Learning Activity Sheet

Grade Level/
Subject Grade 12 BUSINESS FINANCE Quarter 2

Topic Money Management Philosophies Week 3

MELC Enumerate money management philosophies Competency 14

• Define philosophy. Duration 4 hours

Specific
• Apply money management philosophies
Objectives:
in real-life situations. Score

I. Let’s Know
Philosophy refers to the study of existence, ideas of knowledge and conduct. When
we talk about money management philosophy it is simply driven to wise money management.
It includes the way you think about money and what you do with it (Hegdcock, 2016).
Now, let us identify the various money management philosophies to give us ideas on
how to become a financially responsible person.

Figure 1. Philippine Bills

https://www.dreamstime.com/photos-images/philippines-money.html

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Here are some of the money management philosophies:

• Live within your

means

• Avoid credit card

debt

• Have an emergency
Money Management fund

Philosophies • Insure your needs

(not your wants)

• Be Pound Wise

• Don’t be materialistic

• Automate finances

• Have enough
savings

Figure 2. Money Management Philosophies

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Now, let us discuss further the various management philosophies.

1. Live within your means – you must manage your finances within your financial
capabilities. You must stick to your budget so that the sum of your expenses is less
than your income. Sticking in your budget doesn’t mean depriving yourself. It’s just
prioritizing things that are beneficial to life. Taking control of your finances is going to
be the cornerstone of achieving your financial goals.

For instance:

Monthly income: ₱20,000

Your monthly income is ₱20,000 Total expenses: ₱ 15,000
Savings: ₱ 5,000

You must spend less money than you bring in. Learning to live within your
means will help you avoid debt and achieve your financial freedom.

2. Avoid credit card debt - no person desires to fall into debt. But most expenses that let
people fall into credit card debt are uncertain expenditures which include hospital bills
and even usual expenses like groceries. Moreover, there’s nothing wrong with using a
credit card as long as you use it wisely.

Now, let’s identify the practical habits to avoid credit card debt:

• Understand terms before applying for a credit card.

• Use your credit card wisely. Stick into your budget.

• Track or check your accounts regularly.

• Pay your outstanding balance each month.

• Check your card usage.

• Reflect before buying. Avoid impulse buying.

• Make a plan before using it.

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3. Have an emergency fund – an emergency is often uncertain. Nobody knows when it
will take place. It can be a medical emergency or car accident. But one thing is for
sure, it threatens your financial well-being and causes you too much stress. Moreover,
to help your stress level down during a crisis, it is vital to have an emergency fund.

Now, let’s enumerate the reasons why you need an emergency fund.

• Medical emergency (medical bills)

• Job loss (getting laid off or being fired)

• Natural disasters (example: fires, floods, earthquakes)

• Passing of family members (burial expenses)

• Unplanned travel expenses

• Unexpected car troubles

4. Insure your needs (not your wants) – in order to prioritize needs from wants. You must
understand first the difference between the two. Needs refer to fundamental things that
are essential to survive while wants refer to something unnecessary but desired to
make a person happier.

See table below for examples:

NEEDS WANTS

Air Jewelry

Sleep Computer

Clothing Television

Shelter/House MP3 Player

Food and water Refrigerator

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5. Be Pound Wise - you need to be extremely careful about spending a large amount of
money. If you can buy a dress worth ₱500 with the same quality of the branded one which
is worth ₱1,500, grab the cheaper one. Do not spend too much money just to impress
other people or merely satisfy your wants. Always learn to value savings over products. In
the end, money saved is more beneficial to life than the branded clothing you wear that
will become uninteresting in little time.

Now, let’s recognize the practical ways to save money while shopping:

• Avoid impulse purchases

• Buy only what you’ll need

• Buy on discount/sales

• Compare price and features

• Buy inexpensive brands

6. Don’t be materialistic – purchasing material possessions won’t bring you lasting pleasure.
It may only give temporary happiness that will last for days, weeks and even months for
some. For instance, even if you will fill your closets with overflowing branded bags and
shoes, it’s never enough. For genuine happiness can only be achieved when we change
our way of life. It is about enriching our inner lives and concentrating on being more rather
than simply having more.

Now, let’s discourse few reasons why material things can’t bring genuine happiness:

• The excitement brought by new stuff will wear off.

• Genuine happiness can’t be bought in an expensive shop.

• Couldn’t probably use a bunch of stuff.

• There’s always product innovation.

• Contentment is never found in buying more stuff.

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7. Automate finances – simplify your workflow through an automated payment process. Prefer
automatic payments for your monthly bills including house and car loans, light and water
bills, internet bill, and credit cards. This not only saves your time and energy but also
avoids penalties in case of late payments.

Now, let’s enumerate the reasons why you should automate payments:

• Cost saving

• Fraud prevention

• Reduce error and duplicate payments

• Additional discounts

• Increased visibility

8. Have enough savings - it’s about accumulating enough money that you no longer need to
work. It simply means that you have to understand the reason for having a job. Working is
not all about rewarding yourself after finishing a task and purchasing unnecessary materials
to satisfy wants. But it is about earning and saving money to provide all you need in life. As
a result, enough money saved will help you live a comfortable and stress-free life today and
in the future.

