FINANCIAL

LITERACY
A student guide to personal finance concepts and goals

Cado, Jamaica Grace V.

Caspe, Rhea C.
BSED-MATH 3B
Cerillo, Gabriel B.
Collantes, Jemuel C.
 define what is financial

Learning
01 literacy;

Objectives: 02
Identify and differentiate key
financial concepts such as
At the end of the lesson, budgeting, saving, spending,
the students are expected to: and investing; and

create your own financial

03
plan.
 Introduction
What is financial literacy?

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.

Financial literacy is the ability to make informed judgments and make

effective decisions regarding the use and management of money. Hence,
teaching financial literacy yields better financial management skills.
 Introduction
What is financial literacy?

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 education. is a long-term process and
incorporating it into the curricula from an early age allows children to acquire the knowledge and
skills while building responsible financial behavior throughout each stage of their education (OECD,
2005).
 Financial Plan

A comprehensive statement of an individual’s long term

objectives for a security and well-being and detailed
savings and investment strategy for acchivening the
objectivees. (Kagan 2019)
 01 Identify your starting point

Five financial 02 Set yout priorities

improvement 03 Document your spending

strategies 04 Lay down your debt

05 Secure your financial future

Financial 01 Time Horizon

goal 02 Risk tolerance

planning and 03 Liquidity needs

setting 04 Investment goals

Financial 01
At least once a year, reevaluate your financial plan.
Perhaps you are earning more income, or your
budget is too restrictive. It is okay to make changes

Tips
that fit your personal financial goals.

02
Small changes can make a big difference over time.
For example, put a little bit more income into savings
each month or decrease how often you go out to eat.

Create a positive financial mindset. Thinking about

03 finances doesn’t need to be overwhelming. Be

aware of your spending habits. Take note of your
strengths and areas where you can improve.
BUDGET AND BUDGETING
BUDGET AN BUDGETING

Budget is an estimation of revenue and expenses over a specified future

period of time and is usually compiled and re-evaluated on a periodic
basis. Budgets can be made for a variety of individual or business needs
or just about anything else that makes and spends money.

Budgeting, on the other hand, is the process of creating a plan to spend

money. Creating this spending plan allows one to determine in advance
whether he/she will have enough money to do the things he/she needs
or likes to do.

Thus, budgeting ensures to have enough money for the things needed
and those important ones and will keep one out of debt.
 7 STEPS TO
GOOD BUDGETING
 The following are seven steps that may help in attaining
good budgeting.
7 Steps to
01
Set realistic goals. Goals for the money will

Good help make smart spending choices upon

deciding on what is important.
Budgeting
02
ldentify income and expenses. Upon knowing
how much is earned each month and where it
all goes, start tracking the expenses by
recording every single cent.

03
Separate needs from wants. Set clear
priorities and the decisions become easier to
make by identifying wisely those that are really
needed or just wanted.
 04
Design your budget. Make sure to avoid
spending more than what is earned. Balance

7 Steps to budget to accommodate everything needed to

be paid for.
Good
05
Put your plan into action. Match spending
Budgeting with income time. Decide ahead of time what
you will use each payday. Non-reliance to
credit for the living expenses will protect one
from debt.

06
Plan for seasonal expenses. Set money aside
to pay for unplanned expenses so to avoid
going into debt.

07
Look ahead. Having a stable budget can take a
month or two so, ask for help if things are not
getting well.
SPENDING
 SPENDING
If budget goals serve as a financial wish list, a spending
plan is a way to make those wishes a reality. Turn them
into an action plan. The following are practical strategies
in setting and prioritizing budget goals and spending plan:

01
Start by listing your goals. Setting budget goals
requires forecasting and discussing future needs and
dreams with the family.
 SPENDING

02
Divide your goals according to how long it will take to meet each goal
Classify your budget goals into three categories: short-term goals (less than a
year), medium-term goals (one to five years), and long-term goals (more than
five years). Short-term goals are usually the immediate needs and wants;
medium-term goals are things that you and your family want to achieve
during the next five years; and long-term goals extend well into the future,
such as planning for retirement.
 SPENDING
03
Estimate the cost of each goal and find out how much it costs. Before
assigning priority to goals, it is important to determine the cost of each goal.
The greater the cost of a goal, the more alternative goals must be sacrificed in
order to achieve it.

