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Ed. 110 – Building and Enhancing New Literacies Across the Curriculum

Indicative Content

Explore
Lesson 1 The Benefits of Financial Literacy
Module 1 Lesson 2 Financial Literacy in the Philippines
Lesson 3 Developing Personal Financial Literacy
Enhance
Reflect
Evaluate

LEARNING OUTCOMES
On completion of this lesson, one should be able to
1. define financial literacy:
2. assess level of personal financial literacy using set of standards and
questions;
3. characterize financial literacy in the Philippines; and
4. start practical steps to develop personal financial literacy

EXPLORE
The National Endowment for Financial Education defines financial literacy as
"the ability to read, analyze, manage, and communicate about the personal financial
conditions that affect material well-being. If include: the ability to discern financial
choices, discuss money and financial issues without (or despite) discomfort, plan for the
future, and respond competently to life events that affect every day financial decisions,
including events in the general economy" (Incharge Education Foundation, 2017). To put
it simply, it is "the ability to use knowledge and skills to manage one's financial resources
effectively for lifetime financial security" (Mandell, 2009). Meanwhile, Hastinas et al.
(2013) refers to financial literacy as:
1. knowledge of financial products (e.g., a stock Vs. a bond, fixed vs. adjustable
rate mortgage);
2. knowledge of financial concepts (e.g., inflation, compounding. diversification,
credit scores);
3. having the mathematical skills or numeracy necessary for effective financial
decision making; and
4. being engaged in certain activities such as financial planning.
Public and private institutions alike have recognized the need for financial literacy
to be incorporated in the school curriculum. Financial education and advocacy programs
of the public and private sectors have been identified as key areas in building an
improved financial system in the Philippines (Go, 2017). Republic Act 10922, otherwise
known as the "Economic and Financial Literacy Act" mandates DepEd to "ensure that
economic and financial education becomes an integral part of formal learning."
The Council for Economic Education, the leading organization in the United
States that focuses on the economic and financial education of students from

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Kindergarten through high school developed six standards gearing toward deepening
students' understanding of personal finance through an economic perspective. The
standards and key concepts are summarized in the table below.
Standards Key Concepts
 Income earned or received by people
 income different types of jobs as well as different forms of
income earned or received
Earning  benefits and costs of increasing income through the acquisition of
income education and skills
 government programs that affect income
 types of income and taxes
 labor market
 scarcity, choice, and opportunity cost and services
 factors that influence spending choices, such as advertising, peer
pressure, and spending choices of others
 comparing the costs and benefits of spending decisions
Buying  basics of budgeting and planning
goods  making a spending decision payment methods, costs, and benefits
of each
 budgeting and classification of expenses
 satisfaction, determinants of demand, costs of information search,
choice of product durability
 the role of government and other institutions in providing
information for consumers
concept of saving and interest
how people save money, where people can save money, and why
people save money
the role that financial institutions play as intermediaries between
savers and borrowers
the role government agencies such as the Federal Deposit
Insurance Corporation (FDIC) play in protecting savings deposits
role of markets in determining interest rates
Saving the mathematics of saving
the power of compound interest
real versus nominal interest rates
present versus future value
financial regulators
the factors determining the value of a person's savings Over time
automatic savings plans, "rainy-day" funds
saving for retirement
 concept of credit and the cost of using credit
 why people use credit and the sources of credit
Using  why interest rates vary across borrowers
Credit  basic calculations related to borrowing (principal interest,
compound interest)
 credit reports and credit scores
 behaviors that contribute to strong credit reports and scores
 impact of credit reports and scores on consumers
 consumer protection laws

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 concept of financial investment |

 variety of possible financial investments
 calculate rates of return
Financial  relevance and calculation of real and after-1ax rates of return
Investing  how markets cause rates of return to change in response to
variation in risk and maturity
 how diversification can reduce risk
 how financial markets react to changes in market conditions and
information
o concepts of financial risk and loss
o insurance (transfer of risk through risk pooling)
Protecting o managing risk
and Insuring o identity theft
o life insurance products
o how to protect oneself against identity theft

