BUILDING AND ENHANCING LITERACIES ACROSS THE

CURRICULUM

WRITTEN REPORT ABOUT

FINANCIAL
LITERACY

Submitted by:

Fernandez, Mark D.
Eman, John Lloyd
Gacot, Renalyn
Garbida, Rina
Grana, Nikka
Definitions of Financial Literacy
 It is the knowledge and understanding of different financial concepts and skill to the
management of money, savings, and credit and investment and retirement
 The ability to understand how one person manages to earn, make effective decisions
regarding disposition over earnings and to improve is well being
 People’s ability to process economics, information and make decisions about financial
planning, wealth accumulation, debt and pension

Insights about Financial Literacy

 An important element for economic and financial stability and development – we live
in a complex financial world where everything has a price tag. Everything we see has
it’s own value , therefore we should know how to survive the challenges with regards
to money
 A key to life skill – just like reading and writing , being money smart is a must.
Today, we do not only see the world in letters but mostly in numbers everything has
a price and we must be smart in spending our money
 Important for individuals to make sound decisions – it said that financially literate
people are good decision makers.
Advantages of Being Financially Literate
 Those who are financially literate are more likely to accumulate wealth
 Financially Literate consumers can make more informed decisions and demand
higher quality services
 They encourage innovation in the market
 People with financial literacy skills are better to manage their money, participate in
the stock market, and more likely to invest

Reports on the Financial Literacy of the Filipino

 IN A FINANCIAL capability survey implemented by the World Bank in 2014 as part of
a broader engagement on enhancing financial consumer protection and financial
education in the Philippines, a sample of 3,000 adults were asked to answer seven
questions dealing with basic calculus and financial concepts (simple interest rates,
inflation, compound interest, risk diversification and the main purpose of insurance
products) to gauge their financial knowledge and basic numeracy skills.

The results were dismaying. On average, the respondents were able to answer only
3.2 out of the seven financial literacy questions correctly. And 10% of them got six
questions right, and only 2% managed to get a perfect score.

“A more worrisome finding is that around a fifth of the surveyed population did not
answer more than one question correctly, while still a significant proportion of
respondents, one out of 10 adult Filipinos, did not appear to have a sound grasp of
any of the basic concepts being tested,” The World Bank said in “Enhancing
 Financial Capability and Inclusion in the Philippines — A Demand-side Assessment,”
which was released in 2015.

Filipino adults also performed poorly in the 2014 Global Financial Literacy Survey by
Standard & Poor’s Ratings Services, in which several questions measuring four
fundamental concepts for financial decision making — basic numeracy, interest
compounding, inflation and risk diversification — were posed to more than 150,000
respondents in 140 countries.

To be deemed financially literate, the respondents needed to correctly answer “at

least three out of the four financial concepts.” The survey found that only 25% of
adult respondents in the Philippines were financially literate, a figure lower than the
global average of 33%.

It’s evident from these surveys that the financial literacy of the Filipinos is lacking,
and it should be a cause for great concern. “Financial literacy is a necessary life skill.
The simplest human activity requires financing and life brings with it various risks.
At the individual level, financial literacy, and its eventual translation into financial
capability, enables us to save, prepare for the future, and manage economic/financial
shocks
 Based on the Philippine Financial Literacy Advocacy 2013 report, Filipinos have good
knowledge of the healthy budget and inflation Their study shows that 49% of the
Filipinos put money bank accounts every month, and many of those who do so save
only 6% much below of the suggested minimum of 10%

How do I manage my finances?

1. Set your financial goals –
• Tukuyin kung ano ang mas mahalaga sa pang short-, medium- and long-term
na financial goals.
• Alamin humigit kumulang kung magkano ang kailangang ipunin para
makamit ang goals.
2. Knowing your real needs and wants –
Sa pag-address ng ating ‘financial situation’ ay dapat rin nating malaman ang
kaibahan ng needs and wants. Sa pag-alam nito, maaring hindi na pala natin
namamalayan na tayo pala ay “OVERSPENDER”. Ito ay magiging isang eye-opening
experience sa atin.

Needs – ay mga bagay na mahalaga na ginagamit natin sa pang-araw araw na buhay

at pagwala ang isa sa mga ito o kulang ay malaki ang epekto nito sa ating
pamumuhay. Ang halimbawa nito ay basic needs tulad ng food, water, shelter,
clothes.

Wants – ay ang mga bagay na kaya nating mabuhay kahit wala ang mga ito. Ito ang
mga bagay na maaring makakapagpasaya sa atin o maaring makatulong sa atin
 upang mas magkaroon ng komportableng buhay. Halimbawa ng wants ay designer
clothes, going to movies, pagbili ng mga gadgets na mamahalin.