04
Project future cost. For short-term goals, inflation is not a big factor, but for
medium and long-term goals, it is a big factor. To calculate the future cost
of the goals, there is a need to determine the rate of inflation applied to
each particular goal.
 SPENDING

05
Calculate how much you need to set aside each period. Upon knowing the future
cost of the goals, next is to determine how much to put aside each period to meet all
the goals.

06
Prioritize your goals. Upon listing down all the goals and the estimated amount
needed for each goal, prioritize them. This serves as guide in decision-making.

07
Create a schedule for meeting your goals. It is important to lay down all the
goals according' to priority with the corresponding amount of money needed, the
time it wil be needed, and the installments needed to meet the goals.
 INVESTMENT
AND INVESTING
 Investing
As teachers, when you have saved more money than what you expect
at a time of need, consider investing this money to earn more interest
than what your savings account is paying you. There are many ways
you can invest your money but consider four aspects:

01 How long will you invest the money? (Time Horizon)

02 How much money do you expect your investment to earn each year? (Expectation of Return)

How much of your investment are you willing to lose in the short-term in order to earn more in the
03 Investing has never been easier due to digital technology. Many reputable financial
FIND AN APP:
long-term? (Risk Tolerance)
institutions have apps that make it simple to start investing today.

04 What types of investment interest you? (investment Type)

SAVINGS
SAVINGS
In order to get out of debt, it is important to set some
money aside and put it into a savings account on a
regular basis. Savings will also help in buying things
that are needed or wanted without borrowing.

Emergency Savings Fund. Stạrt as early, setting aside

a little money for emergency savings fund. If you
receive a bonus from work, an income tax refund or
earnings from additional or side jobs, use them as an
emergency fund.
10 REASONS WHY
SAVE MONEY
 With credit so easy to get, here are ten practical reasons why it is
important to save money that everyone, including teachers, must
know.

10 Reasons To become financially independent. Financial

Why Save 01 independence Is not having to depend on

receiving a certain pay but setting aside an
amount to have savings that can be relied on.
Money
To save on everything you buy. With savings,
you can buy things when they are on sale and

02 can make better spending choices without

being compromised on credit card interest
charges.

To buy a home or a car. Savings can be used in

03 buying a home in full or down payment,

especially in times of promo deals, bids and
inevitable sale and at a reasonable interest rate.
 With credit so easy to get, here are ten practical reasons why it is
important to save money that everyone, including teachers, must
know.

10 Reasons To prepare for the future. Through savings, you

Why Save 04 can be confident to face the future without

worrying on how you will survive.

Money
05 To get out of debt. If you want to get out of debt,
you have to save money.

To augment annual expenses. In order to attain

06 a good, stress-free financial life, there is a need

to save for annual expenses in advance.

To settle unforeseen expenses. Savings can

07 respond to unforeseen expenses in times of

need.
 With credit so easy to get, here are ten practical reasons why it is
important to save money that everyone, including teachers, must
know.

10 Reasons To respond to emergencies. Emergencies may

happen anytime and these can be expensive so,
Why Save 08 there is a need to get prepared rather than
potentially become another victim of an
Money emergency.

To mitigate losing your job or getting hurt. Bad

things can happen to anyone, such as losing a

09 job, business bankruptcy or crisis, being injured

or becoming too sick to work. Therefore, having
savings is the key to resolve such a dilemma.
To have a good life. Putting aside some money

10 to spend when needed can bring about quality

and worry-free life at all times.
COMMON FINANCIAL
SCAMS TO AVOID
COMMON FINANCIAL SCAMS TO AVOID

01 PHISHING

Using this common tactic, scammers send an

email that appears to come from a financial
institution, such as a bank and asks you to click on
a link to update your account information. If you
receive any correspondence that asks for your
information, never click on the links or provide
account details. Instead, visit the company's
website, find official contact information, and call
them to verify the request.
COMMON FINANCIAL SCAMS TO AVOID

