Maam Roz Educ

Would You
Rather?
Finance Edition
Would you
Rather?
Have Lunch box Eat at Cafeteria
Would you Rather?
Earn Single Penny 1 Million Today
CHAPTER 4
FINANCIAL Y
literacy
Reporters: Shaine O. Juego
Sheryl T. Amoguis
REMEMBER:
The National Endowment for Financial Education defines financial literacy as "the
ability to read, analyze, manage, and communicate about the personal financial
conditions that affect material well-being. It includes the ability to discem financial
choices, discuss money and financial issues without for despite) discomfort, plan for
the future, and respond competently to life events that affect every day financial
decisions, including events in the general economy" (Incharge Education Foundation,
2017).
STANDARDS
PRESENTATI
Earning Income
The Council for Economic Education,
the leading organization in the United
States that focuses on the economic Buying Goods and Services
and financial education of students
from Kindergarten through high
Saving
school developed six standards
gearing toward deepening students'
understanding of personal finance l
Using Credit
through an economic perspective.
Financial Investing
Protecting and Insuring

Earning Income
• income earned or received by people
• different types of jobs as well as different forms of

income earned or received
• benefits and costs of increasing income through the

acquisition of education and skills
• government programs that affect income types of

income and taxes
• labor market
Buying Goods and
Services
• scarcity, choice, and opportunity cost
• factors that influence spending choices such as advertising, peer pressure, and
spending choices of others
• comparing the costs decisions

• basics of budgeting and planning making a spending decision
• payment methods, costs, and benefits of each

• budgeting and classification of expenses
• satisfaction determinants of demand costs of information search, choice of

product durability
• the role of government and other institutions in providing information for
consumers
Savings
• concept of saving and interest
• how people save money, where people can
save money, and why people save money
• the role that financial institutions play as
intermediaries
between savers and borrowers
• saving for retirement
Using Credit
•concept of credit and the cost of using
credit
• why people use credit and the sources
of credit
• why interest rates vary across
borrowers
Financial Investing
•concept of financial investment
•variety of possible financial
investments
•calculate rates of return
relevance and calculation of real
and after-tax rates of return
Protecting and Insuring
concepts of financial risk and loss .
Insurance (transfer of risk through risk

pooling)
managing risk
Identity theft
life insurance products how to protect oneself

against identity theft
TH E EN E F I T O F
Benefits of financial
F I N A N C literacy I R A
IC Y
One's level of financial literacy affects one's quality of the
significantly determines one's ability to provide basic needs attitude
toward money and vestment, as well as one's contribution to the
community.
Most of the responsibility for managing financial matters rests with
the individual. That responsibility is easier for adults to bear when
they have eamed the basics of personal finance in their youth
World Bank study in 2014 estimated 20 million
Filipinos saved money but only half had bank
accounts,
As per Standard & Poor's (S&P) Ratings services

survey last year, only 25% of Filipinas are financially
literate.
The World Bank found that only 25.0 percent of adult
Filipinos are knowledgeable on basic financial
concepts.
This means that about 75 million Filipinos have no

idea about inflation, risk diversification,
insurance,compound interest, and bank savings.
.
Developing Personal
Financial Literacy
One's attitude about money is
heavily influenced by the parents'
attitude and behavior about money.
The attitudes you formed early in
life probably affect how you save,
spend, and invest today. Do you
behave similarly or differently from
your parents about handling
money?
There are six major FRUGAL PLEASURE STATUS
characteristic types in
how people view
money incharge,
2017).
POWERFUL
INDIFFERENCE SELF-WORTH
Which characteristic closely resembles your attitude about money?

S P SI N G
SPENDING PATTERN N
P A T TE R
Individuals have different spending
patterns. Before one can come up
with a financial improvement plan,
one needs to analyze his/her spending
habits.
There are two common spending patterns:
habitual spending and impulsive spending
Fixed vs. Variable Expenses
Variable expenses occur regularly but

the amount you pay varies. Electric and
Fixed expenses remain the same year-
round. Car payment is an example. gas
bills are examples of these
Needs vs
Wants
Setting Financial Goals
Setting financial goals is the

first step to managing one's
financial life, Goos may be
short, medium, and long-term.
Developing a
Spending Plan
Time and effort are necessary to build a sustainable spending
plan. Three easy steps are proposed below when developing
your personal spending plan
1. Record
2. Review
3. Take action
Importance of Saving
Because no one can predict the future with certainty,

we need to save money for anything that might
happen. Here are some reasons why saving is
important:
• Emergency Bolster
• Retirement
• Future Events
•Instability of Social Security

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Would You

Protecting and Insuring

• different types of jobs as well as different forms of

• benefits and costs of increasing income through the

• government programs that affect income types of

• comparing the costs decisions

• payment methods, costs, and benefits of each

• satisfaction determinants of demand costs of information search, choice of

Insurance (transfer of risk through risk

life insurance products how to protect oneself

As per Standard & Poor's (S&P) Ratings services

This means that about 75 million Filipinos have no

Which characteristic closely resembles your attitude about money?

Variable expenses occur regularly but

Setting financial goals is the

Because no one can predict the future with certainty,

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