LEARNING ACTIVITY SHEET

Grade Level/ Grade 12 BUSINESS FINANCE Quarter 2

Subject
Topic Money Management Cycle Week 4
Illustrate the money management cycle and give
MELC examples of sound practices in earning, spending, Competency 15
saving, and investing money.
• Discuss the money management cycle.
• Describe budgeting, spending, saving, and Duration 4 hours
Specific
Objectives: investing.
• Apply money management cycle on real-life
situations. Score

I. Let’s Know
Money management is the process of overseeing one’s money to ensure a successful
financial life. It includes the process of budgeting, spending, saving, and investing. It helps you to
distinguish wants from necessities to make sure you are only spending to things that are essential
for living. It also gives you the security of knowing that you have the sources to deal with
unexpected expenses. Further, good financial sense has impact to your future, and personal well-
being. Financial health is essential to have a stress free life.

Spending

Budgeting Saving
Money
Management
Cycle

Investing

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 Version: 0

Date: July 10, 2020

Now, let’s discuss the money management process and its importance. First, let’s
understand what is budgeting and its significance to achieve financial goal.

It is the important thing you can do to manage your expenses. It

What is budgeting? includes ways to create a budget plan for your cash. To
ensure that you may continually have enough cash for
the things that matter and critical to you.

When we talk about budgeting plan it refers to the process of creating

a plan to track expenses and help you decide how you will spend your money.

Here’s an example of monthly budget plan of Ana Cruz. See the table below.

Ana Cruz Monthly Budget Plan

EXPENSE TYPE AMOUNT

INCOME

Work ₱ 5,000
Parent Contribution ₱ 1,000

FIXED EXPENSES

Transportation ₱ 400
Cell phone load ₱ 600
Total ₱ 1,000
Amount Remaining ₱ 5,000

VARIABLE EXPENSES

Food (Recess & Lunch Meal) ₱ 1,500

Entertainment (Movie, Videoke, etc.) ₱ 500
Clothing ₱ 1,000

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 Total ₱ 3,000

Savings ₱ 2,000

You can see on the table the monthly budget plan of Ana Cruz, a working student. The
table shows her monthly income from her work amounting to ₱ 5,000 and from her parent’s
contribution amounting to ₱ 1,000 with a total of ₱ 6,000. Her monthly fixed expenses include
transportation amounting to ₱ 400 and cell phone load ₱ 600 with a total of ₱ 1,000. Moreover,
variable expenses include food amounting to ₱ 1,500, entertainment ₱ 500, and clothing ₱ 1,000
with a total of ₱ 3,000. Since the total monthly income of Ana is ₱6,000 and her total cost is ₱
4,000, so, her total monthly saving is ₱ 2,000.

Date: July 10, 2020

Now, we will discuss the importance of budgeting. Why do we need to budget our
money? What are the benefits we can get in budgeting? So, now let’s answer these questions.

The Importance of Budgeting

1. It keeps you focused on your financial goal – rather than stopping you from
enjoying things, budget can help you plan. This means you could invest in the things
that you enjoy, at the same time you still have enough funds to meet your financial
obligations.

2. It keeps you aware where your money is going – budgeting prevents you from
questioning in which your money is going and offers you a clear idea of simply how
risky some spending may be for your long-term finances. This recognition motivates
you to lessen your unnecessary spending.

3. It helps you to organize spending and savings – dividing your money into
categories of spending and financial savings will help you to consistently meet saving
goals, and live on top of your expenses. This consequently means that you have
enough money for your entertainment and unexpected circumstances.

4. It provides early warnings for potential problems – budgeting gives you a wider
picture view that permits you the ability to anticipate money problems in advance and
make adjustments earlier before problem occurs.

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 So, we are done with budgeting and its importance. Now, let us discuss what is
spending and ways on how to spend wisely.

It is the act of spending money in exchange for goods

What is Spending? and services by an individual for personal use or
pleasure.

Let’s identify the difference between goods and services:

Goods are tangible. These may include products that may use (examples: clothes,
shoes, bags, and wallets) and consume (examples: cakes, fruits, water, and juices).

Services are intangible. These actions are performed by professionals that require a
skill. For example, haircuts, legal advice from an attorney or hotel room service.

Moreover, the following items may be deemed spending money for high school
students:
1. Clothing
2. Entertainment (watching movies)
3. Food (eating out, ordering pizza)
4. Public Transformation
5. Cellphone load

Now, let’s discuss ways to spend money wisely.

1. Create a budget plan – monitoring your monthly expenses helps you meet your
financial health. Write your purchases on a notebook and try to compare your
monthly spending and income. Through this you will have a clear concept if you’re
overspending your income.
2. Plan your purchase – buying something that you simply like, don’t normally lead to
a good financial decision. Making purchase without proper planning can lead you to
overspending. You can lessen your expenses by buying items that you only need.

