SENIOR HIGH SCHOOL

Business Finance
Quarter 4- Module 6
Personal Finance

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Business Finance – Senior High School
Alternative Delivery Mode
Quarter 4- Module 6: Personal Finance
First Edition, 2021

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Published by Department of Education

Division of Lapu-Lapu City

Development Team of the Module

Writer’s Name :Aisa V. Soroño, MBA
Editor’s Name :Rebecca P. Toring, PSDS District 5
Reviewer’s Name :Rowena G. Sagarino, Principal II
Illustrator’s Name :Aisa V. Soroño, MBA
Layout :Maria Teresa D. Amion, Librarian II
Plagiarism Detector Software :PlagiarismDetector.com
Grammarly Software :CitationMachine.com
Management Team
Schools Division Superintendent :Wilfreda D. Bongalos, Ph.D., CESO V
Assistant Schools Division Superintendent :Cartesa M. Perico, Ph.D.
Curriculum Implementation Chief :Oliver M. Tuburan, Ed. D.
EPSVR-Mathematics :Cecilia O. Arcenal
EPSVR-LRMDS :Teresita A. Bandolon
ADM Coordinator :Jennifer S. Mirasol

Printed in the Philippines by:

Department of Education – Region VII Central Visayas
Division of Lapu-Lapu City
Office Address: BM Dimataga Road, Poblacion, Lapu-Lapu City
Contact No. (032) 410-4525
Email Address: oliver.tuburan@deped.gov.ph

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 Introduction
This module was designed and written with you in mind. It is here to help you master Personal
Finance. The scope of this module permits it to be used in many different learning situations.
The language used recognizes the diverse vocabulary level of students. The lessons are
arranged to follow the standard sequence of the course. This module, although self-paced,
can even be more effective with the use of other modalities like collaborative type with other
students to apply management theories and concepts in solving business cases. This can be
done in the entire semester with the guidance of the teacher/facilitator.
The Most Essential Learning Competencies:
 enumerate money management philosophies
 illustrate the money management cycle and gives to 4 examples of sound practices in
earning, spending, saving, and investing money

The module provides one lesson, namely:

 Lesson 1: Personal Finance

After going through this module, student/s will:

1. Demonstrate an understanding of the philosophy and practices in personal finance
2. Be able to:
o identify money management philosophy
o apply basic personal finance principles and practices in earning,
spending, saving, and investing money

Pre-Test
Take the test to determine whether you have a solid background of the topic. If you
get perfect, you may skip this part and proceed to Lesson 2. If not, go through with the
meaningful learning journey of the lesson. Check your answer with the answer key at
the back portion of this module. Identify the answer to the following question.

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 Lesson 1
Personal Finance
The last chapter discussed about Investments. The different types of
investments discussed in the lesson will be divided into three groups
namely: stocks (equity), bank deposits, bonds (fixed income).

Watch this video in Youtube:

Top 10 Celebrities Who Went Broke. (2015). YouTube. Retrieved 8 May 2016, from
https://www.youtube.com/watch?v=eh3TgZ_V_S8

These people have successfully reached career peaks accompanied by huge fortune.
However, because of poor personal financial planning, they still went broke due to
overspending practices and lack of appropriate investments.

If you cannot access the video, refer to the list below:

1. Toni Braxton – earned approximately USD170 million. He was a shopaholic, diagnosed with
Angina and Lupus, and filed for bankruptcy twice.

2. Nicolas Cage – one of the highest paid actors in Hollywood, made bizarre purchases such
as castles, islands, and dinosaur skulls. He ended up with a USD14 million debt to the Internal
Revenue Service (IRS).

3. Mike Tyson – earned approximately USD300 million over his entire boxing career but got
into a divorce and various addictions, squandered his money on homes, cars, parties, and
tigers, and filed for bankruptcy in 2003.
Explain what you learned from the video. How important is Personal Finance?
(Answer must be in at least 10 sentences.)

