SENIOR HIGH SCHOOL

BUSINESS FINANCE
Quarter 4 – Module 4:
Managing Personal Finance

REGION VI – WESTERN VISAYAS

Business Finance – Grade 12
Alternative Delivery Mode
Quarter 4 – Module 4: Managing Personal Finance
First Edition, 2021

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Published by the Department of Education

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Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Writer: Louell E. Bodios, Maricris C. Cancino and Mara Ellyn H. Lacson
Editor/Reviewer: Ma. Teresa F. Mijares
Layout Artist: Louell E. Bodios
Division Management Team:
Ma
Marsette D. Sabbaluca, CESO VI
Lynee A. Peňaflor, PhD., ASDS
Ly
Salvacion J. Senayo, OIC-ASDS
Sa
Zaldy H. Reliquias, PhD., Chief-CID
Raulito D. Dinaga, EPS-LRMS
Ra
Ma. Teresa F. Mijares, EPS-Math
Othelo M. Beating, PDO-II-LRMS

Regional Management Team

Ramir B. Uytico, Ed.D, CESO IV, Regional Director
Pedro T. Escabante Jr., PhD, CESO V, Asst. Regional Director
Dr. Elena P. Gonzaga, Regional Chief-CLMD
Donald T. Genine, EPS-LRMS
Rhodalyn G. Delcano-EPS-Math

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 SENIOR HIGH SCHOOL

BUSINESS FINANCE
Quarter 4 – Module 4:
Managing Personal Finance
Introductory Message
For the facilitator:

Welcome to the Business Finance Alternative Delivery Mode (ADM) Module on Managing
Personal Finance!

This module was collaboratively designed, developed and reviewed by educators both from
public institutions to assist you, the teacher or facilitator in helping the learners meet the
standards set by the K to 12 Curriculum while overcoming their personal, social, and economic
constraints in schooling.

This learning resource hopes to engage the learners into guided and independent learning
activities at their own pace and time. Furthermore, this also aims to help learners acquire the
needed 21st century skills while taking into consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of the module:

Notes to the Teacher

This contains helpful tips or strategies that will
help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this module. You also
need to keep track of the learners' progress while allowing them to manage their own learning.
Furthermore, you are expected to encourage and assist the learners as they do the tasks
included in the module.
For the learner:

Welcome to the Business Finance Alternative Delivery Mode (ADM) Module on Managing
Personal Finance!

This module was designed to provide you with fun and meaningful opportunities for guided
and independent learning at your own pace and time. You will be enabled to process the
contents of the learning resource while being an active learner.

This module has the following parts and corresponding icons:

This will give you an idea of the skills or

What I Need to Know
competencies you are expected to learn in the
module.
This part includes an activity that aims to check
What I Know what you already know about the lesson to take. If
you get all the answers correct (100%), you may
decide to skip this module.
This is a brief drill or review to help you link the
What’s In
current lesson with the previous one.

In this portion, the new lesson will be introduced to

What’s New
you in various ways; a story, a song, a poem, a
problem opener, an activity or a situation.
This section provides a brief discussion of the
What Is It
lesson. This aims to help you discover and
understand new concepts and skills.
This comprises activities for independent practice
What’s More to solidify your understanding and skills of the
topic. You may check the answers to the exercises
using the Answer Key at the end of the module.
This includes questions or blank
What I Have Learned
sentence/paragraph to be filled in to process what
you learned from the lesson.
This section provides an activity which will help
What Can I Do
you transfer your new knowledge or skill into real
life situations or concerns.
This is a task which aims to evaluate your level of
Assessment
mastery in achieving the learning competency.

In this portion, another activity will be given to you

Additional Activities
to enrich your knowledge or skill of the lesson
learned.

Answer Key This contains answers to all activities in the

module.
At the end of this module you will also find:

References This is a list of all sources used in developing this

module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the module.
Use a separate sheet of paper in performing the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities included
in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not hesitate to
consult your teacher or facilitator. Always bear in mind that you are not alone.
We hope that through this material, you will experience meaningful learning and gain deep
understanding of the relevant competencies. You can do it!
 What I Need to Know

This module was designed and written with you in mind. It is here to help you the basics of
finance. The scope of this module permits it to be used in many different learning situations.
The language used recognizes the diverse vocabulary level of students. The lessons are
arranged to follow the standard sequence of the course. But the order in which you read them
can be changed to correspond with the textbook you are now using.

