FINANCIAL LITERACY

It is core life skills in an increasingly complex world where people need

to take charge of their own finances, budget, financial choices,
managing risks, saving, cridet, and financial tranactions. Financial
literacy is the ability to make informed judgements and make affective
decisions regarding the use and management of money. Hence,
teaching financial literacy yields better financial management skills.
THE IMPORTANCE OF STARTING
FINANCIAL LITERACY WHIKE STILL
YOUNG.
National surveys show that young's adults have to lowest levels of
financial literacy as reflected in their ability to choose the right financial
products and lack of interest in undertaking sound financial planning.
Therefore, financial education should begin as early as a possible and
be taught in schools. Akdag (2003) stressed that in the recent financial
crisis, financial literacy is very early years as pre-school years. Financial
education is a long-terms process and incorporating it into the curricula
from an early ages allows children to acquire the knowledge and skills
while building responsible financial behavior throughout each stage of
their education (OECD,2005)
FINANCIAL PLAN
Kagan (2009) defines a financial plan as a comprehensive stamen of an
individual’s long-term objectives for security and well-being and
detailed saving and a thorough evaluating of the individual’s current
financial state and future expectstions.

The following are steps in creating a financial plan:

1. Calculating net worth
2. Determining cash flow
3. Considering the priorities
Five financial Improvement Strategies
Financial literacy shapes the way people view and handle money.

The following are financial improvements suggested by Investopedia as

a journey to financial literacy:
1. Identify your starting point
2. Set your priorities
3. Document your spending
4. Lay down your debt
5. Secure your financial future
 Financial Goals Planning and Setting
There are three key areas in setting investment goals for consideration:
A. Time Horizon
B. Risk Tolerence
C. Liquidity needs
D. Investment goals: Growth, income and stability
Budget and Budgeting
Budgeting is the process of creating a plan to spend money. Creating this spending plan allows one to determine in advance
whether he\she will have enough money to do the things he|she needs or likes to do.
Thus, budgeting ensures, to have enough money for the things needed and those important ones and will keep one out of
debt.

Seven Steps to Good Budgeting

The following are seven steps that mat help in attaining god budgeting .
Step 1. Swet realistic goals.
Step 2. Identify income and expenses
Step 3. Separate needs from wants
Step 4. Design your budget
Step 5. Put your plan into action
Step 6. Plan for seasonal expenses
Step 7. Look ahead
Spending
• If budget goals serve as a financial wish list, a spending plan is a way to make those
wishes a reality. Turn them into an action plan. The following are practical
strategies in setting and prioritizing budget goals and spending plan:

1. Start by listing your goals

2. Dived your goals according to how long it will take to meet each goal
3. Estimate the cost of each goal and find out how much it costs.
4. Project future cost
5. Calculate how much you need to set aside each period
6. Prioritize your goals
7. Create a schedule for meeting your goals
Invest and Investing
As a teachers, when you have save more money than what you expect at a time
of need, consider investing this money to earn more interest than what your
savings account is paying you.

There are many ways you can invest your money but consider four aspects:
1. How long will you invest the money? Time Horizon)
2. How much money do you expect your investment to earn each year?
(Expectation of return)
3. How much of your investment are you willing to lose in the short-term in
order to earn more in long-term? (Risk Tolerence)
4. What types of investment interest you? (Investment Type)
Savings
In order to get out of debt, it is important to set one money aside and
put it into a savings account on regular basis. Savings will also help in
buying things that are needed or wanted without borrowing.

Emergency Savings Fund

Start as early, setting aside a little money for emergency savings fund. If
you receive a bonus from work, an income tax-refund or earning from
additional or aside jobs, must them as an emergency fund.
10 Reason Why Save Money
With credit so easy to get, here are ten practical reasons why it is important to save money
that everyone, including teachers, must know.
1. To become financially independent
2. To save on everything you buy
3. To buy a home or a car
4. To prepare for the future
5. To get out of debt
6. To augment annual expenses
7. To settle unforeseen expenses
8. To respond to emergencies
9. To mitigate losing your job or getting hurt
10. To have a good life
Common Financial Scams to Avoid
Financial fraud can happen to anyone, including the teacher at any time. While some forms
of financial fraud, such as massive data breaches, are out of one’s control, there are many
ways to proactively get rid of financial scams and identity theft.

Here are some of the most common financial scams, along with ways to identify them early
and how to protect one’s from being victimized.

A. Phishing
B. Social Media Scams
C. Phone Scams
D. Stolen credit card numbers
E. Identity Theft
10 tips to avoid Common financial Scams
• Every year, fraud cases are getting worse, leaving countless victims in trouble and danger through data
breaches, identify theft and online scams. Unforunately, new and improved technology only gives fraudsters an
edge, making it easier than ever for scam artists to nab financial data from unsuspecting consumer.(Bell 2019).

1. Never wire money to a stranger

2. Don’t give out financial information
3. Never click on hyperlinks in email
4. Use difficult passwords
5. Never give your social security number
6. Install Antivirus and Spyware protection
7. Don’t shop with unfamiliar online retailers
8. Don’t download software from pop-up windows
9. Make sure the websites you visit are safe
10. Donate to known charities only
Financial scams among students.
Students can also be susceptible to different financials scams and fraud.
Learning how to manage finances and being aware of financial scams are
skills that every student should master.