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 3. Avoid impulse buying – you have to do your buying with a list. Impulse buying will
disrupt your budget and destroy your plans for saving money. This may leave you
with little to no money to buy things which you really need.
4. Make your own decision – you have to make your own decision when buying. Do
not depend on from a salesperson. He/she is there to sell product or service for a
commission. Decide on your own and buy only something that you need.
5. Pay cash – if you could pay cash then do it. Credits and 0% installment plans are
some causes why people overspend. These payment options will allow you to spend
your future money, which you don’t have right now.
6. Wait for sales and discounts – if you know you will need an item in the future, and
not today, it’s better to wait until it is on sale to purchase it. The money you saved
can be used to invest in the future.

After you’ve learned what is budgeting and the practical ways to spend money, let’s
tackle what is saving and its importance.

It is a process of putting aside a portion of your income for

What is saving? future use rather than spending it.

So, that is the definition of saving. Now, let us discuss the importance of saving money.
Why do we need to save money? What are the benefits we can get in saving?

Here are the five (5) important benefits of saving money:

1. It helps in emergencies – emergencies are always uncertain. It can be sudden

illness or car accident. These problems are not part of your budget since it is
unexpected. Accumulated savings are big help to alleviate situations like this.

2. It saves against sudden job loss – losing a job leave a family in enormous crisis.
The best examples are Covid-19 pandemic and the denied franchise renewal of
ABS-CBN. Due to these circumstances many people left unemployed. Saving
money is always been a wise decision on the time of sudden loss of income.

3. It limits debt – savings can be used when urgent situations occurred. It can help
you limit the amount of debt liability. It can also be used to finance certain expenses
instead of borrowing money or using credit card.

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 4. It gives financial freedom – accumulated savings can contribute to someone’s
peace of mind. It is a nice feeling to feel secure when unexpected things happen.
Knowing that you have a buffer that can be used when urgently needed.

5. It helps prepare for retirement – saving can make retirement much more
comfortable. Some retirees who rely on pension usually don’t have enough money
to provide all their needs. So, saving small portion of your income for years will give
you long-term benefits.

So, those were the benefits that we can get in saving money. Like what I’ve said, let’s
learn to save money to be prepared for unexpected things that might happen along the way.
There is a comfort in knowing here is a fund to be used when unexpected expenses arisen.

Now, let’s define investing and recognize the best ways to invest money.

It is allocating money or another resource with the expectation

What is investing?
of obtaining income or profit.

Before we discuss the best ways to invest money, let me share to you one of the biggest
financial investment scams in the Philippines.

The Kapa-Community Ministry Investment scam was one of the biggest financial

investment frauds in the Philippines. A pastor named Joel Apolinario from Bislig City was the

founder of the said investment scam. An estimated of five (5) million people joined the

community which promised to receive return. According to President Duterte, it is a clear form

of fraud since members will have to donate money to the ministry in exchange for 30% return

of investments. Additionally, Securities of Exchange Commission (SEC) recorded criminal

accusations against Kapa-Community Ministry International. President Rodrigo Duterte also

ordered the National Bureau of Investigation (NBI) to shut down Kapa on June 8, 2019. As a

result, many of Kapa members had asked the President to think through his decision to close

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 the company. Despite the prayer rallies attended by Kapa members, Duterte still ordered to

shut down the corporation without any plans of returning it.

Now, let’s discuss the best ways to invest money.

1. Invest in the stock market – stock market is the act of buying and selling stocks or
shares of company ownership. Many investors can profit from buying stocks through
selling them at higher price from their original purchase price.

2. Invest in Mutual Funds – you can invest in PAG-IBIG MP2 program. This is a
voluntary savings program that allows members to earn higher dividends based on
PAG-IBIG Fund’s annual net income. Members may claim their savings after its 5-
year maturity.

3. Invest in Savings Accounts – it means putting money in your bank account with
the expectation of acquiring interest. The interest you receive is based on your
savings account balance.

4. Invest in Physical commodities – it includes investing in jewelries like gold, silver,

and diamonds. Authentic jewelries are good investments. For it will always keep
value and never goes out of fashion.

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II. Let’s Perform & Practice

Budget Project

You have a budget of ₱1,500 to spend on the things you need and want this week.
Choose items from the word bank you want to spend your money on. You must use exactly
₱1,500.

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 Groceries Cellphone Load Dinner out with Movie date with
₱200 ₱200 friends friends
₱200 ₱200

New Clothes Supplies for a Online shopping Save

₱200 school project ₱300 ₱______
₱200

ITEM COST

TOTAL = ______
III. Let’s Connect/ Let’s Analyze

Explain how you choose to spend your money. How much money do you have left to
save? If you saved some of the money, how can it help you in the future?