The module has only two lessons, namely:

• Lesson 1 illustrating the money management cycle and gives examples of sound
practices in earning, spending, saving, and investing money

After going through this module, you are expected to:

1. Illustrate the money management cycle and gives examples of sound practices in
earning, spending, saving, and investing money. (ABM_BF12-IVo-p-27)
 What I Know

True/False: The following True or False questions are for you to answer. Write True if
the statement is Correct. And False if otherwise. Use a separate answer sheet.

1. The objective of personal finance is similar to that of the corporate or business finance.
2. People with low income have more difficulty managing money than people with high
incomes.
3. The first step in personal finance planning is setting personal goals and objectives.
4. Personal financial statements, such as the income statement and balance sheet, are
just a lot of busywork and have more value for the person with a lot of money.
5. The best investments are a house and a savings account, which are all that everybody
really needs.
6. A good financial plan will prevent anyone from enjoying life.
7. Planning to have a house is an example of intangible goal.
8. Opportunity costs refer to what a person gives up when making a decision.
9. Most decisions have only a few alternatives from which to choose.
10. Personal saving, spending, and investing activities are interrelated.

Illustrating the Money

Lesson Management Cycle and

1
Gives Examples of Sound
Practices in Earning,
Spending, Saving, and
Investing Money
This module will help you will learn how to illustrate the money management cycle and gives
examples of sound practices in earning, spending, saving, and investing money. So, ready
your working space and counters to make this lesson more meaningful. Let us begin!
 What’s In

Compute for your daily allowance from parents less daily expenses.

Questions:

1. How much they spend every day?

2. What do they spend it for?
3. How much is their daily allowance from parents?
4. Are they able to save from their allowance?
• If yes, what do you do with your savings? Which investments can they put their
savings into?
• If no, how do you address the deficit? Do you ask from your parents? Is this a good
practice?

What’s New

The story of Pinoy celebrities who suffered financial difficulty.

PINOY CELEBRITIES – Here are some of the famous Pinoy celebrities who suffered financial
problems despite their popularity.

The world is definitely round literally and figuratively. No one can ever tell what would happen
to someone if one would simply base it on their current status. Just like these celebrities below
who reached the top of their success in showbiz but still suffered a financial problem.

Bb Gandanghari
He is previously known as Rustom Padilla until he came out during his stay in the reality
show Pinoy Big Brother. He is an Uber driver in the United States as he is pursuing his
Hollywood career.

Mystica
She is known for her daring performances but she recently called out Coco Martin to help her
through a role in Ang Probinsyano. Accordingly, her savings went to zero for the treatment of
her only child who got liver cancer. But unfortunately, her son passed away.

Luisito Espinosa
Former boxing star Luisito Espinosa’s money was spent on his divorce and after retiring in the
sports due to reported promotional issues. He now works as a trainer in China.
Patricia Javier
Previously, she together with husband Dr. Robert Walcher struggled financially when they
transferred to the Philippines. But they got to find ways and recovered from their struggling
life. The actress’ husband has now a successful Chiropractic Clinic.

Ciara Sotto
She is a member of the wealthy Sotto clan. But driven by her burning desire to make something
by her own, she went to the United States and tested her fate. She previously admitted of
working there as a go-go dancer to earn money but now doing well with her son Vicenzo.

Nora Aunor
According to showbiz insider, Nora Aunor, one of the soon-to-be proclaimed Philippine
National Artist, lost a huge percentage of her earnings when she produced movies in the 70’s.
there are also reports that the superstar encountered a lot of financial woes during her long
stay in the US and before her comeback.

These people have successfully reached career peaks accompanied by huge fortune.
However, because of poor personal financial planning, they still went broke due to
overspending practices and lack of appropriate investments.

Do you want to be like these celebrities?

What Is It
?

