

insurance needs, quality of life and investments. It covers the profile of the

household in terms educational attainment of husband and wife, source of income

of family members, number of years married, number of children and their

educational/work status and annual household compensation income.

The respondents of the study were a total of 59,063 household in the urban
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areas of Lipa City. Slovin’s Formula will use to obtain the target number of

respondents. The researchers will use descriptive method of research and self-

constructed questionnaire.

The respondent will be limited to the household of urban areas in Lipa City.

Therefore, the study will not cover the rural areas of Lipa City. And also, the study

will be limited when it comes to the span of time of the data gathering.

Definition of Terms

For better understanding of the study, the following terms are defined

conceptually and operationally.

Bucket Theory – is a common sense approach to planning a family’s financial

future. It provides a systematic way for families to set and reach financial goals.

Financial Planning. - which is the process of developing and implementing a

coordinated series of financial plans, can help you achieve financial success. By

planning personal finances, you seek to manage your income and wealth so that

you reach your financial goals throughout your lifetime. Forgue (2014)

Basic Needs - According to Maslow (2014), the first and most basic needs are

those to do with physical survival. Followed by physical safety needs, love and

belonging needs, self-esteem needs and lastly, self-fulffilled. This is refer to food,

shelter, clothing and transportation.

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Financial Security – may refer to economic security which is the condition of

having the resources to support a standard of living now and in foreseeable future.

This refers to emergency fund and saving fund.

Insurance – a thing providing protection against a possible eventuality. This refer

to life insurance, health insurance and property insurance.

Investment – an act of devoting time, effort, or energy to a particular undertaking

with the expectation of a worthwhile result. This refer to money for education,

retirement and family goals.

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CHAPTER II

REVIEW OF RELATED LITERATURE

Conceptual Literature

The study is concerned with the financial planning of households. The

researchers gathered and reviewed different literature about financial planning of

households which specifically include the following variables of basic needs,

financial security, insurance and investment.

Financial Planning

According to Dlabay (2016), personal financial planning is the process of

managing your money to achieve personal economic satisfaction. This planning

process allows you to control your financial situation. Every person, family, or

household has a unique financial position and any financial activity therefore must

also be carefully planned to meet specific needs and goals.

A comprehensive financial plan can enhance the quality of your life and

increase your satisfaction by reducing uncertainty about future needs and

resources. The specific advantages of personal financial planning include:

increased effectiveness in obtaining, using and protecting your financial resources

throughout your life; increased control of your financial affairs by avoiding

excessive debt, bankruptcy, and dependence on others for economic security;

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improved personal relationship resulting from well-planned and effectively

communicated financial decisions; a sense of freedom from financial worries

obtained by looking to the future, anticipating expenses, and achieving your

personal economic goals (Dlabay, 2016).

We all make hundreds of decisions each day. Most of these decisions are

quite simple and have few consequences. Some are complex and have long-term

effects on our personal and financial situations. Personal financial activities

involve three main decision areas: Spend for daily living expenses, for major

expenditures, and for recreational activities. Save-for long-term financial security,

and share.

Financial goals cover a wide range of financial aspirations: controlling

living expenses, meeting retirement needs, setting up a savings and investment

program and minimizing your taxes. Other important financial goals include

having enough money as well as possible, being financially independent, sending

children to college, and providing for retirement (Gitman, 2016).

According to Gitman (2016), financial goals cover three time horizons: (1)

short term, (2) intermediate term, and (3) long term. Short term goals, such as

buying television or taking a vacation, can be accomplished within a 1-year

period. An intermediate term goal may take from 1 year to 10 years to accomplish.
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Examples include putting aside college tuition money for your 12 year old or

accumulating enough money for a down payment on a new house. A long term

goal is one for which it takes more than 10 years to accumulate the money.

