MODULE 5: FINANCIAL LITERACY

MODULE OVERVIEW
Welcome to Module 4! This module deals with financial literacy. As we all know,
financial literacy is one of the essential 21 st century skills. Despite the fast changing
times, it is important to equip teachers and students on dealing with things and
challenges on the financial aspect. This module consists of three lessons that you can
apply as you go along in your teaching-learning journey. Good luck!

MODULE LEARNING OUTCOMES

At the end of the module, you should be able to:
discuss the theoretical underpinnings of financial literacy
identify the fundamental concepts of financial literacy
evaluate financial literacy in day-to-day setting
st
evaluate financial literacy in 21 century education
st
cite the importance of financial literacy across different learning areas in 21 century
apply financial literacy in designing teaching and learning activities.
 LESSON 1: FINANCIAL PLANNING/GOAL SETTING AND VALUING

INTENDED LEARNING OUTCOMES

At the end of the lesson, you should be able to:

gain understanding on the different concepts in financial planning, goal setting, and valuing that they ca

create a financial roadmap leading to financial freedom; and

apply the different concepts of financial planning in their daily lives.
ABSTRACTION
Attaining the different financial goals in the future is indeed a challenging one. In
different parts of the world, most students in higher education systems are really
stressed in terms of financial aspect (Bernardo & Resurreccion, 2018). In the college-
age population, 37.58% of the people mentioned that the main reason why they do not
usually enroll themselves to college or university is because of the cost of higher
education. Moreover, the majority of the data says that having additional means of
earning money to support schooling does not stop them from attaining their dreams
(Reyes et. al., 2015).

With financial literacy, schools are now motivating their students to maintain their
well-being and acquire their positive resources that will help them in dealing with their
present financial challenges. Scholarships, student assistance programs, and other
interventions done by several schools are usually conducted to encourage students in
continuing their education and achieve their dreams. Consequently, the financial
strategies that the students usually do in the present times are carried out as they go
along in their respective journeys. This can be carried through obtaining a stable job,
establishing a business, and additional means of earning money in the world of work
(Bernardo & Resurreccion, 2018).

With these things, it is highly possible for you to obtain your financial goals if you
start with yourself. Do take note that everything starts with discipline and motivation.
That is why an activity earlier was conducted in order for you to have a roadmap to
financial freedom. Stay tuned because as you go further in the future lessons, you will
be equipped with achieving financial stability to be able to teach your future students to
be financially literate.

Financial literacy refers to the ability to “use knowledge and skills to manage
one’s financial resources effectively for lifetime financial security” (Mandell, 2009). It is
highly composed of two elements: understanding and use. When people understand
utilizing ways to manage their own finances, such as the knowledge of financial
products, knowledge of financial concepts, possessing the mathematical skills in
financial decisions, and engaging in financial planning, they are able to apply those
strategies in managing their money (Huston, 2010, as cited in Maur, n.d.). Establishing
a plan, accumulating more wealth, having a less credit card debt, and mitigation of
engaging in high-cost borrowing methods are examples (Maur, n.d.).

Investing in financial education really creates a huge impact to the students,

especially that it teaches you to be responsible and instills the value of discipline
needed to keep track of your financial goals. This involves setting your short-term,
medium-term, and long-term goals. Short-term goals include the payment of your
monthly living expenses, basic needs, and emergency fund. Achieving goals that are
attainable within five (5) years such as buying a house or car are examples of medium
term-goals. Lastly, long-term goals are those that take longer than five years to achieve.

As Maur (n.d.) asserts that in addressing the growing demand for more
investments in the Philippines, most financial industries recommend Filipinos to save
first and then spend whatever is left after setting aside the savings.

LESSON 2: BUDGETING, SPENDING, AND INVESTING

INTENDED LEARNING OUTCOMES
At the end of the lesson, you should be able to:
define budgeting spending, and investing;
determine the fundamental concepts of budgeting, spending, and investing; and
apply the basic concepts by creating a budgeting and investment plan.

Money mobilizes the world. Everyone purchases products and services that are
highly available in the market. Adults earn money by making products or performing
services. Kids receive allowances. Everything is earned and bought by money. As
others say, “you need to work hard in order to earn money for a living.”
Due to increasing demand of basic needs and status of living, many people are
tested whether to prioritize their needs or their wants. Some want to prioritize their basic
needs for daily survival, but some want to “go with the trend” by buying expensive
clothes, accessories, and other things that will satisfy their desires.

For people in the early adulthood stage- specifically for college students who are
given independence in terms of living and the opportunity to budget their own
allowances, they commonly encounter challenges especially on managing their
finances.

Shahrabani (2012) asserted that the intention to budget among college students
is affected by past debt frequency; thus, calling for the improvement of financial literacy
and changing attitudes that will lead to effective financial management that can increase
intentions in terms of budgeting. In addition, changes in budgeting requires additional
knowledge about money management. Consequently, this will motivate students to
avoid and solve financial problems in the future. This will also motivate the students to
create a financial plan as they will go along on their respective milestones.
Maintaining a budget reduces feelings of anxiety and stress brought by consequences
of financial debt.

Budgeting is a process that puts you in control of your money. This shows how
much money you currently have and where will it go to meet your needs and wants.
This will also pave the way for attaining your financial plan.