Personal finance includes all financial decisions and activities of an individual including
budgeting, insurance, mortgage planning, savings, and retirement planning. It involves
analyzing current financial positions, projecting short-term and long-term funding needs, and
executing a plan to fulfil those needs considering individual financial constraints. It is primarily
dependent on one’s earnings, cost of living, and personal goals and wants.
Who of them has done or does personal budgeting? How did/do they do it? What are their
personal goals and wants at their age? Do they have the financial capacity to fulfil them?
Money Management Cycle
Money is the most important thing to have and is said to be the root of all evils. It is being
looked at differently by people around us anywhere and anytime. To some people, money
means security while to others, money is power or self-sufficiency. Regardless of what money
means to anyone, everyone has fall into a “money cycle” as follows:
Cycle 1: Earn/Spend/Earn/Spend. This cycle is for individuals who are living and dependent
only from the amount to be received every pay day. After receiving the amount of salary every
payday, it will be spent, and if not enough, earn some more, and spend it again. There is no
way to get out of the cycle as they don’t understand and implement the basics of money
management.
Cycle 2: Earn/Spend/Borrow/Spend. This cycle is for individuals who have intricacy of living
beyond their means due to difficulty of denying themselves with anything. These individuals
are easily confused with “wants” and “needs” because they are convinced, they deserve
whatever they want and feel and so they deserve it now. Basically, they earn money, spend
all of that, then borrow more money and spend that. As a result, they rely on credit to establish
and maintain the standard of living they feel they are entitled to or deserve.
Cycle 3: Earn/Spend/Save. This cycle is for the group who believes in saving money. One of
their philosophies is that they will and save everything after they have taken care of their wants
and needs. However, most of the time, the money is just enough for their basic necessities
and nothing is left for savings. As a result, there’s rarely enough money to go around. Rarely
can this group get ahead and gets frustrated easily because they know saving is important but
don’t know how to save.
Cycle 4: Earn/Save/Spend. This cycle is for the group who understands the importance of
savings. They know the basic rule of financial security: they have arranged their priorities to
put saving first. This group earns money, saves some immediately, and budgets or spends
what is left. Saving is a priority because they understand its role in meeting short-and long-
term goals and creating financial stability. This group is also the best at budgeting. They know
what they need to live on, adjust their lifestyle when necessary and have goals to work for.
They focus on getting out of debt or carrying minimum monthly obligations.
Sound Practices in Earning, saving, Spending and Investing Money
1. Earning Money

Money will not just fallout from the sky like rain when needed. To have money, there
is a need to look for a job and work for the money. Money is earned which is also called
income when employed in a certain job. “Income” basically means receiving money for
doing a paid work during the day, week or month.
Payment for jobs can occur in different ways, depending on the agreed working
conditions for the type of job. These types of payment can either be:

1.1 Wages. Payment by wages involves a fixed hourly rate of pay for a standard set
number of hours. The excess hours worked beyond this set number of hours are
considered overtime and paid additional premium of 25% of the daily rate. Wages
are also often paid for Factory Jobs (Assembly Line Worker, Fork Lift Driver, etc.)
1.2 Piece of Work. Payment of work for this type is based for each item produced or
processed, rather than for the number of hours worked. Types of jobs paid by
“Piece Work” are in manufacturing (dress maker, furniture maker, fruit and
vegetable picker, footwear maker, hand bag or hat maker, dog groomer, dog
walker, etc.)
Couriers. Taxi and truck drivers can also be considered paid by “Piece Work” based
on how many items/person delivered or transported.
1.3 Salary. Payment of work for this type involves weekly, semi-monthly, monthly, or
per annum. Workers who are often required to work overtime, are paid overtime
pay except those in flexible terms which are mostly not paid. Instead the time can
be offset against their tardiness or absences which are mostly accorded to
supervisory employees. Ordinarily, payment of salary is often to regular or monthly.
1.4 Commission. Payment of work is paid a small “retainer” or “flat fee” plus either a
percentage of the amount of the sales generated jobs which are being paid by
commission are usually sales jobs such as Real Estate, Car Sales, Sales Reps for
Drug Manufacturing companies, Book Sellers, Mortgage Brokers, and Insurance
Consultants.
2. Saving Money

Saving is a voluntary act and it doesn’t happen by accident; it involves active work
towards it. It is not easy to meet savings goals and it requires a lot of determination.
An example of savings tips that can be implemented are as follows:

2.1 Arrange for an Automatic Saving.

With the technology nowadays, an automatic arrangement with the employer’s
bank for savings deposit at a fixed amount each payday. Any amount will add up
faster without noticing it.

2.2 Separate Savings Account

A separate savings account with a different from the primary checking account will
help in avoiding buying unnecessary things. This will limit access or knowing how
much money is in the savings account that keeps away to impulse buying.

