What is Financial Literacy?

Why is it important in
today’s world?
FINANCIAL
LITERACY
“Managing Money
Wisely”
 LEARNING
1. Define OUTCOMES
financial literacy
2. Distinguish among financial plan,
budgeting, saving, spending and
investing
3. Present ways on how to avoid financial
crises and scams
4. Demonstrate understanding of
insurance and taxes
5. Describe a financially stable person
6. Determine ways on how to integrate
financial literacy in the curriculum
7. Draw relevant life lessons and
significant values from personal
experiences on financial crises and
scams
8. Analyze research abstract on financial
literacy and its implications to the
teaching- learning process
9. Make a personal financial plan based
on short-term and long-term goals
 INTRODUCTION
Financial literacy is a core life skill in an
increasingly complex world where people need to
take charge of their own finances, budget,
financial choices, managing risks, saving, credit,
and financial transactions.

Poor financial decisions can have a long-lasting

impact on individuals, their families and the
society caused by lack of financial literacy. Low
levels of financial literacy are associated with
lower standards of living, decreased
psychological and physical well-being and
greater reliance on government support.
However, when put into correct practice, financial
literacy can strengthen savings behavior,
eliminate maxed-out credit cards and enhance
timely debt.
The importance of starting financial
literacy while still young
National surveys show that young adults have the
lowest levels of financial literacy as reflected in
their inability to choose the right financial
products and lack of interest in undertaking sound
financial planning. Therefore, financial education
should begin as early as possible and be taught in
schools.

Akdag (2013) stressed that in the recent financial

crisis, financial literacy is very crucial and tends to
be advantageous if introduced in the very early
years as preschool years.
 FINANCIAL PLAN
Teachers need to have a deeper understanding
and capacity to formulate their own financial
plan.

Kagan (2019) defines a financial plan as a

comprehensive statement of an individual's
long-term objectives for security and well-
being and detailed savings and investing
strategy for achieving the objectives.

The following are steps in creating a financial

plan.
1. Calculating net worth.
2. Determining cash flow.
3. Considering the priorities.
Five Financial Improvement Strategies

1. Identify your starting point.

2. Set your priorities.

3. Document your spending.

4. Lay down your debt.

5. Secure your financial future.

Financial Goal Planning
A. Time horizon.
B. Risk tolerance.
C. Liquidity needs.
D. Investment goals.
Financial Goal Planning
A. Time horizon.
B. Risk tolerance.
C. Liquidity needs.
D. Investment goals.
BUDGET AND BUDGETING
Seven Steps to Good
Budgeting:
1. Set realistic goals
2. Identify income and
expenses
3. Separate needs from wants
4. Design your budget
5. Put your plan into action
6. Plan for seasonal expenses
 SPENDING
1. Start by listing your goals
2. Divide your goals
according to how long it
will take to meet each goal
3. Estimate the cost of each
goal and find out how much
it costs
4. Project future cost
5. Calculate how much you
need to set aside each
period
6. Prioritize your goals
7. Create a schedule for
meeting your goals
 SPENDING
Spending and Goal Planning
1. List your goals: Start by identifying what
you want to achieve, whether short-term
(e.g., paying off debt) or long-term (e.g.,
buying a house).

2. Divide goals by timeframe: Categorize your

goals into short-term (less than a year),
medium-term
(1-5 years), and long-term (more than 5 years).

3. Estimate costs: Research and estimate the

cost of each goal. For example, if your goal is
to buy a car, estimate the purchase price,
insurance, fuel, and maintenance costs.
 SPENDING
4. Project future costs: Consider inflation,
interest rates, and other factors that may affect
the future cost of your goals.

Budgeting and Prioritization

5. Calculate savings needed: Determine how
much you need to set aside each month or
period to achieve your goals.

6. Prioritize goals: Rank your goals in order of

importance and urgency. Focus on the most
critical goals first.

