CHAPTER 4

3. Developing Personal Financial

Literacy

- (Guipo, Maquintura, and

Miparanum)
 • What does personal financial literacy mean?

- Personal financial literacy (PFL) gives

students the knowledge and skills needed to
make informed financial decisions, develop sound
financial habits, and manage money effectively.

Guipo, J.
• Why this financial literacy is important to us as
students?

- Financial literacy os important because it

equips us with the knowledge and skills we
need to manage money effectively. Without it,
our financial decisions and the actions we take
or don’t take lack a solid foundation for
success.

Guipo, J.
6 things to do in college to set ourself up for financial
success later on

1. Creat a budget
- The first step of course is for children to begin managing their own
money. It could be the first time a college freshman has looked at
numbers seriously.

2. Cut cost
- Contray to popular belief there are numerous ways for college
students to save money. One of the biggest ways to save money is on
transportation. Students can also save money by choosing affordable
housing options offered by many colleges. In order also to save money
on expensive textbooks, check the college library for copies that can be
borrowed.
Guipo, J.
3. Explore campus job
- Having a campus job is one way for students to cover personal expenses and help
contribute financially to their degree.

4. Avoids scams
- Companies and banks often see college students as impressionable consumers. When
getting to campus , students should be careful about the products and services that are
advertised to them.

5. Establish credit
- One of the most important financial steps that students must make is one of the hardest
is establishing a credit. It can be especially difficult for students to obtain a credit card because
they frequently have no prior financial history.

6. Prepare your path to graduation

- The highest thing that college students can do to save money in college is graduate on
time.
Guipo, J.
 Spending patterns
- Individuals have different spending patterns. Before one
can come up with a financial improvement plan.

There Two (2) common spending patterns

1. Habitual spending patterns

- occurs when one spends out of a habit when one buys tge
same item daily, weekly, or monthly.
2. Impulsive spending patterns
- occurs when one mindlessly purchase item that he or she
does not need.
Maquintura, L.
 Fixed Vs. Variable Expenses

- fixed expenses remain the same year-

round. Variable Expenses occure regularly
but the amount you pay varies.

Maquintura, L.
 Needs Vs. Wants

- Financial discipline starts with an ability to

recognize wether 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.

Maquintura, L.
 Setting Financial Goals
- the first step to managing one’s financial life. Goals maybe short,
medium, and long-term.

• Short-term goals. Can be measured in weeks and can provide

instant gratification and feedback.
• Medium term goals. Should be accomplished within one to six
months. These goals provide opportunity for reflection and
feedback and require discipline and cansistency.
• Long-term goal. Can take years to achive. This include saving
money for down payment on a home, a child college education
and retirement.
Miparanum, E.
 Developing a spending plan

- Time and effort are necessary to build a sustainable

spending plan. There three (3) easy steps for developing
your personal spending plan

1.Record- Keep record of what you spend

2.Review- Analyze the information and decided what
you do
3.Take action- Do something about what you have
written down.
Miparanum, E.
 Importance of Saving

• Emergency Bolster – you should save money to avoid going to debt

just to pay emergency situations.
• Retirement – you will need savings/ investment to take the place of
income you will no longer receive when you retire.
• Future Events – you need to save for the future events.
• 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.

Miparanum, E.