Retirement is a common example of a long term financial goal. Once you’ve set

up a list of goals you need to rank them. Prioritizing goals may make you realize

that some of your goals are simply unrealistic, and you may need to reevaluate

them. However, once you have your financial goals in place, they become the

cornerstone of your personal financial plan, serving as a guide to action and a

benchmark for assessing the effectiveness of the plan.

Decisions that may not seem financial will have a major impact on your

financial situation. Take, for example, the decision to have a child. Although this

isn’t considered primarily a financial decision, it certainly has enormous financial

implications. You must also buy insurance to protect your assets. Initially, you

may require only medical, disability, and liability insurance, but if you decide to

have a family, you will need to provide for your dependents in the event of a

tragedy. For families with children, adequate life insurance is essential. You will

also need a home auto and property insurance (Gitman 2016)

According to Forgue (2014), financial planning which is the process of

developing and implementing a coordinated series of financial plans, can help you

achieve financial success. By planning personal finances, you seek to manage your
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income and wealth so that you reach your financial goals throughout your lifetime.

Basic Needs

According to Pierce (2017), some of the most important basic needs of the

family are housing, good food, affection or protection. The family is considered

the basic nucleus of society. It is the basic unit of development and experience of

the members of a group, as well as of accomplishment and failure. No person can

live in isolation. In essence, the family takes care of two things. First is to ensure

the physical survival and second to build the essentially human of man. This

means that the family nucleus is obliged to meet the basic needs of its members,

ranging from basic biological needs vital to survival to those that guarantee the

development of human qualities.

As discussed by Renzulli (2015), serious young couples used to mark their

commitment to each other with an engagement ring, but now they are in the

market for a bigger asset; a set of shiny new house keys. One in four couples

between the ages of 18 and 34 bought a house together before they were married,

according to a study by Coldwell Banker Real Estate. Money found in their poll of

500 millennial financial attitudes that 40% think it is a good idea for a couple to

buy a home together before marriage.

As said by Maslow, A. H (2014), basic needs have been represented in a

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hierarchical pyramid with five levels. The four levels (lower-order needs) are

considered physiological needs, while the top level of the pyramid is considered

growth needs. The lower needs must be satisfied before higher-order needs can

influence behaviour.

Moreover, according to Pinoy Career Center (2013), needs are man’s basic

requirements to be able to live daily. Examples are food, shelter, and clothing.

People need food so they can have energy to work and study. They need shelter

where they can sleep. They need clothes to wear in school, in office, and at home.

To live without these needs makes life difficult. If a person has a job or has a

source of income, then it is his advantage to meet his needs. But despite of having

a job, there are still many Filipinos who cannot save money, and usually run out of

money. Many persons live beyond the means because people sometimes do not

know the difference between the needs and wants. Usually, they needs based on

the things they see around them, pressure from their friends and family, and being

insecure or envious of others.

Financial Security

According to Dlabay (2012), saving in long term financial security starts in

planning for emergencies, unexpected bills, replacement of major items, and the

purchase of special goods and services, such as college education, a boat, on

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vacation home. Once they have established basic saving components, they may

use additional money for investments that offer greater financial growth.

Family Insurance

Insurance is a contract, represented by a policy, in which an individual or

entity receives financial protection or reimbursement against losses from an

insurance company. The company pools clients' risks to make payments more

affordable for the insured.

There are a multitude of different types of insurance policies available, and

virtually any individual or business can find an insurance company willing to

insure them, for a price. The most common types of personal insurance policies

are auto, health, homeowners, and life.

As said by Chand (2015), insurance has evolved as a process of

safeguarding the interest of people from loss and uncertainty. It may be described

as a social device to reduce or eliminate risk of loss of life and property. An

insurance company contributes a lot to the general economic growth of the society

by providing stability to the functioning of process. The insurance industries

develop financial institutions and reduce uncertainties by improving financial

resources, life insurance encourages savings, promote economic growth, medical

support, spreading of risk and source of collecting funds.