Budgeting is a challenging thing in managing your finances as this is crucial in

making your financial plans within the reach. Vohwinkle (2012) cited in Gitman (2013)
emphasizes tips on budgeting:

1. Gather every receipt you have. This includes your grocery receipt, utility
bills, school contribution expenses, and other transactions you made with
receipt.
2. Record all of your sources of income/allowance. If you receive your
monthly allowance or your salary from a part-time job, list it down as a
monthly amount.
3. Create a list of usual monthly expenses. This includes grocery purchase,
school expenses, and other expenses you usually encounter. Make sure
that you include your savings in your expense allocation.
4. Make adjustments to expenses if necessary. The target in this tip is to
make your monthly allowance and monthly expenses equal. If your
expenses are greater than your monthly monetary source, adjust your
expenses.
5. Review your budget monthly. It is really important to review your budget
regularly in order to make sure you know how things are going.

After allocating a saving fund every month for your monthly allowance, you can
start investing something. When we talk about investment, this emphasizes the act to
start a project. With investment, you can start a small project. This can be in a form of
selling small food items or buying a printer and then offer a service where you can print
a certain document for a reasonable price. In this way, the capital you have invested in
your small project prospers into a bigger one, and this helps you to further achieve your
financial goals.

LESSON 3: INTEGRATION OF FINANCIAL LITERACY

ACROSS THE CURRICULUM
INTENDED LEARNING OUTCOMES
After the lesson, you should be able to:
understand different concepts on the importance of integrating financial literacy across the curriculum

identify several teaching strategies and technological tools that will enhance the financial literacy of stu

make a series of activities on integrating financial literacy in day-to-day classroom activities

apply your daily financial activities on building financial literacy across the curriculum

ABSTRACTION
Prior financial experience enhances teachers to incorporate financial discipline to
their students. As Kaiser & Menkhoff (2017) emphasizes, integrating financing in
education creates a huge impact in financial behavior of students and will develop their
financial literacy. Up to this time, financial literacy is called to be one of the imperatives
in the teaching-learning process, as this is highly crucial in the daily living of the
students as they go ahead in their respective milestones in life. As financial literacy
becomes a basic life skill, Meszaris and Suiter (2017) calls for parents and teachers to
establish a strong home/school relations to their students in order to enhance the
financial literacy of their children.
 For elementary education, it is indeed a challenging thing especially when
financial literacy is integrated into the curriculum. Henning & Lucey (2017) suggests that
faculty collaboration in integrating financial literacy in learning simulates students in the
real-world. Encouraging students to drop a single coin in a day or in a week will entice
students to save. In establishing closer relations with their parents, this will foster a
great collaboration as it helps students to utilize financial strategies in saving and use
financial decisions on how they are going to spend their savings. Motivating parents to
enroll their children into a bank savings account is a plus point.

Most students in secondary education are considering financial choices in their

daily lives. Enhancing their personal independence, especially on making financial
decisions, high school students are trained with basic financial skills such as
mathematical and numeracy skills in budgeting, and financial literacy where the
students are trained with critical thinking skills, especially on considering financial
decisions and prioritizing their needs and wants (Erner et.al., 2016).

For incorporating financial literacy to young adults with special needs, Henning &
Johnston-Rodriquez (2018) recommends to facilitate materials that are culturally-
responsive, accurate, and relevant. Individualized approaches must be facilitated and
make sure that the materials meet the needs of the students considering their current
economic and sociocultural factors.

With the technological advent, there are many technological tools that are
available and accessible for students and teachers in facilitating financial literacy.
Several examples are given below:

1. iAllowance- this application helps parents to give frequent reminders to their kids
in getting their chores done before giving their allowance.
2. Bankaroo- this mobile app motivates students ages 5-14 years old in setting their
financial goals, saving money, using basic accounting skills, and ways of budgeting their
money.
3. PiggyBot- kids ages 6-8 years old can learn goal setting, saving, and virtual
banking. This mobile app lets children upload photos and review transaction records

Moreover, Page (2014) indicates four lesson principles in preparing lessons that
enhances the financial literacy of the students:

1. Relevance. Making sure that the students see the financial world through the
lesson you made is vital in the crucial development of students in their daily survival.
Saving strategies, goal-setting activities, comparison-shopping techniques, concepts in
compound interest, and behavioral finance strategies are opportunities you can offer to
the students. In this way, students are given the skill in making better financial decisions
and managing their own money.
2. Integration. Introducing financial concepts that the students can actually use
throughout their lives are useful. Giving them numerous opportunities in saving money,
doing saving challenges, encouraging students to use expenses and budget tracker
mobile applications, and other ways can enhance the financial literacy of the students.
3. Critical Thinking Skills. Giving students the opportunity to use their critical
thinking skills in making financial decisions, such as prioritizing their needs and wants
will help them utilize empowered financial strategies that they can carry throughout their
lives.
4. Improvements of Knowledge, Behavior, and Attitudes. As a teacher, always
motivate your students to put their learning into action. Encourage your students to use
financial tools that they can access. Encouraging students to use spreadsheets,
financial ledgers, and other technological tools that will let them keep a track on their
expenses will improve their lives in terms of financial literacy.

With the enormous opportunities in encouraging your students to build their

financial literacy, it is important to entice your students in applying basic financial
concepts that are highly applicable in their daily lives. With different simulations and
activities that will enhance their financial literacy, this will incorporate discipline and
motivation in letting the students achieve their financial goals. As an essential 21st
century skill, this will prepare students to attain their financial goals in a short-term,
medium-term, and long-term basis.