7. Create a schedule: Develop a timeline for

achieving each goal, including milestones and
deadlines.
Investment and Investing
1. How long will you invest the
money? (Time Horizon)
2. How much money do you expect
your investment to earn each
year? (Expectation of Return)
3. How much of your investment are
you willing to lose in the. short-
term in order to earn more in the
long-term? (Risk Tolerance)
4.What types of investment interest
you? (Investment Type)
 Investment and Investing
1.How long will you invest the money?
(Time Horizon)

Your time horizon refers to the length of time

you can afford to keep your money invested.
This influences your investment strategy:

Short-term (less than 5 years)

Medium-term (5-10 years)
Long-term (more than 10 years)
 Investment and Investing
2. How much money do you expect your
investment to earn each year? (Expectation
of Return)

Determine how much you expect your

investment to earn each year.

Inflation: The rate at which prices rise,

affecting the purchasing power of your
money.
Historical performance: Research the
average returns of different asset classes
over time.
 Investment and Investing
3. How much of your investment are you willing
to lose in the short-term in order to earn more
in the long-term? (Risk Tolerance)

Assess your willingness to take on risk,

considering:

Risk aversion: A preference for low-risk

investments, even if it means lower potential
returns.
Risk neutrality: A willingness to take on
moderate risk in pursuit of average returns.
Risk seeking: A tolerance for high-risk
 Investment and Investing
4. What types of investment interest you?
(Investment Type)
Explore various investment options:

Stocks: Represent ownership in companies, offering

potential for long-term growth.
Bonds: Represent debt obligations, providing regular
income and relatively lower risk.
Real estate: Invest in physical properties or real estate
investment trusts (REITs).
Mutual funds: Diversified portfolios of stocks, bonds, or
other securities.
Exchange-traded funds (ETFs): Similar to mutual funds but
trade on an exchange like stocks.
Alternative investments: Include assets like
cryptocurrencies, commodities, or private equity.
 SAVINGS
10 Reasons Why Save Money
1. To become financially independent6. To augment annual expenses
2. To save on everything you buy 7. To settle unforeseen
expenses
3.To buy a home or a car
8. To respond to emergencies
4.To prepare for the future
9. To mitigate losing your job or
5.To get out of debt
getting hurt
10. To have a good life
 SAVINGS
1. To Become Financially Independent

Saving money helps you achieve financial independence,

allowing you to make choices without being constrained by
financial limitations.

2. To Save on Everything You Buy

Having a savings cushion enables you to take advantage

of discounts, negotiate prices, and make smart purchasing
decisions.

3. To Buy a Home or a Car

Saving for a down payment on a home or a car can help you secure
better loan terms and avoid financial strain.
 SAVINGS
4. To Prepare for the Future

Saving for retirement, education, or other long-term goals

ensures you're prepared for life's milestones and
uncertainties.

5. To Get Out of Debt

Building an emergency fund helps you avoid debt and

provides a safety net for unexpected expenses.

6. To Augment Annual Expenses

Saving for annual expenses, such as property taxes or

insurance, helps you budget and avoid financial shocks.
 SAVINGS
7. To Settle Unforeseen Expenses

Having a savings buffer allows you to cover unexpected expenses,

such as car repairs or medical bills, without going into debt.

8. To Respond to Emergencies

A savings fund provides peace of mind, enabling you to respond to

emergencies, such as natural disasters or job loss, without financial
stress.

9. To Mitigate Losing Your Job or Getting Hurt

Saving for unexpected events, such as job loss or illness, ensures

you can maintain your standard of living while you recover.

10. To Have a Good Life

Ultimately, saving money allows you to enjoy life's experiences,

pursue your passions, and create lasting memories without
Common Financial Scams to Avoid

A. Phishing

B. Social Media Scams

C. Phone Scams

D. Stolen Credit Card Numbers

E. Identity Theft
Every year, fraud cases are getting worse, leaving countless victims in trouble
and danger through data breaches, identity theft and online scams.
Unfortunately, new and improved technology only gives fraudsters an edge,
making it easier than ever. for scam artists to nab financial data from
unsuspecting consumers (Bell, 2019).

