Buenaventura, John Christian S.

Com Arts 2 Research

Introduction
Background of the study
Before money was invented, Our ancestors used the system of exchange by which goods
or services are directly exchanged for other goods and services primarily called barter system.
After which, money was invented; Money is used as a standard medium of exchange. Basically it
refers to coins and currency. Money is used as a medium of exchange because it allows us to pay
for the goods and services that people want or need.
At about 1200 B.C. in China, cowry shells became the first medium of exchange. The
cowry has served as money throughout history even to the middle of this century. China, in
1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be thought of as
the original development of metal currency. In addition, tools made of metal, like knives and
spades, were also used in China as money. From these models, we developed today's round
coins that we use daily. The Chinese coins were usually made out of base metals which had holes
in them so that you could put the coins together to make a chain. From the ninth century to the
fifteenth century A.D., in China, the first actual paper currency was used as money. Through this
period the amount of currency skyrocketed causing severe inflation. Unfortunately, in 1455 the
use of the currency vanished from China. European civilization still would not have paper
currency for many years.
In 1816, England made gold a benchmark of value. This meant that the value of
currency was pegged to a certain number of ounces of gold. This would help to prevent
inflation of currency. The U.S. went on the gold standard in 1900. Because of the
depression of the 1930's, the U.S. began a worldwide movement to end tying currency
Buenaventura, John Christian S. Com Arts 2 Research
to gold. Today, few nations tie the value of their currency to the price of gold. Other
government and financial institutions now try to control inflation. At present, nations
continue to change their currencies. For example, the U.S. has already changed its
$100 and $20 banknotes. More changes are in the works.

Statement of the problem
Saving money and reducing expenses is essential. The following specific problems were
addressed in this inquiry:
1. How to manage your money?
2. Why save money?
3. Why is it hard save money?
Hypothesis
The expected answers to the subsequent inquiry above are the following:
1. To manage your money, you need to track down on your expenses. Create a budget plan
that would allocate your money in different portions. Also, you can ask someone to hold
on your money so you could lessen your expenses. The basic way to save money is
having a piggy bank. On the other hand, it is much better to save money on banks rather
than just in piggy banks. To be able to save money, one must set a desired goal that
would be possible to reach with the amount of money left in each day.

2. Saving money is essential, and it is a way to help students in establishing their future.
This can help students prepare for the challenges theyre going to face as they grow up.
Also, saving money can help student get the things they want and it can be a financial
source in case there are financial difficulties encountered.

Buenaventura, John Christian S. Com Arts 2 Research
3. It is hard to save money because the humans wants and needs exceed their available
financial resources. Wants are desires, pleasures, luxuries that people wishes to acquire
but this are also the things that they can live without. Needs are necessities or essentials
that people cannot live without: Basically this are foods, clothing and shelter.

Conceptual framework
To be able to know more about how to reduce expenses and save money, we need to
understand first the circular flow of goods and services. The circular flow of the final goods and
services model illustrates how the transfer of goods and services are being facilitated through the
linkage with the different sectors comprising of the economy.
Three sector model:

A circular flow model of the Economy containing four sectors (business, household,
government, and foreign) and three markets (product, factor, and financial) that illustrates the
continuous movement of the payments for goods and services between producers and consumers,
with particular emphasis on exports and imports.
Buenaventura, John Christian S. Com Arts 2 Research
Saving results from the household and the business firm intention to keep a portion of the
income earned from the sale of resources and produced goods. Saving reduces the money to be
used as payment for resources and consumption expenditure. In the circular flow it is treated as a
leakage for the activity creating distortions to the cycle. The economy will be at equilibrium
when financial institutions make savings available to the households and business firms in the
form of investment.
In an open economy, the fourth sector is described as the rest of the world. The term
connotes presence of other countries engage in trading of goods and services. The circular flow
of goods and services will be at equilibrium by balancing the imports with the exports.

Scope and limitations
This study evaluated the ways on how student can to save money and reduce
expenses but is limited only to the 2
nd
year students of Far Eastern University under the
institute of accounts, business and finance.
The information that would be collected could be used for several purposes such
as helping the students know the importance of money, informing and teaching them the
best ways on how they will invest and save money in the future. Different sites from the
internet, books and surveys are the source of information made by the researchers to
where the information specifically came from. It is more accurate to ask and conduct
surveys to those who professionalized such things about money.
Buenaventura, John Christian S. Com Arts 2 Research
The study will not cover the Importance of money in the perspective of the grade
school, high school, first year, third year, and fourth year college students. Therefore, the
information collected from the said students would be irrelevant. Every research project
includes scopes and limitation of these materials being researched. Without these factors
and information, the reports would be meaningless and would not benefit anyone in the
long run. Perhaps, the information given in this kind of situation will not be collected
because only the students from 2nd year students of Far Eastern University under the
institute of accounts, business and finance will be covered in this research.

Significance of the study
The study will provide additional information on the way students manage their
money. Specifically on how students can satisfy their needs and wants but being able to
reduce expenses and save money. The following are the reasons on why saving money is
essential.
The first and probably the most important savings goal should be building up an
emergency fund. We can't always predict what life has in store for us, so it is best to be
prepared for the unexpected with some emergency savings set aside.
Second, saving for holiday and birthday presents. It can be hard to buy nice
presents for everyone on your list with just the money in your pocket. Start saving for
presents several months before you need to buy the gifts.
Buenaventura, John Christian S. Com Arts 2 Research
Third, saving for something you want. Suppose you want something that costs
much more than your allowance. This could be a computer, a musical instrument, sports
equipment or a special kind of clothing.
Lastly, saving helps you to manage your money. Without savings, when you want
to do something thats not in your current budget, you have to borrow money. Borrowing
is expensive, because not only do you have to pay it back, you also pay interest, often at a
high monthly rate. Saving lets you avoid the interest you have to pay to borrow money.