2.3 Create Separate Bank Accounts

Create separate bank accounts for various savings goals. An excellent example
includes setting aside a “Vacation Savings Account,” or a “New Car Savings
Account.” If there is a different savings account associated with a particular
financial goal, it becomes easier to measure its progress and stay motivated.

2.4 Save Your Loose Change

Keep loose change in an empty jar or used coffee can is a good start of saving
money though it seemed outdated. However, this action will provide an excellent
way to have emergency funds on hand. In addition, when the jar gets full, the
amount can be deposited in a savings account.

2.5 Avoid Overdraft and Bounced Check Fees.

Fees for bounced checks and over-draft account which are exorbitant can be
avoided by not issuing a check without sufficient bank balance. The money that
can be saved on these fees is better spent for productive purposes which is a
sound money practice.

3. Spending

Some anxiety about spending money comes simply from not being sure of what’s
coming in and what’s going out. In most cases, spending money can be difficult to stop,
but with the right approach, it’s possible that money to spend can be saved instead.

3.1 Pay in Cash.

Debit or credit card should not be used for daily expenses. This will limit the
spending as expenses will be paid in cash. Taking out cash each payday can be
considered an allowance which can be used for cash expenses. This method will
lead to an excellent way of living within available means.

3.2 Tracking of Expenses.

Tracking of Expenses by keeping every receipt will give information about where
the money goes every month. It will be surprising to know that there are expenses
which are too much and unwanted. Knowledge about this will lead to an
improvement of spending habit and savings at the end.
 3.3 Avoid Impulse Purchases.
Supermarkets provide big carts instead of basket only to encourage shoppers to
fill in with goodies which may not be necessary or excessive. This is one of the
strategies of stores to motivate shoppers to buy more. Another way of luring
shoppers to impulsive purchases is the arrangement of items for sale. Ordinarily
the necessities or staple purchases, like milk and eggs, are in the back of the store.
Each shopper will have to pass the inner aisles that contain items which are new
and/or promotional items.

3.4 Payment of Credit Card Bills on Time.

Possession of a credit card is a privilege, not a right. This is supposedly granted to
those who demonstrate responsible spending and saving practices. This is not
entrusted to persons who don’t pay the bills or otherwise have poor financial
management practices. Non payment of credit card bill on time, will add more costs
through fees or charges which can easily be saved for productive purposes.

4. Investing

Investing money is not only for those who enjoy financial freedom. Starting investing
money at a very young age will end up getting more money because of compounding
rates of return. These are some ways to start investing money, as follows:

4.1 Speak to someone knowledgeable about money investments. There are lots
of investment opportunities which can only be known by asking the expert or that
experienced investors. There is a need to understand the pros and cons of any
investment before venturing into it.

4.2 Familiarity of the investment opportunities will lead to a fruitful undertaking.

Investing money to shares of stock of a well-known company is better than shares
of stock a company which is never heard.

4.3 Diversification of Investment. It is not good to put all the eggs in one basket as
it will lead to a bankruptcy in case of any eventualities. Managing investment
portfolio will be given more security and better results than keeping money in a
bank. There are lots of investment instruments, like mutual funds, shares of stock,
bonds, marketable securities, etc., which provide higher return. But it is also worth
mentioning to consider risk or return trade off in making investment.

What’s More

Using one or more Money Management Cycle, illustrate through an collage and with
corresponding title showing how you practice and your attitude towards earning, spending,
saving, and investing money.
 What I Have Learned

The Money Management Cycle

Money is the most important thing to have and is said to be the root of all evils. It is being
looked at differently by people around us anywhere and anytime. To some people, money
means security while to others, money is power or self-sufficiency. Regardless of what money
means to anyone, everyone has fall into a “money cycle” as follows:
Cycle 1: Earn/Spend/Earn/Spend.
Cycle 2: Earn/Spend/Borrow/Spend.
Cycle 3: Earn/Spend/Save.
Cycle 4: Earn/Save/Spend.

Sound Practices in Earning, Saving, Spending and Investing Money

1. Earning Money
Money will not just fall out from the sky like rain when needed. To have money, there
is a need to look for a job and work for the money. Money is earned which is also called
income when employed in a certain job. “Income” basically means receiving money for
doing a paid work during the day, week or month. Payment for jobs can occur in
different ways, depending on the agreed working conditions for the type of job. These
types of payment can either be:
1.1 Wages.
1.2 Piece of Work.
1.3 Salary.
1.4 Commission.

