SESSION 3.

FINANCIAL LITERACY

Pre-Test

Current Financial Situation

Before you proceed with the lesson, assess your current financial situation.
This selfassessment tool will help you determine your status and help you
improve your personal financial management.

This assessment is excerpted from Money Management International E-Book

on Financial Literacy: Your 30 Step Path to Financial Wellness.

Financial Practices Always Sometimes Never

Pay the rent/mortgage payment and utility
bills on time?
Save at least 10% of your net income?
Keep three months net income in reserve for
emergencies?
Plan ahead for large expenses?
Set and keep financial goals?
Follow a budget?
Shop for comparison?
Regularly review your credit report?
Examine your checking account statements
often?
Continue your financial education?

SCORING
Add your points using this system:
Always = 2 points Sometimes = 1 point Never = 0 points

0-10 Points: Indicates a need to take control of your finances.

11-15 Points: Reflects a good effort to manage your money effectively.
16-20 Points: Demonstrates ability to manage your finances successfully. Can
you write down your realization?

Activities and Assessment

Assessment 1. Case Analysis: How Do I Budget?

The case study that you are about to read is adopted from Next Gen Personal Finance
(NGPF).

Sharon thought back her conversation with Alana last month. All of Sharon’s friends knew who to
turn to if they had money questions and problems. Sharon has been a secondary teacher for four
years. Alana, her friend and co-teacher, has been experiencing financial stress for the past years.
Alana asked Sharon what she could do to manage her money more effectively. After Sharon
answered with a one word answer, Alana asked “How do I budget?”

Sharon asked Alana to describe her goals and current spending habits. Alana responded in the
following way:

“I totally freaked out after talking with my parents. They were asking me to help send my younger
sister to college. College costs a lot of money and my parents tell me now that they expect me to
pay for my sister’s board and lodging expenses which I estimate to be 70,000 per year. That’s so
unfair. I have no idea how I can make both ends meet given that additional responsibility..
Something needs to change, but I don’t know where to start.”

Sharon developed a basic plan for Alana to track every peso she spent over the course of a month.
Alana collected all her receipts in a shoebox and reviewed them with Sharon at the end of the
month:
Food: lunch and snacks at Jollibee/Chow king - 5,000 per month
Transportation: 2,000 per month
Clothes: 3 trips to the mall with friends @ 4,000.00
Shoes: 1 pair @ 1,500.00
Cell phone/internet load : 1,500.00
Movies: 4 movies - 4,000
Personal/beauty care: 2,000.00

To help make sense of all of this information, Sharon asked Alana to organize the information by
using the budget template provided below. In the category column, she would list all of her
various expenses. She would then make a judgment call about whether each expense was a Want
or a Need. In the Monthly Cost column, she would total up the cost for each of the expenses. In the
last column, she would calculate how much that item was as a percentage of her total costs. This
would help her determine where she was spending most of her money in the past month.

Answer the questions applying the principles and tips on financial management that you
learned.
Help Alana realize her spending by completing this chart with the information provided
above:
Category Want/Need Monthly %age of
Cost Total Costs
Movies
Food

Clothes/mall shopping
Cell phone bill
Shoes
Transportation

Personal/beauty kit
TOTAL COSTS

Answer these questions:

1. Do some quick math to compare how much Alana is spending for her needs and for
her wants.
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________

2. What should be her goals by this time?

_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________

3. What 2-3 options would you outline for Alana to help her achieve her goals? Be
ready to discuss with her the ways to adjust her budget. Be specific with your
recommendations, highlighting specific principles in achieving financial success.
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
Assessment 2. “Sangla ng ATM”
Another case you will read is about the plight of teachers who have succumbed to money
lenders.

It is payday again and Principal Reyes is already anticipating that some teachers would
either go to school late or go home early. As usual they have to go to Mrs. Puntarito, a
known loan shark in the municipality. Because she holds the ATM of the borrowers
including the PIN (supposed to be confidential) they need to see her every pay day to get
the remaining balance of their salary for the month after deducting the installment plus the
interest of their loans.
Principal Reyes became more anxious this time because three of the newly appointed
teachers, just five months in the service, have already joined the bandwagon. He observed
that the young teachers’ passion for fashionable clothes, iPhones, tablets, laptops, and other
stuff have caused them to be in this complicated, embarrassing, and demeaning situation.
No wonder, even on paydays, they don’t look happy, inspired, and rewarded.

1. Why do you think the so called “Sangla ng ATM” is happening to teachers and
personnel of the department?
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________

2. How can the teachers get out of that situation?

_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________

3. What recommendations can you give them?

_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
Assessment 3. The Debt Test

This Debt Test is also excerpted from Money Management International E-Book on
Financial Literacy: Your 30 Step Path to Financial Wellness.

You are now about to unveil your ways of dealing with debts. The questions are
answerable by YES or NO. Answer it honestly with either “yes” or “no.”
1. Yes No Is an increasing percentage of your income going toward paying
debts?
2. Yes No Is your savings cushion inadequate or nonexistent?
3. Yes No Are you near or at the limit of your lines of credit?
4. Yes No Can you only make the minimum payments on your revolving charge
accounts?
5. Yes No Are you often late with bill payments?
6. Yes No Are you paying bills with money earmarked for something else?
7. Yes No Are you using credit to pay for items you used to buy with cash?
8. Yes No If you lost your job, would you be under immediate financial strain?
9. Yes No Are you unsure about how much you owe?
10. Yes No Are you being threatened by collectors with possible legal action?

A ‘yes’ to any of these questions is a sign that you may need to make debt payoff a priority.

Write your reflection here.

_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________

Assessment 4. Take the 30-day Challenge

Saving Chart A

Target Amount:
Target Dates: (has to be 30 days excluding Sundays)

Week/Total per Week Date Amount

Week 1
Total Money Saved: _______

Week 2
Total Money Saved: _______

Week 3
Total Money Saved: _______

Total Amount Saved

Hit the target? Why?

What to do next? (whether you hit or not the target)

Saving Chart B

Inclusive Dates Amount Saved Where Do Money

Go
1st 30 days
2nd 30 days
3rd 30 days
4th 30 days
Total Money Saved
(at the end of the year)

Assessment 5. My Budget and Spending Plan

This simple plan will help you budget your monthly income. Include in this budget plan
your savings, debt payment and bill payment.

Month & Year:______________

Total Income: ______________
Savings/Item/Service Need / Want? Targeted Cost Actual Cost

Total
Reflection:

Assessment 6. My Long-Term and Retirement Plan

Here, make your long-term and retirement plan. You might be interested to buy a house
and lot or a car or attend school or send someone to school, so, you need to make this plan.

Don’t forget to allocate for your retirement. Make a sort of an investment plan for your
retirement age.

Make sure to keep your goals SMART.

Financial Priority Target Number Amount What to Remarks
Goals (Low, Date of Years Required Do
Medium,
High)

Reflection

At the end of the year, reflect on how this session affects you as a person and
as a teacher in terms of your financial status.
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________

State your commitment on what you will do for the next year.
You are encouraged to do the suggested plans the next year around or
improve them if you wish.
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________