Rubric

2 3 4 5 Score

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 Criteria

The essay The essay is The essay is The essay is

Focus/Main poorly focused on focused on the focused,
Point addresses topic topic and topic and purposely, and
and includes includes few includes reflects clear
irrelevant ideas loosely relevant ideas insight and
related ideas ideas

Little to no Some Effectively

Organization organization of organization Organizes organizes
and ideas to build of ideas to ideas to build ideas to build
Format an argument build an an argument a logical,
argument coherent
argument
Many errors in Contains Uses correct Uses correct
grammar, frequent grammar, grammar,
Language Use spelling, and errors in spelling, and spelling, and
and punctuation grammar, punctuation punctuation
Conventions makes reader’s spelling, and with few errors throughout
comprehension punctuation with very few
difficult errors

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

________________________________________________________________________.

IV. Let’s Answer

Instruction: Choose the letter of the best answer.

1. It is the process of overseeing one’s money to ensure a successful financial life.

a. Money Processing Systems c. Money Management Cycle
b. Money Market Account d. Money Market Graph

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 2. It includes ways to create a budget plan for your cash. To ensure that you
may continually have enough cash for the things that matters and critical to
you.
a. Budgeting c. Saving
b. Marketing d. Spending

3. It is allocating money or another resource with the expectation of obtaining

income or profit.
a. Saving c. Earning
b. Spending d. Investing

4. It is a process of putting aside a portion of your income for future use rather than
spending it.
a. Spending c. Investing
b. Saving d. Advertising

5. It is the act of spending money in exchange of goods and services by an

individual for personal use or pleasure.
a. Investing c. Budgeting
b. Spending d. Saving

V. Let’s Explore/ Let’s Create

A Salary-Based Budget Plan
In this activity you will:
• choose a potential career path
• determine your take-home pay
• identify expenses you need to pay
• and then reflect on the process of budgeting

Future Career: ____________ Monthly Salary: ____________

EXPENSES AMOUNT

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 Total
Savings

Write a reflection on the process of budgeting.

Criteria 2 3 4 5 Score

The essay The essay is The essay is The essay is

Focus/Main poorly focused on focused on the focused,
Point addresses topic topic and topic and purposely, and
and includes includes few includes reflects clear
irrelevant ideas loosely relevant ideas insight and
related ideas ideas

Little to no Some Effectively

Organization organization of organization Organizes organizes
and ideas to build of ideas to ideas to build ideas to build
Format an argument build an an argument a logical,
argument coherent
argument
Many errors in Contains Uses correct Uses correct
grammar, frequent grammar, grammar,
Language Use spelling, and errors in spelling, and spelling, and
and punctuation grammar, punctuation punctuation
Conventions makes reader’s spelling, and with few errors throughout
comprehension punctuation with very few
difficult errors

_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________.
Writer: Editor:
JERLYN JOY D. LUMAPAC GERLIE D. BORNEA
Teacher II Master Teacher I
Daniel R. Aguinaldo NHS Doña Carmen Denia NHS

Evaluator:
MAY ANN V. NABLE
Teacher III
Daniel R. Aguinaldo NHS

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REFERENCES:

Caldwell, Miriam. Reasons Why You Should Budget Your Money. May 25, 2020. Accessed
July 3, 2020.
https://www.thebalance.com/reasons-to-budget-money-2385699

Gadd, Ken. Difference between Product and Service. December 19, 2019. Accessed July 2,
2020.
https://gaddbiz.com/2019/12/difference-between-product-and-service/

Hill, Bryan. Importance of Money Management. January 26, 2019. Accessed July 2, 2020.
https://budgeting.thenest.com/importance-money-management-3204.html

Twain, Mark. Kapa & Organico – The Rise of Investments Scams. June 13, 2019. Accessed
July 3, 2020.
https://www.valueinvestingphilippines.com/kapa-organico-the-rise-of-investment-scams/

ANSWER KEY

II. Let’s Perform & Practice

❖ The following must be checked in the answers:

• Items must be placed on the table with respective cost.

• Must spend exactly ₱1,500.

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 • Put savings if there’s any.
ITEM COST

Total: _________

III. Let’s Connect/ Let’s Analyze

❖ The following must be checked in the answers:

• The student must explain how he/she spend his/her weekly allowance.
• The student who has savings must elucidate how it can help him/her in the
future.

IV. Let’s Answer

1. C 2. A 3. D 4. B 5. B

V. Let’s Explore/ Let’s Create

❖ The following must be checked in the answers:

• The student chooses a potential career path.

• The student determines his/her take-home pay.
• The student identifies expenses his/her need to pay.
• The student reflects on the process of budgeting.

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