2. Learning
Demonstrate an understanding of key concepts
about financial literacy;
Objectives: At the end of this module you are
expected to:
Enrich a successful awareness in the key concepts of
financial literacy;
Cognitive:
Affective:
Psychomotor: Able to discuss background knowledge about financia
literacy.
3. Financial Literacy
Financial literacy is the ability to understand
and effectively use various financial skills,
including personal financial management,
budgeting, and investing. Financial literacy is the
foundation of your relationship with money, and it
is a life-long 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
(https://www.investopedia.com).
4. Budgeting
A budget is a quantitative plan for acquiring
and using resources over a specified period.
Individuals often create household budgets that
balance their income and expenditures for food,
clothing, housing, and so on while providing for
some savings.
Planning involves developing goals and
preparing various budgets to achieve those
goals.
Control involves the steps taken by
management to increase the likelihood that all
parts of the organization are working together
to achieve the goals set down at the planning
stage.
5. Elements in the budget:
It is a plan expressed in financial-terms for
attaining some objective.
It is prepared and approved before a defined
time.
It shows the planned income to be generated.
It shows probable expenditure to be incurred.
It indicates the capital to be employed during
the period.
7. Classificationof Budget
Based on Time
Long-term Budget
This budget is related to the
planning operations of an organization
for a period of 5to 10years.
Short-term Budget
This budget is drawn usually for one
year. Sometimes a budget may be
prepared for a shorter period (like
monthly budget, quarterly budget,
etc.).
8. Classificationof Budget
Based on Condition
Basic Budget
A budget that is established for use
as unaltered over a long period is
called Basic Budget.
Current Budget
A budget that is established for use
over a short period and is related to the
current conditions is called the
Current Budget.
9. Classificationof Budget
Based on Functions
Master Budget
Master Budget is the summary
budget incorporating its component
functional budgets, which is finally
approved, adopted and employed.
The sales budget helps determine how
many units need to be produced.
Production budget is prepared after the
sales budget
Functional Budgets
functions of the business such
Functional Budgets relate to
as
product sales etc.
10. Classificationof Budget
Based on Flexibility
Fixed Budget (or Static Budget)
Fixed Budget is a budget which is
designed to remain unchanged
irrespective of the level of activity
attained.
Flexible Budget (or Sliding Scale
Budget)
Flexible Budget is a budget which is
designed to change by the level of
activity attained.
11. Strategies to Improve Your Financial
Literacy Skills
Create a Budget
Pay Yourself First
Pay Bills Promptly
Get Your Credit Report
Check Your Credit Score
Manage Debt
Invest in Your Future
12. Knowing Your Net Worth
Your net worth is the amount by which your
assets exceed your liabilities. In simple terms, net
worth is the difference between what you own
and what you owe.
NetWorth
Your assets are anything of value that you own
that can be converted into cash.
One of the challenges in calculating your net
worth is assigning accurate values to all of your
assets.
13. Why Your Net Worth Is Important?
When you see financial trends in black and white
on your net worth statements, you are forced to
confront the realities of where you stand
financially. Reviewing your net worth statements
over time can help you determine 1) where you
are, and 2) how to get where you want to be. This
can give you encouragement when you are
heading in the right direction (i.e., reducing debt
while increasing assets) and provide a wake-up
call if you are not on track.
Spend Wisely
Pay Down Debt
Save and Invest
14. ReferencesandSupplementaryMaterials
BooksandJournals:
Abao, E., Alda, R., Bacus, R., Dayagbi, F.,
Mananay, A. (2019). Building and enhancing new
literacies across the curriculum. Mutya Pubiishing
House, Inc.
OnlineSupplementaryReading Materials:
https://www.iedunote.com/budget
https://www.investopedia.com/terms/f/financial-
literacy.asp#:~:text=Manage%20Debt%E2%80%94Use
%20your%20budget,find%20a%20debt%2Dcounselin
g%20program.
