Financial

Literacy
Educ 319- Building and Enhancing
Literacies Across Curriculum
Lesson Objectives:

• 1. Distinguish the concepts and principles of financial literacy.

• 2. Demonstrate understanding of a financially literate person.
• 3. Determine ways on how to integrate financial literacy in the
curriculum.
What is financial Literacy?

• The cognitive understanding of financial components and skills.

• 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.
• It is core life skill in an increasingly complex world where people need to take charge of their
own finances, budget, financial choices, managing risks, saving, credit, and financial
transactions.
• Financial literacy may be defined as “[the] understanding of financial products,
services, and concepts … [that empowers students] to make informed choices, avoid
pitfalls, know where to go for help and take other actions to improve their present and
long-term financial well-being.”
• Financial literacy is the cognitive understanding of financial components and skills
such as budgeting, investing, borrowing, taxation, and personal financial
management. The absence of such skills is referred to as being financially illiterate.
Backgrounder:
• With a vision of a financially literate nation, the Department of Education (DepEd), through the Bureau
of Curriculum Development (BCD), has expanded and intensified the integration of financial education in
the K to 12 Basic Education Curriculum to improve the financial literacy and capability of its learners,
teachers, and personnel which will enable them to acquire financial health and financial inclusion.
• Recent studies show that Filipinos struggle to understand basic financial concepts, with a Bangko
Sentral ng Pilipinas (BSP) survey showing that 41% of Filipinos can only answer one of three financial
literacy questions correctly and a meager eight percent can answer three.
• With this, DepEd issued its Financial Education Policy under DepEd Order No. 022, Series of 2021
which aims to help learners and teaching and non-teaching personnel to make sound financial decisions
by making Financial Education an essential part of school lessons and activities for learners and provision
of capability building opportunities for teaching and non-teaching personnel.
• “Financial Education is vital in developing a financially literate citizenry, empowering them to make wise
financial decisions, take advantage of economic opportunities, and achieve financial health” explained
Education Chief Leonor Magtolis Briones. “Financial literate citizens can contribute more productively to
inclusive growth and be more effective agents of nation building,” she added.
• Under the said policy, the National Educators Academy of the Philippines (NEAP), the Teacher
Education Council (TEC) – Secretariat for teachers-in-training, and the Bureau of Human Resource and
Organizational Development (BHROD) will give appropriate capacity and competency building activities to
teachers, leaders, teachers-in-training, and non-teaching personnel.
Financial Plan
• A financial plan is a comprehensive statement of an individual’s long term objectives for security and
well-being and detailed savings and investing strategy for achieving the objectives. It begins with a
thorough evaluation of the individual’s current financial state and future expectations.

• Steps in creating a financial plan:

1. Calculating net worth – the amount by which assets (cash, savings, property, jewelry) exceed
liabilities (credit card, loans, mortgages). Formula: Total Assets minus total liabilities = Current
Net Worth
2. Determining cash flow – Document your spending, savings and investments as well as your
necessities every month so that you know where your money goes.
3. Considering the priorities – core financial plan of a person will consider the following: (1)
retirement strategy/plan; (2) comprehensive risk management plan (insurance, personal liability
coverage); (3) long-term-investment plan based on specific investment objectives and a personal
risk tolerance profile; (4)Task reduction strategy for minimizing taxes on personal income allowed
by the tax code.
Five Financial Improvement strategies
• Identify your starting point. (Come up with financial plan. Identify your
financial status where you spend too much.)
• Set your priorities. (Needs over wants) Needs include your food, shelter,
clothing, healthcare, and transportation)
• Document your spending. (figure out your cash flow daily, weekly,
monthly…so that you will know your spending.)
• Lay down your debt. (address your debts and goals, and see to it that you
will prevent getting ahead of your financial goals…)
• Secure your financial future. (consider retirement
preparations/investments and other opportunities/options that will spare
your from risks and other uncontrollable circumstances in life.
Financial Goal Planning and Setting
• Setting goals is a very important part of life especially in financial planning.
• Key Areas in Setting investment goals for Consideration:
1. Time Horizon –indicates the time when the money will be needed. Take
note, the longer the time horizon, the more risky investment can be
made.
2. Risk Tolerance – The time horizon can affect risk tolerance.
3. Liquidity Needs – liquidity refers to how quickly an investment can be
converted into cash (or the equivalent of cash). The liquidity needs
usually affect the type of chosen investment to meet the goals.
Investment goals: Growth, Income, and
Stability
• It is important to think about how investments may help achieve
those goals. When considering any investment, think about what it
offers in terms of three key investment goals: (1) Growth (also known
as capital appreciation) is an increase in the value of an investment;
(2) income, of which some investments make periodic payments of
interest or dividends that represent investment income and can be
spent or reinvested; and (3) Stability, or known as capital
preservation or protection of principal.
Budget and Budgeting
• A budget is an estimation of revenue and expenses over a specified future of time
and is usually compiled and re-evaluated on a periodic basis. Budgeting is the
process of creating plan to spend money.

