Financial Literacy and Personal

MODULE 1: The True Meaning of Wealth and the Steps to True Wealth

Learning Outcomes:

At the end of this module, you should be able to: 

1. Identify the importance of Financial Literacy and Personal Wealth

management.

2. Explain the meaning of wealth.

3. Describe and discuss the importance of saving.

4. Apply the concepts of stewardship as a means to financial freedom

1.1 WHAT IT MEANS TO BE WEALTHY?

How would you be able to recognize a rich or

wealthy person just by looking at him or her?
Many people associate wealth with

Money Power.
• But wealth is so much more than money. Money is merely used
to buy stuff, which you can get by other means as well.
• You are "truly wealthy" when you can continue to live
comfortably the lifestyle you desire, and never work another day
in your life.
The True Meaning of Wealth

The real financial wealth is all about; when you

continue living well and comfortable even if you
don't work and just relaxing.

This ideal situation is also what we called financial

independence or financial freedom.
Some call it "financial peace of mind" because you don't have
any more worries about money.
 What Is Financial Literacy?

Financial literacy is the education and

understanding of various financial areas,
including topics related to managing
personal finance, money, and investing.
It focuses on a person's ability to
manage personal finance effectively.

It includes the knowledge of making

appropriate decisions about budgeting,
saving, investing, protection planning,
planning for children's college education,
retirement planning, and estate tax planning.
 
What is Personal Finance?
Personal finance is about meeting
personal financial goals, whether it's
having enough for short-term financial
needs, planning for retirement, or
saving for your child's college
education.
It all depends on your income,
expenses, living requirements, and
individual goals and desires—and
coming up with a plan to fulfill those
needs within your financial constraints.
1.2 WHY IS SAVINGS IMPORTANT?
•A healthy amount of savings is
significant because it is the foundation
on which you will build your wealth.

•Without any savings, you can't achieve

financial security except when you are a
sole heir of millions of wealth from your
parents.
• But you can't be too sure. What if your
parents decided to give most of their
wealth to the charity? That's a big problem.

• So to be sure you must consistently save

(and invest) money for many, many years,
starting now while you are still young until
you can retire in comfort.
Even if you have no intention of becoming wealthy, you should always save for three
essential reasons:

1. Survive a financial crisis.

2. Improve the lives and well-being of the family.

3. Enjoy your golden years.

1. Survive a financial crisis.
• Sooner or later, every person or family has to face some
sort of financial crisis as what is happening now during the
COVID 19 Pandemic.
• The crisis could be in different forms like an accident, critical
illness, loss of a job, failure of a business, or unwanted
death of the family's breadwinner.
• The amount of savings you will have will ultimately
determine how you will survive a financial crisis.
• You may surpass the financial crisis, although you don't
have savings; however, it would lead you into a lifetime debt
burden.
• Sometimes the lack of savings can even make the
situation worse, like a family member dying
unnecessarily due to lack of funds for proper medical
treatment.
• "Saving for the rainy days" will spare your family from
huge financial losses and ensure your survival when
crisis strikes.
• Adequate savings will give you peace of mind and help
you sleep better at night, knowing that you will be able
to handle a financial emergency that comes your way.
2. Improve the lives and well-being of the family.

• It is nearly impossible to buy anything of high value if you do

not have any savings.
• While it's true that money cannot buy happiness, it can
certainly buy things that will improve the quality of life of your
family.
• Sufficient savings can help you buy a beautiful decent house,
a car, pay for children's quality education, or allow you to
invest in a business.
• It also allows you to treat your family to occasional simple
pleasures like vacations that are a good time for family
bonding.
• Many couples quarrel and even separate because of
money problems.
• With enough savings, you will have one less thing to
argue about; it keeps the relationship healthy.
• Financial stability will solve more problems than it
creates if any.
• It's alright to aspire and work hard to build wealth and
achieve financial security so you can let your family
enjoy the good, but not extravagant life.
• It is not greed because of money matters in the
family. It's a T.L.C. (tender loving care) for your family.
3. Enjoy your golden years.
• With significant advances in medical and health care and
greater awareness about fitness and healthy living, many of us
can expect to live to a ripe old age. You can't rely on the
government for your retirement expenses.
• The money you will get from S.S.S. or G.S.I.S. will barely feed
you, and you can find yourself working way past the age of 65 or
dependent on your children if you do not prepare well for your
retirement.
• Saving (regularly), while you are still working, will help you
avoid being forced to continue earning for a living after you retire.
 • To ensure that your golden years will shine and let you do
the things you enjoy, start saving today the funds you will
need for the future.
• For many Filipinos, financial security will be hard to
achieve while in their 40's or 50’s.
• But that should not stop you from hoping and working to
make your retirement financially stable.
• One of the reasons why we are working so hard is to give
our family a better life when you get old.
• Starting to save early will allow you to retire early, giving
you more time to enjoy the fruits of your hard work.
1.3 THE STEPS TO TRUE WEALTH

• Unlike some people who are born rich, the majority will
have to exert a great deal of effort to achieve real wealth; it
will take a lot of sacrifices, and it will take many years to
attain.
• But do not be discouraged because it can be done during
your lifetime. With discipline, unwavering determination,
and relentless drive.
• It all begins with "believing that regardless of what you
have right now, and regardless of how much you earn, you
can achieve financial freedom.
•Being rich doesn't mean you are more worthy as
compared to other people.

•Some people act as if they have more rights and

privileges than ordinary people. Do not be like them.

•Instead, concentrate on what you need to do to

achieve the financial freedom they enjoy and promise
yourself not to behave like them once you have it.
Here are the steps to build your personality and turn
your dream of financial independence to reality;

1.Understand and overcome the obstacles to building

wealth.

2. Know what you want and dream big.

3. Find out where you are and what you have.

4. Make saving a lifelong habit.

5. Spend your money wisely.

6. Get out and stay out of debt.

7. Find ways to earn more, to save more.

8. Prepare for life's financial challenges.

9. Plan for a hassle-free and comfortable retirement.

10. Grow your money through smart investing.

11. Take care of your health to enjoy your wealth.

12. Share your blessings. You are blessed to bless

others.
• We will discuss further these 12 steps
until the end of this course to equip you
with all the knowledge you will be
needed.
 Now let your journey begins.

This Photo by Unknown Author is licensed under CC BY-NC-ND

Reflection:
•Submit 1-page reflection paper about the topic.

1. What is true wealth?

2. What is meant to wealthy?

3. How is wealth created?

Video
1. “How is Wealth Created | Savings and Investments”
https://www.youtube.com/watch?v=Oi9cq7tXkmg

2. “8 practical tips on saving money”

https://www.youtube.com/watch?v=CYAYGIjvy2o