10 Tips to Avoid Common Financial Scams

1. Never wire money to a stranger

2. Don't give out financial information

3. Never click on hyperlinks in emails

4. Use difficult passwords

5. Never give your social security number

6. Install Antivirus and Spyware protection

7.Don't shop with unfamiliar online retailers

8. Don't download software from pop-up windows

9. Make sure the websites you visit are safe

10. Donate to known charities only

FINANCIAL SCAMS AMONG STUDENTS

A. Fake scholarships.

B. Diploma mills.

C. Online book scams.

D. Credit card scams.

 Insurance and Taxes

1. Employer-Sponsored 2. Marketplace Plans

Insurance
Life. insurance

1. Preferred Plus

2. Preferred

3. Standard Plus

4. Standard

5. Substandard

6. Smokers
 Benefits of Life Insurance

1. It pays for medical and funeral costs

2. For financial support

3. For funding various financial goals

4. Acts as a retirement secured conform

5. It covers costs incurred from taxes and

debt
 Types of Life Insurance

1. Endowment 2. Term

3. Whole Life 4. Variable Universal

 FINANCIAL STABILITY
10 Strategies in Reaching Financial Stability
5. Keep your family secure
1. Make savings
automagical 6. Eliminate and avoid debt
2. Control your impulsive
7. Use the envelope system
spending
8. Pay bills immediately
3. Evaluate your
expenses and live 9. Read about personal
finances
frugally
4. Invest in your future 10. Look to grow your net
Signs of Being Financially Stable

Rose (2019) presents some signs of a

financially stable person.

1. You never overdraw your checking

account.

2. You don't lose sleep over finances.

3. You use credit cards for convenience and

rewards but never out of necessity.

Signs of Being Financially Stable

4. You don't worry about losing your job.

5. You pay your bills ahead of time.

6. People ask your opinion about financial

matters and you inspire them.

7. You're generally happy with your

financial situation.
Signs of Being Financially Stable

8. You finance your cars over five years or

less if you take loans at all.

9. You contribute more to your retirement.

10. You don't feel guilty when you're out for

special occasions.
Signs of Being Financially Stable

11. You can afford to buy the things you

really want.
12. Recreational spending doesn't appeal to
you.
13. You're a natural saver.
14. You're generous with money when it
comes to charities or helping others.
15. You're confident about your future.
Signs of Being Financially Stable
16. Your net worth grows significantly from
year to year.
17.You have substantial equity in your home.
18. You consistently live beneath your means.
19.You could survive for months without a
paycheck.
20. You feel in control of your finances and
never dominated by them.
Integrating Financial Literacy into the Curriculum
• Financial education in schools should be part of a
collaborative national strategy to ensure relevance and
long-term sustainability. The education system and
profession should be involved in the development of the
strategy.
• Barry (2013) underscored that financial literacy has a
wide repercussion outside the family circle and more
precisely, the school. Hence, administrators and
professors need to develop a curriculum that would
provide students insights on having the value of financial
• there should be a learning framework, which sets out
goals, learning outcomes, content, pedagogical
approaches, resources and evaluation plans. The content
should cover knowledge, skills, attitudes and values. A
sustainable source of funding should be identified at the
outset.
• Financial education should ideally be a core part of the
school curriculum. It can be integrated into other
subjects like mathematics, economics, social studies,
technology and home economics, values education and
others. Financial education can give a range of 'real-life'
 Do you consider
yourself as a Financial
Literate? Why?
 “NEVER SPEND YOUR MONEY BEFORE YOU HAVE IT”
-Thomas Jefferson

“EVERYTIME YOU BORROW MONEY, YOU’RE ROBBING YOUR FUTURE SELF”

– Nathan Morris

“FINANCIAL FREEDOM IS AVAILABLE TO THOSE WHO LEARN ABOUT IT AND WORK

FOR IT”
- Robert Kiyosaki
THANK YOU FOR LISTENING!
GROUP 4

Jabines, Pryah Alba, Bernagrace

Billiona, Cendie Lapura, Lara
Sapuras, Ariel Blase, Lea Bianca
Convicto, Renalyn Golandrina, Camille