02 SOCIAL MEDIA SCAMS

Scammers an adept at using social media to

gather information about the traveling habits of
potential victims. They also have phishing
tactics, including posts seeking charity
donations with bogus links that allow them to
keep your money. Therefore, be conscious of the
information you post online, especially personal
details and plans for a vacation that you would
leave your house unoccupied.
COMMON FINANCIAL SCAMS TO AVOID

03 PHONE SCAMS
Another prevalent tactic is scamming phone calls.
The scammers pose as a government agency,
such as the Bureau of Internal Revenue or local
law enforcement agencies, and use scare tactics
to acquire your personal information and account
numbers. Never provide your account information
over the phone. Look for the agency's contact
information, and call them to verify any request. To
note, government agencies will never text or call
you to ask for money.
COMMON FINANCIAL SCAMS TO AVOID

04 STOLEN CREDIT CARD NUMBERS

There are numerous ways that scammers can

obtain your credit card information, including
hacking, phishing, and the use of skimming
devices, such as small card readers attached to
unmanned credit card readers (i.e. ATMs, gas
pumps, and more). These small devices pull data
from your card when you swipe it. Before you use
an ATM or swipe your card, look for suspicious
devices that may be attached to the card reader.
COMMON FINANCIAL SCAMS TO AVOID

05 IDENTITY THEFT

Depending on the amount of information a

scammer is able to obtain, identity theft may extend
beyond unauthorized charges on a debit or credit
card. If scammers are able to obtain your Social
Security number, date of birth, and other personal
information, they may be able to open new
accounts in your name without your knowledge. Be
aware of an information you share and with whom,
and always shred sensitive information before
disposing it.
 10 TIPS TO AVOID
COMMON FINANCIAL
SCAMS
 10 Tips to Avoid Common Financial Scams

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).
 Never wire money to a stranger. Although it is
10 Tips to Avoid
Common 01 one of the oldest Internet scams, there are still
consumers who fall for this rip-off or some
Financial Scams variations of it.

Don't give out financial information. Never

02 reveal sensitive personal financial information

to a person or business you don't know, thru
phone, text or email.

Never click on hyperlinks in emails. If you

receive an email from a stranger or company

03 asking you to click on a hyperlink or open an

attachment and then, enter your financial
information, delete the email immediately.
 Use difficult passwords. Hackers can easily find
passwords that are simple number
combinations. Create passwords that are at

10 Tips to Avoid 04 least eight characters long and that include

some lower- and upper-case letters, numbers
Common and special characters. You should also use a

Financial Scams different password for every website you visit.

Never give your social security number. If you

05 receive an email or visit a website that asks for

your Social Security number, ignore it.

Install Antivirus and Spyware protection.

Protect the sensitive information stored on your

06 computer by installing antivirus, firewall and

spyware protection. Once you install the
program, tum on the auto-updating feature to
make sure the software is always up-to-date.
10 Tips to Avoid Don't shop with unfamiliar online retailers.
When it comes to online shopping, only do
Common
Financial Scams 07 business with familiar companies. When
purchasing a product from an unfamiliar
retailer, do some research to ensure the
business is legit and reputable.

Don't download software from pop-up windows.

When you are online, do not trust pop-up
windows that appear and claim your computer

08 is unsafe. If you click on the link in the pop-up to

start the "system scan" or some other programs,
malicious software known as "malware" could
damage your operating system.
10 Tips to Avoid Make sure the websites you visit are safe. Before
you enter your financial information on any
Common website, double-check the website's privacy
Financial Scams 09 rules. Also, make sure the website uses
encryption, which is usually symbolized by a
lock to the left of the web address which means
it is safe and protected against hackers.

Donate to known charities only. If you receive a

call or an email for solicitation of charity

10 donations, critically examine it. Some scammers

create bogus charities to steal credit card
information.
FINANCIAL SCAMS
AMONG STUDENTS
 FINANCIAL SCAMS AMONG
STUDENTS
While it is beneficial for students to apply for as many
scholarships, it is important to become aware of related
scams and frauds. Students should thoroughly check
FAKE SCHOLARSHIPS
scholarship sources before applying to verify legitimacy.
Never apply for a scholarship that asks for money in
return.