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According to the article written by Obringer & Jeffries (2012), it is said that

because health insurance rates are re-negotiated each year based on the previous

year’s healthcare cost, some employers offer wellness programs for their

employees by lowering medical cost. Phil-health provides a means for the healthy

people, to pay for the care of the sick and for those who can afford medical care to

subsidize those who cannot.

Quality of Life

Quality of life is a highly subjective measure of happiness that is an

important component of many financial decisions. Factors that play a role in

quality of life vary according to personal preferences, but they often include

financial security, job satisfaction, family life, health and safety. Financial

decisions usually involve a tradeoff wherein quality of life is decreased in order to

save money or, conversely, quality of life is increased by spending more money.

Investment

An investment is an asset or item acquired with the goal of generating

income or appreciation. In an economic sense, an investment is the purchase of

goods that are not consumed today but are used in the future to create wealth.

In finance, an investment is a monetary asset purchased with the idea that the asset

will provide income in the future or will later be sold at a higher price for a profit.
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The term "investment" can refer to any mechanism used for generating future

income. In the financial sense, this includes the purchase of bonds, stocks or real

estate property. Additionally, a constructed building or other facility used to

produce goods can be seen as an investment. The production of goods required to

produce other goods may also be seen as investing.

Taking an action in the hopes of raising future revenue can also be

considered an investment. For example, when choosing to pursue additional

education, the goal is often to increase knowledge and improve skills in the hopes

of ultimately producing more income.

Educational Attainment

Educational attainment is a powerful predictor of well-being. Young adults

who have completed higher levels of education are more likely to achieve

economic success than those who have not. In addition to qualifying one for a

broader range of jobs, completing more years of education also protects against

unemployment.

As mentioned by Santos (2012) in his article, Philippines has the worst

unemployment rate in Southeast Asia despite of its respectably high economic

growth rate. The fast-developing era builds up higher competition on the labor
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market which made it harder, even for graduates, to find jobs. That is why some

individuals have no other choice but to accept with minimum salary, lower

benefits and uncertain job tenure.

According to Abante et. Al (2012), having a college degree is an advantage

in engaging to business, which is also an investment of a certain individual.

Source of Income

As Mention by Thompson (2018) in his article, household income is any

money or cash flow that comes into the home on a consistent basis, either through

work or investments. Maximizing the household income ensures that there is

plenty of money when needed. But, with multiple income sources, the impact of

the loss of one income source has less impact on the overall portfolio.

Marriage

According to meriam Webster, marriage is the state of being united as

spouses in a consensual and contractual relationship recognized by law. It is also

an act of marrying status is effected and an intimate or close union.

Marriage lived in truth is an indispensable model of communion for the

world and an affirmation that life is good. The love of husband and wife reminds

us all that no one is an isolated individual, that we need one another at the most

fundamental level. This love is meant to be the context for welcoming, forming,
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and educating new life. This is why marriage, as a personal relationship, has

always been recognized to have great, public significance. The love of spouses,

the responsibilities of mothers and fathers, and the rights of children—all are tied

to the unique truth of marriage and its protection and promotion.

Number of Children

According to Philippine Commision on Women, women in poor

households had the tendency to bear more children than those who are well-off.

The wealth index showed that women in the poorest households bear more

children at an average of 5.2 children per woman compared to an average of 1.9

children per woman in the wealthiest households.

Household Compensation Income

According to Philippine Statistics Authority, the average annual family

income of Filipino families was approximately 267 thousand pesos. In

comparison, the average annual family expenditure for the same year was 215

thousand pesos. Hence, Filipino families has savings of 52 thousand pesos in a

year, on average.
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Research Literature

Some previous studies related to the present study were discussed therein.

