Successful Money Management Begins with Record-Keeping

Successful money management includes keeping records of

money spent. This includes having the skills to know how much
money is available, how much money has been spent, and how
much money must be saved for future needs.
In the course of this lesson therefore, students will have to
come up with their own Income and Expense Record, as well as a
Budget Plan. The objective is to be able to see in black and white
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that it becomes clearer to the
person concerned. This can actu-
ally serve as his or her guide.

Financial Responsibility
and Money Management
US 11 Social Studies
Economics and Financial Literacy
Term 2
Measurement Topic 4

For starters, open your textbook

to page 502 to 503. There you
can learn how to create a simple
budget.
Now, this may look corny to you or may even come across as
ridiculous, but see putting your expenses on paper and seeing
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Choosing to spend and choosing to save are two decisions that
will hound you for the rest of your lives. Choosing one over the
other may make or break you and may as well spell the differ-
ence between success and failure.

Name : _______________________________________
Section: _______________________________________

INTRODUCTION:

Decision-making and Opportunity Cost:

Challenging Times

Financial responsibility and money management is the process of

managing money and other assets in a manner that is considered
productive and in the best interests of the individual or family.
Being proficient at the task of finance and money
management involves cultivating a mind set that makes it possible
to look beyond the wants of today in order to provide for the needs
of tomorrow.

As a result of scarcity, everyone has to make choices. For example,

a decision to go to a university will involve a high commitment of
both time and money; time that you spend in the university could be
used to earn money already. However, if someone gets a degree,
that person is likely to earn more in the future. In the same manner,
a teen-ager like you who decides to use time and money to go out
with friends and spend both resources, pays a high opportunity cost.
Both resources could have been saved and could have generated
more wealth.

But delaying gratification becomes a true challenge espe-

cially for this generation. It is said that people your age or
those born between 1980 to 2010 comprise the so-called,
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tion. This is because you were born at an age when every-
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Delaying Gratification, Key to Building Wealth

A person goes through a personal life cycle: infancy,
childhood, adolescence, young adult, middle age and then
old age. At these different stages, needs and wants
changeso does income. At all stages of life, most
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needs and certainly with their wants. But they will have
to make decisions. Unfortunately, for each choice that
they make, there is a corresponding opportunity cost. It
is for this reason that a course on financial responsibil-
ity and money management becomes even more relevant
especially for young people like you.
Here are the specific objectives for this Measurement
Topic:
1.) Evaluate financial decision-making involving different alternatives by examin-
ing costs and benefits.
2.) Write a personal financial plan that includes financial goals and a budget,
including spending on goods and services, savings and investments, insurance
and philanthropy.
3.) Use data to determine the conditions of individual finances and be able to
make savings and investment decisions.
4.) Compare different payment methods by pointing out their advantages and
disadvantages.
5.) Reading financial reports (bank statements, stock market reports, mutual
fund statements) enables individuals to make and analyze decisions about their
personal finances.

In 1972, a professor/psychologist from Stanford University in Cali-

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7HVW,QWKLVVWXG\PRUHWKDQIRXU-year old kids were given one
marshmallow each and were told that if they waited for twenty
minutes before munching into their candy, they will be rewarded
with an additional marshmallow.
The preschoolers promised to wait but as expected a good number
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also gave in to the temptation after a while. The successful ones
however, did all they can to distract themselves and delay their
enjoyment in order to get the reward of having one more marshmal-
low. They did this by turning away in order to avoid looking directly
at the candy. Some covered their eyes, while others did things like
kick the desk and play with the other participants.
This study may seem all too simple. It may look like a plain test of
willpower, but the original experimenter kept track of the lives of the
children that participated even after 40 years and what he found out
revealed far more significant results than he originally thought. The
findings many years after revealed that those children who were
willing to delay gratification became more successful in life.
(For an updated version of the Marshmallow Test, view this you tube video at http://www.youtube.com/
watch?v=QX_oy9614HQ )

For example, Internet has made it very easy for you to

search for any information on any topic. All it takes is just
one click of the mouse and presto! You have thousands of
websites at the tip of your fingers. When you are hungry,
all you need to do is go to a fast food where you do not do
much waiting, because as the name suggests, food is
served fast. In fact, if you are really hungry, a faster fix
would be a pack of instant noodles or instant cereals. When
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out of your way to do it, you either send them an e-mail,
which will get to them in a matter of seconds. Or if you
want something better, you can use any social networking
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not only through texts or messages, but also by sharing
pictures, videos, music and other digital files.
Because of this fast-paced technology, it is so difficult to
instill in young people nowadays the value of delayed grati-
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kids could have gotten two marshmallows if only they
waited for just 20 minutes more.
Now, this idea of delaying gratification or satisfaction is at
the heart of this lesson on financial responsibility and
money management: your sacrifices now or in the near
future can lead you to a better and more stable future. But
you must know the skills to make this work for you.