• 7 Steps to Good budgeting:

1. Set realistic goals.
2. Identify income and expenses.
3. Separate needs from wants.
4. Design your budget.
5. Put your plan into action.
6. Plan your seasonal expenses.
7. Look ahead.
Spending
• 1. Start by listing your goals.
• 2. Divide your goals according to how long it will take to meet each goal.
• 3. Estimate the cost of each goal and find out how much it costs.
• 4. Project future cost.
• 5. Calculate how much you need to set aside each period.
• 6. Prioritize your goals.
• 7. Create a schedule for meeting your goals.
Investment and Investing
• Four aspects to consider in investing your money:
1. How long will you invest the money? (Time horizon)
2. How much money do you expect your investment to earn each
year?(Expectation of Return)
3. How much of your investment are you willing to lose in the short-
term in order to earn more in the long-term? (Risk tolerance)
4. What types of investment interest you? (Investment type)
Savings
• Savings – money set aside on a savings account on a regular basis.
• Emergency Savings Fund – savings used as an emergency fund.

• Reasons Why Save Money

1. To become financially independent.
2. To save on everything you buy.
3. To buy a home or a car.
4. To prepare for the future.
5. To get out of debt.
6. To augment annual expenses.
7. To settle unforeseen expenses.
8. To respond to emergencies.
9. To mitigate losing job or getting hurt.
10. To have a good life.
Insurance and Taxes
• Insurance is a contract (in the form of a policy) between the policyholder
and the insurance company, whereby the company agrees to compensate
for any financial loss from specific insured events. In exchange for the
financial protection offered, policy holder agrees to pay a certain sum of
money, known as premiums to the insurance company. Insurance is the
best form of risk management against uncertain loss.
• There are various types of insurance to choose from, such as life
insurance, health insurance, motor insurance, property insurance,
business insurance, etc. Besides, the financial protection derived from
insurance entails tax benefit claim on the paid premiums.
Insurance and Taxes
• The following are concepts related to insurance and taxes that every person/teacher should know.
However he/she should carefully analyze and critically examine well before pursuing any deal with
them.

1. Employer-Sponsored Insurance – If working in a company with 50 or more full-time employee

plans are available, the employer is required to provide employee-only insurance that meets
minimum guidelines. Examine the plan offered, but do not pay over 9.66% of household income in
premiums.
2. Marketplace Plans – Marketplace based on an area of residence and income upon meeting
minimum coverage requirements. Marketplace plans come in three tiers: bronze, silver, and gold.
Generally, bronze plans offer the least coverage at the lowest premiums, while gold plans provide
the most coverage at the highest place.
Life Insurance
• Life Insurance is a type of insurance that compensates beneficiaries upon the death of the policyholder. The company
will guarantee a payout for the beneficiaries in exchange of premiums. This compensation is called “death benefit”.
• Depending on the type of insurance one may have, these events can be anything from retirement, to major inquiries, to
critical illness or even to death.
The following are common risk categories:
1. Preferred Plus – The policyholder is in excellent health, with normal weight, no history of smoking, chronic illnesses,
or family history of any life- threatening disease.
2. Preferred – policyholder is in excellent health but may have minor issues on cholesterol or blood pressure but under
control.
3. Standard Plus – policyholder is in very good health but some factors, like high blood pressure or being overweight
impede a better rating.
4. Standard – most policyholders belong to this category, as they are deemed to be healthy and have a normal life
expectancy although, they may have a family history of life-threatening diseases or few minor health issues.
5. Substandard- those with serious health issues, like diabetes or heart disease are placed on a table rating system,
ranked from highest to lowest. On average, the premiums will be similar to Standard with an additional 25% lower
claim on table ratings.
6. Smokers – due to an added risk of smoking, the policyholder in this category are guaranteed to pay more. Aside from
health claims, age is also a critical factor in determining premiums. Therefore older people pay more expensive
premiums.
Benefits of Life Insurance

• The following are the benefits of life insurance.

1. It pays more medical and funeral costs.

2. For financial support.
3. For funding various financial goals.
4. Acts as a retirement secured conform.
5. It covers costs incurred from taxes and debt.
Types of Life Insurance
Types Characteristics Advantage Disadvantage
1. Endowment Grants a lumpsum after a Allows for saving up for It requires higher
specified amount of time specific purposes. It premiums than other
or upon death, the policy guarantees return upon types of life insurance.
owner is required to pay maturity.
the amount of premium It offers some form of It is not the best option for
for a predetermined insurance coverage those looking at full life
number of years or until a protection.
specific age is reached.
2. Term It is the simplest form of It entails low premium It has no benefit if
life insurance to obtain of requirements. policyholder outlives the
which upon death, the It is a strong option for term period set.
beneficiaries are paid with policyholders who need Premium usually gets
the benefit. insurance but cannot higher upon renewal of
afford whole life or terms.
endowment.
It is easy to understand
Types of Life Insurance
Types Characteristics Advantages Disadvantages
3. Whole life It provides coverage for the It offers permanent It requires higher premiums.
policyholder’s entire life or protection.
until they reach 100 years It is flexible in terms of It is difficult to understand
old. It acts both as payments of premiums. due to complexity.
protection and savings It entails fixed premiums.
mechanism since a portion It usually comes with
of the premiums is allocated additional features and
to build up cash values. “living” benefits.

