Module 4

Financial Literacy

PRETEST

1. Define financial literacy

- Financial literacy is the ability to understand and effectively use various financial
skills, including personal financial management, budgeting, and investing. The
meaning of financial literacy is the foundation of your relationship with money, and
it is a lifelong journey of learning. The earlier you start, the better off you will be
because education is the key to success when it comes to money.

2. Do you think you are financially literate? Why or why not?

- For me, as a father, I know that I’m financially literate because I need to be wiser
when it comes to financial matter and set aside saving for emergencies. I understand
the concepts such as loans, credit cards, and debt. I have plans for my family and I’m
setting a goals and making plans to achieve these goals.

3. As young as you, why do you need to develop personal financial literacy?

- A lack of proper knowledge and information about money is dangerous for young
person. I’m already 31 years old and I have already knowledge about the value of
money and how to use it in appropriate way. For young person, education about
money should be given the same priority as other disciplines. Young people need to
be empowered about money and how it works. They need to develop their personal
financial literacy it is because it can also help to prepare them for emergencies. They
will know how to save, invest, budget and manage debts.
 POST TEST

Read the following questions and instructions carefully. Write your answer on the space and
table provided.

1. Differentiate among the following financial goals: short-term, medium-term, and long-term
financial goals. Give examples for each.

Goals Definition Examples

Short-term - Your short-term goals should consist of setting a budget, reducing your debt,
and starting an emergency fund. There are plenty of free online budgeting tools to help you learn
how to budget. Once you figure out a budget, it’s important to start thinking about how you can
reduce your debt.

Medium-term - Mid-term goals are what ties your short-term and long-term goals together.
Some mid-term goals may be to finish paying off your student debt, saving for your wedding,
saving for your first home, or even doing renovations to your current home. Keeping with your
budget and paying off the majority of your debt during your short-term goals, will give you more
cash flow to set aside into a savings account to make some of your mid-term goals a reality.

Long-term - Some examples of long-term goals include: paying off your mortgage, saving
for your children’s education, and retirement. A popular long-term goal is to be mortgage-free
before retiring. Once that financial freedom happens, it allows you to set more money away,
allowing you to enjoy your golden years to the fullest. Lastly, saving for retirement is the most
important long-term goal. When you are twenty with your first job, retirement seems so far
away, but before you know it, the day is here! Setting up an RRSP at a young age ensures that
you’ll have a more comfortable retirement and the financial freedom to enjoy it!

2. Interview at least 10 friends, classmates, and relatives. Explore their financial behavior or
spending and saving behavior and present data using any of the following forms:

• infographic

• meme

• cartoon
3. How would the different characteristic types react toward this SALE advertisement? Write
below what each type of person would likely say about the advertisement.

RUSTY LOPEZ

20% 0FF on all items

Frugal: I don’t need that right now.

Pleasure: I’ll buy a new pair of shoe as a gift for myself.

Status: They have 20% off, I want to buy and I will post it in social media.

Indifference: I will buy their products since I have extra money and I need to spend it.

Powerful: I will horde their products and I will give it to my friends so that they can do what I
want them to do.

Self-worth: I don’t want to buy even if they have 20% off discount.