The BSP Consumer Finance Survey reports the numbers of households

without deposits accounts. Nevertheless, the overall picture implies that a large

segment of the population has relatively low access to deposit services. Overall,

there is low access to loans from formal institutions. This is substantiated by data

from World Bank that only 10.5 percent adults in the Philippines had Loan from a

formal financial institution in 2010. Micro-entrepreneurs and small enterprises

also suffer from limited access to arrange of financial services despite the

mandatory credit allocation imposed by law. The Magna Carta of Micro, Small

and Medium Enterprises, a law passed by the Philippine Congress mandated that

from June 2008 and June 2018, banks must allocate at least 8 percent of their loan

portfolio for micro and small enterprises and at least 2 percent for medium

enterprises (Llanto G., 2015)

Llanto (2015) stated that poor households could become vulnerable to

catastrophic shocks when risks are uninsured. Faced with such uninsured risks,

poor household may undertake costly strategies to manage their income and assets,

selling earning assets, incurring costly debt, or dissaving. There could be

significant welfare losses and forgone earning opportunities, which could drive
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households to penury.

According to the study of Juacian et al. (2014), investment is a means of

exchanging present income to produce earning at some future date. Banks,

insurance companies, person’s funds and government and all invest excess

income. Investing more in the present time, thus, means that income consumption

will be greater in the future. To invest more, consume less that is for an increase in

investment.

According to the study of Kapoor (2012), most people buy life insurance to

protect someone who depends on them from financial losses caused by their death.

This will also lessen the expenses that may incur when an insured person dies.

That someone could be non-working spouse, children of a single income family,

wife or husband of a two-income family, an aging parent, or a business partner or

a corporation. Individuals and families purchase life insurance to fill financial

needs created by the loss of the breadwinner. Those needs are money to meet

financial expenses, money to live on while the family readjusts itself to the new

condition, an income for the family while children are growing up, and an income

for surviving parent after children have left home. The money from a life

insurance death benefit payable to the specified beneficiary is immediately and

automatically available to the beneficiary unlike saving account or stocks.

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Synthesis

The research literature was provided by the researchers in order to support

the present study entitled Financial Planning of Households in Urban Barangays in

Lipa City. It was gathered from different unpublished thesis as well as the internet,

with related concern for more understanding and analysis of the study. The above-

mentioned studies conducted by local and foreign researchers and added meaning

to their observation.

Furthermore, according to the study of Du, psychology studies how minds

work which originally means the study of mind. Psychologist discuss how human

learn, think and communicate; experiencing emotions and dealing with

information for decision making factor, and this become core concepts to

individual’s behaviors. All those actions would affect investment behaviors, and

are decisions are the results or correlations between emotion and cognition

regardless of being right or wrong.

As discussed by Sonneberg, there has been particular interest in the ways in

which financial resources are distributed among individual household members.

Methodologically, work in this domain has been informed by large scale surveys

and interview studies. The study of Llanto G stated that in terms of usage of

financial services, a relatively small segment of the population has deposit and
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loan accounts. The rise in the number of saving and loan accounts gives an idea of

the growth of financial inclusion, but this cannot simply be interpreted as an

improvement in accessibility of loans and deposit services.

The situation is far worse among the poorest 40 percent of Filipino

households; only about two out of every 10 adults in that group have their own

bank accounts, it also found that the Philippines is one of a few countries around

the world where more than 10 percent of adults seeks loans from private informal

lenders(Llanto). In the study of the World Bank, about 69 percent of Filipinos did

not have bank accounts of their own or maintained one with someone else.

Likewise, neither did this group hold accounts in other formal financial

institutions. This shows that there is a lack on the access to savings and loan

accounts to the households. Fernando in his excellent paper on low income

households’ access to financial services observed that in developed economies,

formal financial sectors serve a majority, 99 percent of the population of Denmark,

96 percent of the population of Germany, 91 percent of the population of the

United States of America, and 96 percent of the population of France has a bank

account.

In the study of Juacian et al., investment is a means of exchanging present

income to produce earning at some future date. While in the study of Lim et. Al.,

entitled “The Study of the Influence of Lifestyle, self-concept and Personality on

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Buying Decisions of Lipa City”, he discussed the concept of the family life cycles

which implies that there are several distinct stages in the life of ordinary family.