The Benefits of Financial Literacy

One's level of financial literacy affects one's quality of life significantly. It
determines one's ability to provide basic needs, attitude toward money and investment, as
well as one's contribution to the community. Financial literacy enables people to
understand and apply knowledge and skills to achieve a lifestyle that is financially
balanced, sustainable, ethical, and responsible.
Increased personal financial literacy affects one's financial behaviour. These
changes in behaviour pay dividends to society as well. People who work, spend, save,
borrow, invest, and manage risk wisely are less likely to require a government rescue.
Financial literacy does not totally eliminate the need for a social safety net because even
the most prudent individual can encounter financial difficulties. But taking responsibility
for one's financial life cultivates proper decision-making skills and discipline. Most of the
responsibility for managing financial matters rests with the individual. That responsibility
is easier for adults to bear when they have learned the basics of personal finance in their
youth.
Financial Literacy in the Philippines

In his article "State of Financial Education in the Philippines," Go (2012 indicated

several findings of researches with regards to the state of financi literacy in the country
including the following:
1. World Bank study in 2014 estimated 20 million Filipinos saved mone but
only half had bank accounts.
2. Asian Development Bank (ADB) study in 2015 revealed that PH does not
have a national strategy for financial education and literacy.
3. In 2016. Bangko Sentral ng Plipinas (BSP) released the national strategy for
financial inclusion, stating that while institutions strive to broaden financial
services, financial literacy should also complement Such initiatives.
4. As per Standard & Poor's (S&P) Ratings services survey last year, only 25%
of Filipinos are financially literate. This means that about 75 million Filipinos

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have no idea about inflation, risk diversification, insurance, compound

interest, and bank savings.
5. Ten years after discovery of the stock market, still less than one percent of PH
population is invested in it.
6. More than 80 percent of the working middle class have no formal financial
plan.

Because of these findings, public and private sectors alike have recognized the
need to strengthen financial education in the country. Last November 27-28, 2018, more
than 1,000 leaders, decision-makers, influencers, and representatives from public and
private institutions, civic society, and the academe gathered for the first ever Financial
Education Stakeholders Expo organized by BSP. The Expo is designed to build an
organized network of players that share the vision of a financially literate citizenry and
cohesively implement a variety of initiatives to achieve his vision. This is in line with the
BSP advocacy for financial education and Supports the BSP mandates of maintaining
price stability, financial stability, and efficient payments system. It is the BSP's
conviction that a financially educated Filipino is an empowered Filipino who is able to
make wise financial decisions that positively impact personal financial circumstances,
and, consequently, contribute to inclusive and sustained economic development.
The Expo supports Republic Act No. 10922 which designates second week of
November as Economic and Financial Literacy Week. It is also aligned with the
objectives of the Philippine National Strategy for Financial Inclusion. particularly the
pillar on Financial Education and Consumer Protection.

Developing Personal Financial Literacy

One's attitude about money is heavily influenced by the parents' attitude and
behaviour about money. The attitudes you formed early in life probably affect how you
save, spend, and invest today. Do you behave similarly or differently from your parents
about handling money?
There are six major characteristic types in how people view money (Incharge,
2017).
Frugal: Frugal people seek financial security by living below their means and
saving money. They rarely buy luxurious items; they save money instead. They save
money because they believe that money will offer protection from unprecedented events
and expenses.
Pleasure: Pleasure seekers use money to bring pleasure to themselves and to
others. They are more likely to spend than to save. They often live beyond their means
and spend more than they earn. If they are not careful and do not change, they may fall
into deep debt.
Status: Some people use money to express their social status. They like to
purchase and "show off" their branded items.