The following are common financial scams that students should watch out
for, and learn to protect one’s identify and finances.
A. Fake Scholarships
B. Diploma mills
C. Online books scams
D. Credit card scams
Insurance and taxes
• Insurance is the contract (in a form of a policy) between the policyholder and the insurance
economy, whereby the company agrees the compensate for any financial loss of specific insured
events. In exchange for financial protection offered, policyholder agrees to pay a certain sum
money, known as premiums to the insurance company. Insurance is the best form of risk
management against uncertain loss.
• There are various types of insurance to choose from, such as life insurance, health insurance,
motor insurance, property insurance, business insurance, etc. Besides, the financial protection
derived from insurance entails tax benefit claim on the paid premiums.

The following concepts related to insurance and taxes that every teacher should know.
However, he/she should carefully analyze and critically examine well before pursuing any deal with
them.
1. Employer-Sponsored Insurance
2. Marketplace Plans
Life Insurance
• It is a type of insurance that compensates beneficiary upon the death of the policyholder.
The company will guarantee a payout for beneficiaries in exchange of premiums. This
compensation is called “death benefit”
• Depending the on the type of insurance one may have, these events can be anything
from retirement, to major injuries, to critical illness or even death.
The following are the common risk categories:
1. Preferred Pus
2. Preferred
3. Standard Plus
4. Standard
5. Substandard
6. Smokers
Benefits of Life Insurance
The following are the benefits of life insurance:
1. It pays for medical and funeral cost.
2. For financial support.
3. For funding various financial goals.
4. Acts as retirement secured conform.
5. It cover costs incurred from taxes and debt.
Types of Life Insurance
 Type Characteristic
1. Endowment It grant a lump sum after a
specified amount of time or
upon death. The policy
owner is required to pay
the premium for a
predetermined number of
years ,or until a specific age
reached.
2. Term It is the simplest form of life
insurance to obtain, in
which upon death, the
beneficiaries are paid with
the benefit.
Advantage Disadvantage
It allows for a saving up It requires a higher
purposes. premiums than other types
of life insurance.
It guaranteed returns upon
maturity. It is not the best option for
those looking at full life
It offers some form of protection.
insurance coverage.
It entails low premium It has no benefit if
requirements. policyholder outlives the
term period set.
It is a strong option for
policyholders who need Premiums usually get
insurance but cannot higher upon renewal of
afford whole life or terms.
endowment.
It easy to understand.
3. Whole Life It provides coverage for It offers permanent It requires higher
the policyholder’s entire protection for full life or premiums.
life until they reach 100 100 years.
years old. It acts both as
protection and savings It is flexible in terms of
mechanisms since a payments of premiums.
portion of the premium is
allocated to build up cash It entails fixed premiums.
values.
It is usually comes with
additional features and
“living” benefits.
3. Variable Universal Life It serves as both life It takes dual purpose: Life Cash values and
(VUL) protection and insurance plus dividends are not
investment vechicle in investment tool. guaranteed.
one package. A portion of It has no maturity age. Face amount and death
the premium is allocated The cash value is payable benefit are dependent on
into various investment along with the assured investment performance.
vechicles for the sum. It includes various
purposes of wealth The death compenent is investment fees.
creation. The contract’s not limited to face value.
earnings are based on It depicts liquidity,
the performance of wherein funds can be
selected investments. accessed in times of need
and can serve as
emergency funds.
FINANCIAL STABILITY
• Being financially stable means confidence with the financial situation, worries
paying the bills because of available funds, debt-free, money savings for future
goals and enough emergency funds.

• Financial stability is not about being rich but rather more of a mindset. It is living
a life without worrying about how to pay the next bill, and becoming stress-free
about money while focusing energy on other parts of life (Silva, 2019).
10 STRATEGIES IN REACHING
FINANCIAL STABILITY
• Just like any goal, getting the finances stable and becoming financially
successful requires the development of good financial habits. Babauta
(2007) suggests 10 habits toward financial stability and success.

1. Make savings automagical

2. Control your impulsive spending
3. Evaluate your expenses and live frugally
4. Invest in your future
5. Keep your family secure
6. Eliminate and avoid debt
7. Use the envelope system
8. Pay bills immediately
9. Look to grow your net worth
Signs of Being Financially Stable
• Rose (2019) presents some signs of a financially stable person
1. Your never overdraw your checking account.
2. You don’t lose sleep over finances.
3. You use credit cards for convenience and rewards but never out of
necessity.
4. You don’t worry about losing your job.
5. You pay your bills ahead of time.
6. People ask your opinion about financial matters and you inspire
them.
7. You’re generally happy with your financial situation.
8. You finance your cars over five years or less if you take loans at all.
9. You contribute more to your retirement.
10. You don’t feel guilty when you’re out for special occasions.
11. You can afford to buy the things you really want.
12. Recreational spending doesn’t appeal to you .
13. You’re a natural saver.
14. You’re generous with money when it comes to charities or helping
others.
15. You’re confident about your future.
16. Your net worth grows significantly from year to year.
17. You consistently live beneath your means.
19. You could survive for months without a paycheck.
20. You feel in control of your finances and never dominated by them.
Integrating Financial Literacy into the
Curriculum
Financial education in shools should be part of a collaborative national
strategy to ensure relevance and long term sustainability. The
education system and profession should be involved in the
development of the strategy.

In support, Barry (2013) underscored that financial literacy has a wide

repercussion outside the family circle and more precisely, the school.
Hence, administrators and professors need to develop a curriculum that
would provide students insights on having the value of financial literacy
including the effect it can bring them.
Financial education should ideally be a core part of the school
curriculum. It can integrated into other subjects like mathematicsm,
economic, socisl studies, technology, home economics, values
edycation and others.