Let’s Discuss
Have you done personal budget? How do you do it?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________

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What are your personal goals and wants at your age? Do you have the financial capacity to
fulfill them?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________

Mini Lesson

• Define Personal Finance. (Source: Investopedia - Sharper Insight. Smarter

Investing. | Investopedia. (2016). Investopedia. Retrieved 8 May 2016, from
http://investopedia.com)

• Personal finance includes all financial decisions and activities of an

individual including budgeting, insurance, mortgage planning, savings,
and retirement planning.
• It involves analyzing current financial positions, projecting short-term
and long-term funding needs, and executing a plan to fulfil those needs
considering individual financial constraints.
• It is primarily dependent on one’s earnings, cost of living, and personal
goals and wants.
Personal financial planning process.
(Source: Private Financial Design. (2016).
Privatefinancialdesign.com. Retrieved 8 May
2016, from http://privatefinancialdesign.com)

A. Objective Setting

• Quantify monetary objectives

with definite time frames.
• Prioritize objectives.
• Examine these objectives with
an individual’s resources and
limitations.

B. Data gathering

• Use surveys, questionnaires, and interviews to gather quantitative and

qualitative information from the individual.
• Quantitative – for assessing financial status (i.e. investments, cash flow,
liabilities, etc.)
• Qualitative – to identify individual’s goals and objectives, lifestyle, risk-
tolerance, etc.

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C. Data Analysis

• Analyze the individual’s financial position and cash flows.

• Review legal papers (i.e. insurance policies, trust agreements, wills,
etc.).
• Evaluate objectives vis-à-vis the individual’s resources and economic
conditions.

D. Financial Plan Recommendation

• Propose financial products.

• At this point, the individual can comment on the proposed solutions.

E. Plan Implementation

• Assist the individual in the execution of the recommended financial plan.

• Implementation may involve other entities so assist the individual in
dealing with the parties involved in the execution of the financial plan.

F. Plan Monitoring

• Review the financial plan periodically to evaluate changing market

conditions (i.e. economic conditions, taxes, interest rates, etc.).
• Evaluate the financial plan regularly to see if it effectively meets the
individual’s goals and objectives.
Six Key Areas of Personal Financial Planning.

(Source: AdvisorNet Financial — Index. (2016). Advisornet.com. Retrieved 8 May 2016, from
http://www.advisornet.com/; World’s Largest Professional Network | LinkedIn. (2016). Linkedin.com. Retrieved 8
May 2016, from https://www.linkedin.com/)

A. Financial Position

• Understanding of personal resources by checking an individual’s net

worth and cash flow.
• Net worth = assets less liabilities at a point in time
• Cash flow = expected sources of income less expected expenses within
a period (i.e. year)

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 • Helps in determining the time frame to which personal goals can
realistically be met.
• May need to answer the following questions:
• Do they have a clear understanding of their goals?
• How do they track their income, expenses, and net worth?
• What financial benefits do they get from their employer?

B. Adequate Protection

• Analysis of protection needed for unforeseen risks.

• Includes risks of liability, property, death, disability, health, and long-term
care.
• Some insurance plans enjoy some tax benefits.
• May need to answer the following questions:
• What things can they not afford to lose?
• How will they take care of their dependents?
• How have they planned for financial risks such as disability, illness, long-
term care, and death?

C. Tax Planning

• Management of when and how much taxes will be paid.

• Understanding possible tax incentives, deductions, rebates, etc. can
have a significant impact on managing personal finances given the
magnitude of taxes paid by an individual.
• May need to answer the following questions:
• How do they manage their taxes?
• How do they plan the timing of income and deductions for tax purposes?
• Are they comfortable with the tax environment applicable to them?

D. Investment and Accumulation Goals

• Planning on wealth accumulation for large purchases such as house,

educational expenses, investments for retirement, etc.
• May need to answer the following questions:
• What are their goals for wealth accumulation? (i.e. education, home,
business, retirement comfort, etc.)
• How are their current investments performing to meet their goals?
• How much will they need? When will they need it?