4.Variable Universal Life (VUL) It serves as both life It takes dual purpose: life Cash values and dividends
protection and investment insurance plus investment are not guaranteed.
vehicle in one package. A tool.
portion of the premium is It has no maturity age. The Face amount and death
allocated into various cash value is payable along benefit are dependent on
investment vehicles for the with the assured sum. The investment performance.
purposes of wealth creation. death component is not
The contract’s earnings limited to face value. It It includes various
depicts liquidity wherein investment fees.
funds can be accessed in
times of need and can serve
an emergency funds.
Financial Stability

• Like anyone else, teachers also aim to become financially

stable if not todays, maybe in the future. Being financially
stable means confidence with the financial situation,
worriless paying the bills because of available funds, debt-
free, money savings for future goals and enough emergency
funds.
• Financial stability is not about being rich but rather more of a
mindset. It is living a life without worrying about how to pay
the next bill, and becoming stress-free about money while
focusing energy on other parts of life(Silva, 2019).
Ten Strategies in Reaching Financial Stability
1. Make savings automagical.
2. Control your impulsive spending.
3. Evaluate your expenses and live frugally.
4. Invest in your future
5. Keep your family secure.
6. Eliminate and avoid debt.
7. Use the envelope system.
8. Pay bills immediately.
9. Read about personal finances.
10. Look to grow your net worth.
Signs of being Financially Stable
• Teachers, line any one else, often work to the extent to earn more even through additional jobs on
the side just for their desire for financial stability.
• Rose (2019) presents some signs of a financially stable person:
1. You never overdraw your checking account.
2. You don’t lose sleep over finances.
3. You use credit cards for convenience and rewards but never out of necessity.
4. You don’t worry about losing your job.
5. You pay your bills ahead of time.
6. People ask your opinion about financial matters and you inspire them.
7. You’re generally happy with your financial situation.
8. You finance your cars over five years or less if you take loans at all.
9. You contribute more to your retirement.
10. You don’t feel guilty when you’re out for special occasions.
Signs of being Financially Stable
11. You can afford to buy the things you really want.
12. Recreational spending doesn’t appeal to you.
13. You’re a natural saver.
14. You’re generous with money when it comes to charities or helping others.
15. You’re confident about your future.
16. Your net worth grows significantly from year to year.
17. You have substantial equity in your home.
18. You consistently live beneath your means.
19. You could survive for months without a paycheck.
20. You feel in control of your finances and never dominated by them.
Integrating Financial Literacy into the Curriculum
• Financial education in schools should be part of a collaborative national strategy to ensure relevance
and long term sustainability. The education system and profession should be involved in the
development of the strategy.
• Barry (2013) underscored that financial literacy has a wide repercussion outside the family circle and
more precisely, the school. Hence, the administrators and professors need to develop a curriculum
that would provide student’s insights on having the value of financial literacy including the effect it
can bring them.
• The learning framework, which sets out goals, learning outcomes, content, pedagogical approaches,
resources and evaluation plans. The content should cover knowledge, skills attitudes and values.
• Financial education can be integrated in subjects like Mathematics, Economics, Social Studies,
Technology and home economics, Values education and others. It must be integrated in the subjects
in real-life context across all the subjects.
Sample Template of a Financial Plan with a
short/long term goals
Short-Term Goals Target Target SAVINGS PLAN
Cost Value Date
Month 1 Month 2 Month 3 Month 4 Month 5 Total
Savings
1. I will buy a new branded
shoes during Christmas.
2. I will visit a museum in
Davao City.
3. I will give a present on my
mother’s birthday.
Long-Term Goals Target Cost Target Month 1 Month 2 Month 3 Month 4 Month 5 Total
Value Date Savings
1. I will have a travel 20,000 July 19-
vacation to Boracay. 21,
2023
2. I will avail a mobile plan.
Budget Plan Template : You can make use of
this template to integrate in the subject tasks.
Outstanding Cash Income: Php 25,000.00
Expenses Amount
1. transportation 50*30 1500.00
2. Food and snacks 4000 4000
3. load/communication 2000 2000
4. Insurance/emergency 5000 5000
5. medical/dental 2000 2000
6. savings 5000 5000
Total: Remaining Cash: 4,500.00 19,500.00
Task: Aligned with LE 2
• Come up with a lesson plan that integrates the context of financial
education or financial literacy in the subject you teach. (to be
submitted on Nov. 25, 2022)