Financial literacy

Chapter 4
Objectives
At the end of the chapter,you should be able to
*define financial literacy.
*assess level of personal financial literacy using set of
standards and questions.
*characterize financial literacy in the philippines.
*start practical steps to develop personal financial
literacy.
 financial literacy

By:Mary Catherine S. Benologa

 financial literacy
The ability to read,analyze,manage,and communicate
about the personal financial conditions that affect
material well-being.
The six standard and key concept

1.Earning income
*Income earn or received by people.

2.Buying goods and services

*factors that influence spending choices.
The six standard and key concept

3.Savings
*Concept of savings

4.Using credit cards

*Concept of credit and the cost of
using credit.
The six standard and key concept

5.Financial investing
*Concept of financial investment.

6.Protecting and Insuring

*Concept of financial risk and loss.
 The benefits of financial literacy

By:Siti Farhana D. Bimpolok

One's level of financial literacy affects one's quality of life
significantly.It determines one's ability to provide basic
needs,attitude toward money and investment as well as
one's contribution to the community,financial literacy
enables people to understand and apply knowledge and
skills t achieve a lifestyle that is financially
balanced,sustainable,ethical,and responsible.
Financial literacy improves financial behavior and reduces
the need for government rescue. It cultivates decision-
making skills and discipline, making it easier for adults to
manage financial matters. However, even prudent
individuals may encounter financial difficulties, making it
essential for financial stability.
 Financial literacy in the Philippines

•World Bank study in 2014 estimated 20 million Filipinos

saved money but only half had bank accounts.

•Asian Development Bank (ADB) study in 2015 revealed

that PH does not have a national strategy for financial
education and literacy.
 Financial literacy in the Philippines

•In 2016, Bangko Sentral ng Pilipinas (BSP) released the

national strategy for financial inclusion, stating that while
institutions strive to broaden financial services, financial
literacy should also complement such initiatives.

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

last year, only 25% of Filipinos are financially literate. This
means that about 75 million Filipinos have no idea about
inflation, risk diversification, insurance, compound
interest, and bank savings.
 Financial literacy in the Philippines

•Ten years after discovery of the stock market, still less

than one percent of PH population is invested in it.

•More than 80 percent of the working middle class have no

formal financial plan.
Because of these findings, public and private sectors alike have recognized the need to
strengthen financial education in the country. Last November 27-28, 2018, more than 1,000
leaders, decision-makers, influencers, and representatives from public and private
institutions, civic society, and the academe gathered for the first ever Financial Education
Stakeholders Expo organized by BSP. The Expo is designed to build an organized network of
players that share the vision of a financially literate citizenry and cohesively implement a
variety of initiatives to achieve this vision. This is in line with the BSP advocacy for financial
education and supports the BSP mandates of maintaining price stability, financial stability,
and efficient payments system. It is the BSP's conviction that a financially educated Filipino
is an empowered Filipino who is able to make wise financial decisions that positively impact
personal financial circumstances, and, consequently. contribute to inclusive and sustained
economic development.
 Developing personal Financial literacy

By:Rochelle Delute
 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.
6 major characteristic types in how people view
money (incharge 2017)

1.frugal 2.Pleasure

People seek financial Seekers use money to bring

security by living below their pleasure to themselves and
means and saving money. to others.
6 major characteristic types in how people view
money (incharge 2017)

3.status 4.Indifference

Some people use money to Some people place very little

express their social status. importance on having money and
would rather grow their own food
and craft their own clothes.
6 major characteristic types in how people view
money (incharge 2017)

5.Powerful 6.Self-worth

Powerful people use money
to express power or control
over others.
People who spend money for slef
worth value how much they
accumulated and tend to judge
others based on the amount of
money they have.
 Spending patterns

Individuals have different spending

patternrs.Before one can come up with a
financial improvement plan
 2 Common Spending patterns

1.Habitual spending
*occurs when one spends out of habit,when one buys the
same item daily,weekly,or monthly.

2.Impulsive spending
*occurs when one mindlessly purchases items that he or
she does not need.
 Fixed vs. Variables Expenses

Fixed Expenses
*Remain the same year-round

Variable Expenses
*Occur regularly but the same amount you pay
varies.
 Needs vs. Wants

Needs
*are essential to our survival

Wants
*are things that you would like have but you can
live without it.
 Setting financial goal

By:Harry Mission
 Setting financial goal
Short-term goals-
*measured in weeks and can provide instant
gratification and feedback.

Medium-term goals-
*can be accomplished within one to six months Long-
term financial goals can take years to achieve.
 Needs vs. Wants

1. Record
-Keep a record of what you spend.
2. Review
-Analyze the information and decide what you do.
3. Take action
-Do something about what you have written
down.
 Importance of Saving

Emergency Bolster
Retirement
Future Events
Instability of Social Security
A Little Goes a Long Way- Small consistent
savings go a long way.
 There are two ways to save

save before you spend.

save after you spend wisely.
in order to stick to the savings habit, you should

1. commit to a month:
2. find an accountability partner:
3. find a savings role model who is successful
with his/her money, through tried and true
savings: 4.write your goal down and track it; and
5. avoid tempting situations (don't go to the mall
to "hang out").
Thank You