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Indifference: Some people place very little importance on having money and
would rather grow their own food and craft their own clothes. It is as if having too much
money makes them nervous and uncomfortable.
Powerful: Powerful people use money to express power or control Over others.
Self-worth: People who spend money for self-worth value how much they
accumulate and tend to judge others based on the amount of money they have.
Which characteristic closely resembles your attitude about money? Explain your
answer.
Spending Patterns
Are you prudent or have you been accused of spending money lavishly? Or are
you somewhere in between? Individuals have different spending patterns. Before one can
come up with a financial improvement plan, one needs to analyze his/her spending habits.
There are two common spending patterns: habitual spending and impulsive spending.
Habitual spending occurs when one spends out of a habit, when one buys the same item
daily, weekly, or monthly. Daily items may include water, rice, and cup of coffee. Week
items may be grocery items. Monthly items are the electricity and Internet bills.
Impulsive spending occurs when one mindlessly purchases items that he or she does not
need. Many people are offen enticed by monthly sales at the malls with the attitude that
they may lose fhe items the following day.
Fixed vs. Variable Expenses
Fixed expenses remain the same year-round. Car payment is an example. Variable
expenses occur regularly bur the amount you pay varies. Electric and gas bills are
examples of these.
Which expenses are fixed and which are variable? Indicate the monthly Total. Put
a check mark on the corresponding type.
Monthly total Fixed Variable
Food
Clothing
Gas
Medicine
Internet

Needs vs. Wants

Financial discipline starts with an ability to recognize whether expenses are needs
or wants, and followed by ability to prioritize needs over wants. Needs are essential to our
survival. Wants are things that you would like to have but you can live without. Such as
new clothes or a new cell phone model. You want them but do not necessarily need them.
Too many wants can ruin a budget.
Needs Wants

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Enhance
Here are practical steps you can undertake to enhance your financial literacy.
Setting Financial Goals
Setting financial goals is the first step to managing one's financial life. Goals may be
short, medium, and long-term. Short-term goals can be measured in weeks and can
provide instant gratification and feedback. "I will ride on the LRT instead of taxi" and "I
will bring lunch every day" are examples of short-term goals. Medium-term goals should
be accomplished within one to six months. These goals provide opportunity for reflection
and feedback and require discipline and consistency. Long-term financial goals can take
years to achieve. These include saving money for a down payment on a home child's
college education, and retirement. They may also include paying off a car, student loans,
or credit card debt.
Developing a Spending Plan Time and effort are necessary to build a sustainable
spending plan. Three easy steps are proposed below when developing your personal
spending plan:
1. Recording- Keep a record of what you spend.
2. Reviewing - Analyze the information and decide what you do.
3. Taking action- Do something about what you have written down
Importance of Saving
Because no one can predict the future with certainty, we need to save money for
anything that might happen. Here are some reasons why saving is important
Emergency Bolster. You should save money to avoid going to debt just to pay
emergency situations, like unexpected medical expenses and damages caused by
calamities or accidents.
Retirement - You will need savings/investments to take the place of income you
will no longer receive when you retire.
Future Events - You need to save for future events like weddings, birthdays,
anniversaries, and travels so as not to sacrifice your fixed expenses.
Instability of Social Security- Pensions from social security should only serve as
Supplementary and not the primary source of income after retirement. A Little Goes a
Long Way -Small consistent savings go a long way.
There are two ways to save:
1. save before you spend: and
2. save after you spend wisely.
In order to stick to the savings habit, you should:
1. commit to a month;
2. find an accountability partner;
3. find a savings role model who is successful with his/her money, through tried
and true savings;
4. write your goal down and track it; and
5. avoid tempting situations (don't go to the mall to "hang out").

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Reflect
Wrap Up
 Financial literacy is the ability to Use knowledge and skills to manage one's
financial resources effectively for lifetime financial security.
 Financial literacy enables people to understand and apply knowledge and skills to
achieve a lifestyle that is financially balanced, sustainable. ethical, and responsible.
 One's attitude about money is heavily influenced by the parents' attitude and
behaviour about money.
 Standards for developing understanding of financial literacy include earning income.
buying goods and services, saving. Using credit, financial investing. protecting, and
insuring.