3. Know your net worth –

Sa kaalamang pinansyal mahalaga na malaman natin ang ating net worth. Sa pamamagitan
nito ay malamanan natin kung gaano tayo kalayo sa ating ‘financial goals’.

Paano natin malalaman ang ating net worth? Ito ay madali lamang. Ating alamin kung ano ang
ating mga pagmamay-ari (assets), at ang ating mga kailangang bayaran o obligasyon (liabilities).

FORMULA:

(Total Assets – Total Liabilities = Net Worth)

Simple Key Terms:

Assets: Ito ang mga bagay na ating pagmamay-ari na may halaga.Halimbawa nito ay salapi o
pera, bahay, kotse…

Liabilities: Ito ang mga bagay na ating pananagutan o obligasyon na kailangan nating
bayaran tulad ng bills, credit cards, loans…

Net Worth:Ito ay ang halagang maiiwan kungbabayaran ang mga obligasyon (liabilities)
mula sa ating mga assets…

4. Control your spending habits –

Ano ba ang cash flow?

Ito ay ang paggalaw ng salapi o pera. Ito ang indikasyon kung nagagamit ba natin ng maayos
ang ating pera.

Simple Key Terms:

Cash inflow: Perang natatanggap – sweldo o sahod, kita sa negosyo, allowance, etc.

Cash outflow: Mga pinagkakagastusan – pagkain, pamasahe, cellphone, bayad sa bills, etc.

Karamihan ng tao ay may utang, ngunit hindi ito magiging problema kung marunong
tayo mamahala nito.

5. Manage your debt –

Kategorya o uri ng utang o debt/loan:

Unsecured Loan – Ang nagpapautang ay hindi naghihingi ng anomang kolateral

(collateral) ngunit ang mga ito ay may mataas na interest rate. Ang collateral ay pag-
aari o asset na maaaring kunin ng nagpapautang sa pagkakataong hindi na
makapagbayad ang nangungutang. Halimbawa ng uri ng debt na ito ay angcredit
card. Ito ay may credit limit at kailangan itong bayaran monthly depende sa nahiram
mo sa buong buwan. Kung ito ay nabayaran ng buo ay wala itong interest. Ngunit
kung minimum fee lang o hindi ito nabayaran sa tamang panahon ay magkakaroon
 ito ng interes. Bagamat wala itong kolateral, maari ka namang kasuhan nito kung
ikaw ay di nakakapagbayad ng wasto at mas lalong lumalaki ang interes nito sa
buwat buwan na lumilipas na hindi nababayaran ng buo kung walang sapat na
kaalaman dito.

Secured Loan – Dito naman ay kinakailangan ng lender o nagpapautang ang

kolateral mula sa nais manghiram ng pera. Ito ay para ma-secure o makasiguro ang
nagpahiram. Kung ang utang ay hindi nabayaran ng wasto, mayroon silang
kasunduan na maaring angkinin ang anomang ginawang kolateral at magiging
pagmamay-ari na ito ng lender.

Mas mababa ang interes nito kumpara sa unsecured debt dahil may kolateral sila na
maari nilang panghawakan. Ang halimbawa nito ay car o auto loan.Kung ikaw ay
nanghiram sa bangko para sa isang car loan, maari nila itong bawiin kung ikaw ay
hindi nakakapagbayad ng tama.
Prioritizing Your loans –
a. Pay off the most expensive debt first (credit cards)
b. Pay more than the minimum balance. Pay in full if possible.
c. Halt your credit card spending
d. Put work bonuses toward debt
e. Stop creating new debts
f. Make extra money on the side
g. Change your habits. Again, prioritize needs over wants.

Ang mga kaalamang pinansyal na natalakay sa itaas ay naglalayong magkaroon tayo ng ipon o
savings na magagamit natin sa mga emergency situations at sa buhay sa hinaharap. Ayon sa
80-20 rule, 20% ng ating kinikita ay dapat mapunta sa savings. Kung kaya ay maaaring mas
higit pa sa 20%.

6. Savings –

Ang mga kaalamang pinansyal na natalakay sa itaas ay naglalayong magkaroon tayo ng ipon o
savings na magagamit natin sa mga emergency situations at sa buhay sa hinaharap. Ayon sa
80-20 rule, 20% ng ating kinikita ay dapat mapunta sa savings. Kung kaya ay maaaring mas
higit pa sa 20%.

7. Budget –

Ang paggawa ng budget ay isa sa pinakamahalagang step upang maiwasto ang paggamit ng
ating pera. Malalaman natin kung saan mapupunta ang ating pera kahit gaano man kaliit ito.
Ang pagbubugdget ay maaring gawing daily, weekly, monthly o yearly. Karamihan ay gumagawa
ng weekly or monthly budgets.

What is budget?

A budget is a financial plan that takes income and expenses into account and provides
estimates for how much you make and spend over a given period of time.
Reported and Submitted By: Mark D. Fernandez
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