There are schools that offer fake degrees and diplomas in

exchange for a fee. Check from government education
DIPLOMA MILLS
agencies the prospective school to enroll in if it is
government-recognized, legitimate or accredited.
 FINANCIAL SCAMS AMONG
STUDENTS
While students often go for the best deals on textbooks
online, scammers can use this opportunity to get students'
ONLINE BOOK SCAMS
credit card information. When buying anything online, be
sure to do it on a credible site.

Oftentimes, credit card companies go to school campuses

to convince students to fill out card applications. Scammers
may also grab this chance to steal students’ information. It is
important to visit a local credit union or bank for credit card
CREDIT CARD SCAMS
application. Also, regularly check the credit card statement
and once there are any unrecognized charges, contact your
banking institution immediately.
INSURANCE AND
TAXES
INSURANCE & TAXES

INSURANCE is a contract (in the form of a policy) between the policyholder and the
insurance company, whereby the company agrees to compensate for any financial loss
from specific insured events. In exchange for the financial protection offered, policyholder
agrees to pay a certain sum of money, known as premiums to the insurance company.
Insurance is the best form of risk management against uncertain loss.

There are various types of insurance to choose from, such as life insurance, health
insurance, motor insurance, property insurance, business insurance, etc. Besides, the
financial protection derived from insurance entails tax benefit claim on the paid
premiums.

The following are concepts related to insurance and taxes that every teacher should
know. However, he/she should carefully analyze and critically examine well before
pursuing any deal with them.
 Employer-Sponsored insurance

If working in a company with 50 or more full-time employees, the employer is

01 required to provide employee-only insurance that meets minimum guidelines.
Examine the plan offered, but do not pay over 9.66 percent of household income
in premiums.

Marketplace Plans

Marketplace plans are available based on an area of residence and income upon
02 meeting minimum coverage requirements. Marketplace plans come in three tiers:
bronze, silver and gold. Generally, bronze plans offer the least coverage at the
lowest premiums, while gold plans provide the most coverage at the highest
price.
 LIFE
INSURANCE
Life insurance is not for the ones who die, but for the ones who live
 What is LIFE INSURANCE?

Life insurance is a type of insurance that compensates

beneficiaries upon the death of the policyholder. The company
will guarantee a payout for the beneficiaries in exchange of
premiums. This compensation is called "death benefit."

Depending on the type of insurance one may have, these

events can be anything from retirement, to major injuries, to
critical illness or even to death.
 The following are common risk categories:

Preferred Plus The policyholder is in excellent health, with normal weight, no history
of smoking, chronic illnesses, or family history of any life-threatening
disease.

Preferred The policyholder is in excellent health but may have minor issues on
cholesterol or blood pressure but under control.

Standard Plus The policyholder is in very good health but some factors, like high
blood pressure or being overweight impede a better rating.
The following are common risk categories:

Standard Most policyholders belong to this category, as they are deemed to be

healthy and have a normal life expectancy although, they may have a
family history of life-threatening diseases or few minor health issues.

Those with serious health issues, like diabetes or heart disease are
Substandard placed on a table rating system, ranked from highest to lowest. On
average, the premiums will be similar to Standard with an additional
25% lower claim on table ratings.

Smoker Due to the added risk of smoking, policyholders in this category are
guaranteed to pay more. Aside from health class, age is also a critical
factor in determining premiums, and therefore, older people pay more
expensive premiums.
Benefits of
It pays for medical and funeral costs: Life insurance

Life 01 helps solve the incurred expenses for medical and

funeral services to lessen the grief among family and
relatives for being unprepared.

Insurance
02
For financial support: Life insurance can become a
source of temporary income during the difficult
period of adjusting and coping with the loss of a
loved one, especially if he/she is the breadwinner.

For funding various financial goals: Life insurance

03 offers additional benefits through the form of fund

accumulation for specific future financial goals.
Benefits of
Acts as a retirement secured comfort: Modern life

Life 04 insurance also serves as a tool that principal holders

can use to get in a better financial position in the
future.

Insurance
05
It covers costs incurred from taxes and debt: Life
insurance can serve as protection since the premium
can be used to pay for unsettled debts and taxes.

For funding various financial goals: Life insurance

03 offers additional benefits through the form of fund

accumulation for specific future financial goals.
Resources