2. Saving Money

Saving is a voluntary act and it doesn’t happen by accident; it involves active work
towards it. It is not easy to meet savings goals and it requires a lot of determination.
An example of savings tips that can be implemented are as follows:

• Arrange for an Automatic Savings

• Separate Savings Account
• Create Separate Bank Accounts
• Save Your Loose Change
• Avoid Overdraft and Bounced Check Fees.

3. Spending

Some anxiety about spending money comes simply from not being sure of what’s
coming in and what’s going out. In most cases, spending money can be difficult to stop,
but with the right approach, it’s possible that money to spend can be saved instead.
 3.1 Pay in Cash.
3.2 Tracking of Expenses.
3.3 Avoid Impulse Purchases.
3.4 Payment of Credit Card Bills on Time.

4. Investing

Investing money is not only for those who enjoy financial freedom. Starting investing
money at a very young age will end up getting more money because of compounding
rates of return. These are some ways to start investing money, as follows:

4.1 Speak to someone knowledgeable about money investments.

4.2 Familiarity of the investment opportunities will lead to a fruitful undertaking.
4.3 Diversification of Investment. It is not good to put all the eggs in one basket as it
will lead to a bankruptcy in case of any eventualities.

1.
What Can I Do

Prepare your own budgeted sources and uses of fund statement for succeeding week. Do
the following procedure then answer the questions:
1 Identify your own sources of fund, mainly allowances coming from your parents.
2 List down all necessary expenditures, mostly school-related.
3 Determine if you have excess fund available for savings and investment.

Questions:
1. Where will you put the excess funds? Will you allot some of the excess to purchase
some “wants” such as gadgets, comic books, or movie tickets?
2. If the sources are not enough to cover for your expenditures, where do you get
additional financing?

Assessment

Modified True/False: The following True or False questions are for you to answer. Write
True if the statement is Correct. If it is not, write False and state your reason.

1. The objective of personal finance is similar to that of the corporate or business

finance.
2. People with low income have more difficulty managing money than people with high
incomes.
3. The first step in personal finance planning is setting personal goals and objectives.
4. Personal financial statements, such as the income statement and balance sheet,
are just a lot of busywork and have more value for the person with a lot of money.
 5. The best investments are a house and a savings account, which are all that
everybody really needs.
6. A good financial plan will prevent anyone from enjoying life.
7. Planning to have a house is an example of intangible goal.
8. Opportunity costs refer to what a person gives up when making a decision.
9. Most decisions have only a few alternatives from which to choose.
10. Personal saving, spending, and investing activities are interrelated.

Additional Activities

Ask the four individuals to prepare their own personal balance sheet and personal
sources and uses of funds statement.

1 Make them list down their assets, liabilities and net worth as of the latest year-end
(December 31)
2 Compare their net worth. Which one has the highest net worth? Lowest?
3 Identify the main sources of funds (income sources) and then list down their living
expenditures for the year just ended (January 1 to December of the latest calendar year).
4 Are their sources of funds enough to cover for their living expenditures? Which individual
is most likely to experience financial difficulties?

References

Book References:

• Business Finance for Senior High School, De Guzman, A.A., (2019), Lorimar
Publishing, Inc.
• Business Finance in the Philippine Setting for Senior High School, Aduana, N.L.,
(2017), C&E Publishing, Inc.
What’s More
1. Students answer may vary.
https://www.scribd.com/document/357275753/Collage-Rubric
What’s New What’s In What I Know
Yes/ No Students answer may
vary. 1. True
2. True
3. True
Answers may vary 4. False
5. False
6. False
7. False
8. True
9. True
10. True
Answer Key
 Additional Activities
Answers may vary
Assessment
1. True
2. True
3. True
4. False- Personal financial statements, such as the income statement and
balance sheet, are for public utilization.
5. False- The best investments is land and emergency savings fund.
6. False- it will guide and measure finances.
7. False- tangible goal
8. True
9. True
10. True
What Can I Do
Students answer may
vary.
For inquiries or feedback, please write or call:

Department of Education - Bureau of Learning Resources (DepEd-BLR)

Ground Floor, Bonifacio Bldg., DepEd Complex

Meralco Avenue, Pasig City, Philippines 1600

Telefax: (632) 8634-1072; 8634-1054; 8631-4985

Email Address: blr.lrqad@deped.gov.ph * blr.lrpd@deped.gov.ph