In general, different study, revealed that there are different ways on how

every household save or prioritize things most especially when one is on the urban

area. Perhaps urban areas have simply seen a much greater expansion of saving

opportunities and financial infrastructure than have rural areas. Some of them gave

important on the basic needs while the others gave important on things like saving.

Data obtained by the researchers provided information which very much related

and important in the present of this research.

The study of Casas et. Al (2017) entitled “Assessment of Personal Financial

Planning of Public Market Vendors in Batangas City” in their study they sought to

determine personal Financial Planning of Public Vendors of Batangas City. They

come up with this study to produced an IEC materials that will give them idea on

the similarities and differences they have when it comes to personal financial

planning practices and to help them how to manage their finances well.

The study of Andal in 2015 entitled “Assessment on the Personal Financial

Management of the Spouses of OFW in Batangas City” in their study they sought

to find out how the spouses of OFW apply their decision making in allocating their

finances. They come up with this study to somehow give solution though
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exploring economic livelihood programs that will help them to attain a sustainable

life. Personal Financial Management will help OFW spouses to be able to know

how to manage properly their finances.

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CHAPTER III

RESEARCH METHODOLOGY

Research Design

The study will use the descriptive method in assessing the financial

planning of the selected households. In this regard, survey method will be used in

gathering empirical data specifically in assessing the characteristics of households

and to come up with a proposed budget plan. The study will also utilize the

unstructured interview to the information and data gathered. Finally, the responses

of the respondents will be validated.

Research Methods

To conduct the study, the researchers will be using the previous researchers

and data gathered from other reading materials in the internet. Furthermore, the

researchers will prepare a set of questionnaires which will be personally

distributed to the selected respondents.

After the conduct of survey and other data gathering procedures, the results

will be tallied and tabulated.

Respondents of the Study

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There is 59,063 total number of households in urban barangays of Lipa

City. Using the Slovin’s Formula, the researchers came up with 397 sample size of

respondents at 5% margin of error. The respondents of the study were the heads of

the family. If the head of the family is not staying in their family’s home or

working abroad or far from their family home, the person who is present at home

and is a part of the family who is 18 years old and above may answer the survey

questionnaire in behalf of the head of the family.

The data needed for the pursuit of the study will be gathered. The 397

questionnaires will be distributed in urban barangays in Lipa City.

Data Gathering Instrument

Questionnaire will be used as the main data gathering instrument of the

study. The said instrument will be developed, validated, administered and scored

according to the acknowledged practices in the research instrumentation.

Part I of the questionnaire will ask for the characteristics of the households

in terms of the educational attainment of both husband and wife, source of income

of family members, number of years married, number of children and their

educational/ work status, and annual household compensation income.

Part II of the questionnaire will inquire about the characteristics of the

households as regards basic needs, financial security, family’s insurance needs,

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quality of life and investments.

The following Likert Scale will be used in the interpretations of the

responses in terms of Part II:

Options Range Verbal

Interpretation

4 3.50-4.00 Highly Prioritize

3 2.50-3.49 Prioritize
2 1.50-2.49 Least prioritize
1 1.00-1.49 Not prioritize

In order to gather additional valid information from the respondents, the

researchers will be conducting unstructured interview.

Statistical Treatment

To come up with the reliable findings and conclusions, the researchers will

utilize the following statistical tools to obtain an accurate result:

Frequencies and Percentage. This will be used to determine the

characteristics of the selected households.

Weighted Mean. It will be used to determine the average responses of the

options in each item. It will be used to answer the second objective which is the

level of economic well-being of the respondents through satisfying their financial

needs.
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Independent T-test. It will be used to determine the differences of the

responses of the respondents. It will be used to determine the differences in

responses of the respondents towards the level of economic well-being.

One-way Analysis of Variance or F-test. It will used to determine if there

is a significant difference on the responses when grouped according to

demographic profile.
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