Questions to Ponder
On your own, read the questions and instructions carefully. Write/type your answer
on a long size bond paper and submit it or place it in a box provided at the CapSU CoEd
Building.
Questions
1. How well do you understand personal finance concepts?
Rate your knowledge below
4: Above Average 2: Limited Knowledge
3: Average Knowledge 1: No Knowledge
2. Financial literacy requires skills to aid you in making responsible and ethical
financial decisions. These skills include being able to set goals, create and keep
current a budget, formulate a spending plan, and keep organized records. Think
about your overall skills in those mentioned and mark where you feel your overall
skills level is.
4: Above Average Skill 2: Limited Skill
3: Average Skill 1: No Skill
Behaviour is applying what you learn to bring positive impact. Positive financial
behaviour brings numerous benefits. Paying bills and debts on time and making
3. regular deposits in savings account are positive financial behaviours.
Rate your ability to practice positive financial behaviour.
4: Above Average Ability 2: Limited Ability
3: Average Ability 1: No Ability
How does your budget pie look like? Using the following categories, map your
budget plan using a pie. You may add more categories as needed.
4. a. Housing c. Internet e. Debt g. Transportation
1. b. Electric bills d. Food f. Education

Ideal Budget Current Budget

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Evaluate

As a team, read the questions and instructions carefully. Write/type your

answer on a long size bond paper and submit it or place it in a box provided at the
CapSU CoEd Building.

Questions
1. Differentiate among the following financial goals:
a. short-term
b. medium term, and
c. long-term financial goals.
2 Give at least 2 examples for each.
3 Interview at least 2 friends, 2 classmates, and 2 relatives. Explore their financial
behaviour or spending and saving behaviour and present data using any of the
following forms:
a. infographic b. meme c. cartoon

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INDIVIDUAL/and/or TEAM WRITTEN OUTPUT

Significant Points to Remember:

A. Individual:
A. Individual:
1. Be guided with the attached rubrics. This will be the basis in rating your answers.
2. You are expected to follow the stated questions or tasks required.
3. Answers are found in the lecture notes, however other sources of information can be
considered as long as references was reflected in the answer sheets.
4. All written outputs either individual or team will be submitted at the CoEd building
and to be placed in a box intended for our course Ed.110 .

B. Written output by team/dyad/triad.

2. A plus factor of 5 points will be added to the total scores if the team showed
collaboration, cooperation and active involvement in accomplishing the group output.
3. As a team, each member will be given the opportunity to be a leader. Therefore,
member number 1 will be the leader of the first task and others will follow.
4. Assign tasks of topics for each member.
5. Document your interactions/ conversations through messenger group chat. It must
be reflected as evidences.

Questions to Ponder (Personal/ Individual written output)

On your own, read the questions and instructions carefully. Write/type your
answer
on a long size bond paper and submit it or place it in a box provided at the CapSU
CoEd
Building.
1. Are you more of a listener or a talker? Which social skill/s do you think you
need to develop? In what ways can you develop it/them

2. If you were a parent at this time, what would you teach your children on
social literacy? How would you teach them?

3. If you were an employer, what would you look for in aspirants or applicants
fo your company?

4. How do teachers educate children of social literacy nowadays? What specific content
and learning experiences are there in the curriculum that develop social literacy?

Evaluate (Team written output)

As a team, read the questions and instructions carefully. Write/type your answer on
a
long size bond paper and submit it or place it in a box provided at the CapSU CoEd
Building.
1. How do computer technology and social media affect your social skills and that of
your
peers? Cite positive and negative impacts of digital technology to communication.

2. Make a list of Dos and Don'ts in the school and the workplace in relation

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to social literacy. Present it creatively through an infograph.

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