E. Retirement Planning

• Understanding the cost of retirement.

• Analysis of cash flows to come up with investment plans that will meet
the costs of retirement in the future.
• May need to answer the following questions:
• How are they preparing for their retirement?
• How are their liabilities affecting their retirement objectives?
• Do they think they can maintain their standard of living during their
retirement?

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F. Estate Planning

• Planning for disposition of one’s assets after death.

• Estate taxes paid to the government are huge, so avoiding these taxes
can significantly impact one’s personal finances.
• May need to answer the following questions:
• How should their assets be distributed upon death?
• How will their intentions be carried out? (i.e. will, trust, power of attorney,
etc.)

Independent Assessment

Making Generalization

Watch this video in Youtube

“Four Simple Habits for Personal Finance Success” (Patzer, A. (2009). Four Simple Habits for Personal Finance
Success --Mint Featured on ABC News Money Matters. YouTube. Retrieved 8 May 2016, from
https://www.youtube.com/watch?v=R0TznyjIZxA)

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If you cannot access the video, refer to the list below:

1. Save money – spend less than what they earn.

2. Avoid debt – manage their credit and debt wisely.
3. Invest – invest what they save.
4. Do not lose it – protect their downside by diversification or insurance.
Make a poster or slogan to generalize the thought of the video. It may be digital or
handwritten.

Application

Make your own Financial Planning Process, using the format below. Make your
examples as comprehensive as possible.
Example:

• Objective Setting – A mom wants to have PHP1 million after 10 years for her
daughter’s education.

• Data Gathering – Interview the mom to know how much savings she has and her
current sources of income.

• Data Analysis – Map the mom’s net cash flows and compute her required return to
reach her target of PHP1 million after 10 years.

• Financial Plan Recommendation – Identify stocks, mutual funds or other assets

which can generate the mom’s required return.

• Plan Implementation – Help the mom open an account so she can invest in the
recommended financial plan.

• Plan Monitoring – Check regularly whether the fund is growing as planned. Consider
other alternative assets if performance is not good.

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 Additional Activity

In reference to what you did in Application, evaluate yourself using the Six Key Areas
of Personal Financial Planning. (If it would be hard, to evaluate yourself, you may
ask your parent or someone older.)

Post Test
Enumerate the Six Key Areas of Personal Financial Planning.

a.
b.
c.
d.
e.
f.
Personal financial planning process.
a.
b.
c.
d.
e.

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Answer Key:
Pre-test:
C, E, A, B, D

Independent Assessment
D, B, E, C, A

Post Test
1.

2.

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References:
(1) Haddock, M., Price, J., & Farina, M. (2012). College Accounting: A Contemporary Approach, Second Edition. New York:
McGraw-Hill/Irwin.
(2) Valencia, E. G., & Roxas, G. F. (2010). Basic Accounting (3rd ed.). Mandaluyong City, Philippines: Valencia Educational
Supply.
https://depedcar.ph/sites/default/files/regionalMemos/rm_no._091_s.2020.pdf
https://znnhs.zdnorte.net/wp-content/uploads/2020/11/Physical-Science11_Q1_MODULE-4-1_08082020.pdf
https://www.researchgate.net/publication/344599746_Secondary_Teachers'_Preparation_Challenges_and_Coping_Mech
anism_in_the_Pre_-Implementation_of_Distance_Learning_in_the_New_Normal
https://znnhs.zdnorte.net/wp-content/uploads/2020/11/Physical-Science11_Q1_MODULE-4-1_08082020.pdf
https://www.verywellmind.com/what-is-reinforcement-2795414
https://www.slideshare.net/dionesioable/biology-m1-nature-of-biology-
25631578#:~:text=The%20lessons%20are%20arranged%20to%20follow%20the%20standard

For inquiries or feedback, please write or contact:

Division of Lapu-Lapu City

Department of Education
B. M. Dimataga St., Poblacion, Lapu-Lapu City

Contact No. (032) 410-4525

Email Address: oliver.tuburan@deped.gov.ph

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