Financial Literacy cum

Planning & Budgeting

by:
Gina F. Gatdula
 Why do budgeting
and planning
Budget
* is a detailed plan of operations for
some specific future period

 * a predetermined detailed plan of

action developed and distributed as a
guide to current operations and as a
partial basis for the subsequent
evaluation of performance.

 * business plan for short period of time.

 A Personal Budget

Afinancial plan which sets limits

on the amount of money that will
be spent on each category of
expenses in a given period.
 Personal Budget

 1. Gather all financial income and obligations

 2. Build the budget based on available income and
obligations and be realistic
 3. Pinpoint where you can save money and what costs can be
eliminated or at least reduced
 4. Track the actual spending and input into spreadsheet and
find the difference
 5. Reflect on why some actual spending exceeded the budget
amount
 6. Calculate cash available for investment and savings
Household-based budgeting
 It’s a spending plan. It considers a wide
range of expenses.

 Examples: Food, dress, transportation, house

repair, medicine, cellphone, internet, gifts,
shoes, eletricity, water, etc.
Cost-based Budgetting
 -it is a method of budgetting for (micro)
enterprise.

 -this is a method in which material or labour

which incur costs are accounted for.
Activity-based Budgetting

 -it is a method of budgeting for (micro)

finance.

 -this is a method in which activities that incur

costs are recorded.

 -specific expenses were broken down.

Three (3) types of budget
There are there (3) types of budget being
prepared, namely:
a. Operational budget
b. Cash budget
c. Capital expenditure budgets

But many of us are just preparing

operational budget with some having no
budget at all.
Aplanning session/conference should
be held to prepare action/work plan
for next year/period before preparing
operational budget. A work plan
usually consists of key area,
goal/objective, strategies,
target/expected output, time frame,
responsible person(s), budgetary
requirements.
 The key areas to be discussed among
others are membership, capital build
up, savings mobilization, loaning
operation, consumer operation, loan
delinquency, additional personnel,
expansion of business services, social
services, acquisition of property and
equipment, etc.
 In preparing operational budget, each
department of management staff,
committee, and the board of directors should
prepare their respective budget to be
submitted to the budget committee usually
composed of the general manager,
accountant/bookkeeper, treasurer, board
chairperson and audit committee chairperson
for compilation and consolidation. The
growth trends of revenues loan releases,
sales, and expenses for the last three (3)
years should be considered.
 In preparing operational budget, each
department of management staff,
committee, and the board of directors should
prepare their respective budget to be
submitted to the budget committee usually
composed of the general manager,
accountant/bookkeeper, treasurer, board
chairperson and audit committee chairperson
for compilation and consolidation. The
growth trends of revenues loan releases,
sales, and expenses for the last three (3)
years should be considered.
Budgeting tips
 Tip #1
 -if an expense isn’t a priority, roll it into next

month’s budget or just scrap it

 Tip #2
 -can you cut down on groceries and personal

care items?
 Tip #3
 -separate accounts/piggy banks for specific

urgent purposes
Tip #4

 To pay bills before allocating budget on any

extra activity, reserve money for important
needs.
 Tip #5
 -take cash for grocery, leave debit and credit

cards at home.
 Tip # 6
 -Stop excessive window shopping.
INFLATION

 -it is the rise in the general level of prices of

goods and services in an economy over a
period of time.
 -is an increase in the price you pay for goods
Case study
 Alakdan, 27,single, earns around Php
30,000 a month. Though he has been
working for the last 4 years, he has spent
his monthly income on car amortization
amounting to Php 18,000 a month and
purchasing of high-end gadgets, He is also
paying his credit card monthly dues. Until
now, his savings is zero. He wanted to
somehow give a portion of his income to his
mother. However, he has no savings and
will like to continue working to continue
earning a stable salary to fund his
purchases and loans.
 Cardo Dalisay, 30, single, earns
around Php 18,000 a month, he has
attended Financial Literacy Course. In
the lesson on savings, he was inspired
by the power of savings. He controls
his spending and does not buy
expensive items, Now, he manages to
save about Php 1,500.00 a month. For
last year, he has managed to save
about Php 18,000. He plans to save
continously. He eventually hopes to
start a small business for additional
income.
Thankyou and
God bless you
all!!!!!