Now, let’s identify ways to become financially independent:

• Craft a vision and after make a plan

• Budget your money

• Spend less than you earn

• Remove debt

• Consider your career

• Invest to generate income

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II. Let’s Perform & Practice

Wants versus Needs

Instruction: There is a big difference between the things that you want and things that you
need. Show below how you understand the difference.

I want many things, but I don’t need I need some things in order to survive.
them. Here are some things that I Here are some things that I
WANT: NEED:

____________________________ ______________________________

____________________________ ______________________________

____________________________ ______________________________

____________________________ ______________________________

____________________________ ______________________________

____________________________ ______________________________

____________________________ ______________________________

____________________________ ______________________________

____________________________ ______________________________

____________________________ ______________________________

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III. Let’s Connect/ Let’s Analyze

Smart Money Skills

Action Plan

Instruction: Complete this action plan in order to achieve your financial goals.

Enumerate the two things you can do to improve your money management skills.

1. _________________________________________________________________

2. _________________________________________________________________

Think about the main obstacles to successful money management that you face or might
encounter in the future. How will you overcome them?

1. _________________________________________________________________

To overcome this I will: ______________________________________________

_________________________________________________________________

2. _________________________________________________________________

To overcome this I will: ______________________________________________

_________________________________________________________________

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IV. Let’s Answer

Instruction: Choose the best letter that corresponds to your answer.

1. It means to accumulate enough money so that you no longer need to work.

a. automate finances c. be pound wise

b. live within your means d. have enough savings

2. It means to manage your finances within your financial capabilities.

a. insure your needs c. automate finances

b. live within your means d. have an emergency fund

3. It means to purchase material possessions won’t bring lasting pleasure.

a. live within your means c. avoid credit card debt

b. have enough savings d. don’t be materialistic

4. It refers to fundamental things that are essential to survive.

a. wants c. discount
b. needs d. income

5. It means to be extremely careful about spending a large amount of money.

a. have enough savings c. be pound wise

b. automate finances d. insure your needs

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V. Let’s Explore/ Let’s Create

My Personal Philosophy

Instruction: Compose a 50-word statement of your personal philosophy about how you will
manage your money to attain your financial goals.

Criteria 2 3 4 5 Score

The essay The essay is The essay is The essay is

Focus/Main poorly focused on focused on focused,
Point addresses topic the topic and the topic and purposeful, and
and includes includes few includes reflects
irrelevant ideas loosely relevant ideas comprehensible
related ideas insight and
ideas
Little to no Some Constructively
Organization organization of organization Have a good organizes ideas
and ideas to build of ideas to organization to build a
Format an argument build an of ideas to logical,
argument build an coherent
argument argument
Many errors in Contains Uses correct Uses correct
grammar, frequent grammar, grammar,
Language spelling, and errors in spelling, and spelling, and
Use and punctuation grammar, punctuation punctuation
Conventions makes reader’s spelling, and with few throughout with
comprehension punctuation errors very few errors
difficult

___________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

________________________________________________________________________.

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 Writer: Editor:
JERLYN JOY D. LUMAPAC MARIA ELISA B. VALDE
Teacher II Teacher III
Daniel R. Aguinaldo National High School Francisco Bustamante National High School

Evaluator:
MAY ANN V. NABLE
Teacher III
Daniel R. Aguinaldo National High School

REFERENCES:

Hedgcock, S. Philosophy of Personal Finance: Successful Planning. December 28, 2016.

Accessed August 3, 2020.
https://observer.com/2016/12/philosophy-of-personal-finance-101-successful-planning/

James, Raymond. Personal Finance Philosophies. January 4, 2017. Accessed August 12,
2020.
https://www.raymondjames.com/hesmerwealth/financial-planning-blog/2017/01/04/top-10-
personal-finance-philosophies

Zende, Preeti. Wants vs. Needs: Personal Finance Basics. April 26, 2019. Accessed August
15, 2020.
https://medium.com/datadriveninvestor/wants-vs-needs-personal-finance-basics-
565122f1c8ba

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 ANSWER KEY

II. Let’s Perform & Practice

❖ The following must be checked in the answers:

• The student must list at least 10 of his/her wants and 10 needs.

• The student must understand the difference between wants and needs.

III. Let’s Connect/ Let’s Analyze

❖ The following must be checked in the answers:

• The student must give at least 2 practical ways on how he/she can improve
his/her management skills.

• The student must give 2 main obstacles to successful money management

that he/she face or might encounter in the future.
• The student must provide a solution in each obstacle to successful money
management.

IV. Let’s Answer

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

V. Let’s Explore/ Let’s Create

❖ The following must be checked in the answers:

• The student must write a personal philosophy about how he/she can manage
his/her money to attain financial goals.

• The student must compose a 50-word statement of his/her personal

philosophy.

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