Q2 W 2 PERSONAL FINANCE Part 2

Prayer
Checking of
Attendance
Learning Competency
Enumerate
money
management
Learning Objectives :
• Define personal finance.
• Describe the basic personal
finance principles and strategies.
• Show active class participation by
enumerating money
management philosophies
The Philosophy
and Practices in
Personal Finance
Personal Finance
• Personal finance includes all
financial decisions and
activities of an individual
including budgeting,
insurance,mortgage
planning, savings and
retirement planning.
Personal Finance
• It involves analyzing current
financial positions,projecting
short-term and long-term
funding needs, and executing
a plan to fulfill those needs
considering individual
financial constraints
Personal Finance
• It is primarily
dependent on one’s
earnings, cost of living,
and personal goals and
wants
Money Management Philosophy
Personal finance is the process
of planning and managing
personal financial activities such
as income generation, spending,
saving, investing, and protection
as cited from Corporate Finance
Institute.
Planning Ahead
People who want their finances
to be well should consider
making a plan using the following
principal viewpoint:
Planning Ahead
Focus on what matters.
Focus on what you can
control.
Focus on your future.
Personal Finance Principles
1. Prioritization
2. Assessment
3. Restraint
Prioritization
 This means that you are aware what is going on
with your finances.
 You know the source of your income and you
are doing your best to make the inflow of cash
coming in.
 You are continuously looking for additional
income source and you are firm and
determined to keep it flowing in your side.
Assessment
This means you are always willing

to venture into a new opportunity
that will improve your cash inflow
and you continuously evaluate
your current situation while
improving it to the best way
possible.
Restraint
 This means you should stop spending

money more than what you are earning.
 Self-control plays an important role in
your goals to be financially independent
and retire early.
 Make sure that your purchases will
increase your assets to help you build
your finances.
Personal Finance
Strategies and
Philosophies
Personal Finance Strategies and
Philosophies
It will be your advantage if you
begin financial planning as early as
today. It is never too late to start a
plan which will pave your way to
financial security. The following are
ideas and systems you can use for
personal finance.
Philosophies
1. Devise a budget.
2. Create an emergency fund
3. Limit debt
4. Consider your family.
5. Plan (and save) for retirement
6. Give yourself a break.
Philosophies
7. Automate your finances
8. You are responsible for your own
wealth
9. Getting out of debt is an emergency.
10.Too much frugality is a waste of time
and money.
11.Use credit cards wisely.
Devise a budget
According to Investopedia, a budget is an
estimation of revenue and expenses over a
specified future period of time and is
usually compiled and re-evaluated on a
periodic basis.
Budgets can be made for a person, a group
of people, a business, a government, or
just about anything else that makes and
spends money.
Create an emergency fund.
• You need to set aside a certain
amount of your income as your
reserve fund for emergency is needed
in case of unemployment,
hospitalization, and others.
• Financial advisors encourage us to
save 20% of our income for this
purpose.
Limit debt.
• We need to control our spending
activities to avoid debt.
• Be wise enough to live within your
means because compulsive
buying is an activity that will
bring us to unwanted debt.
Limit debt.
Below are some ways on how to avoid debt:
•
An article from Central Bank cited that if you can’t
afford it without a credit card then don’t buy it. One
good rule to live by is if you can't pay for something in
cash, then you can't afford it with a card.
•Cut out the wants, focus on the needs. You need to
live within your budget. The needs must be settled
first while the wants should be the last priority. Even
if the needs are met, saving the extra money could
help our finances to be better.
Limit debt.
Below are some ways on how to avoid debt:
Keep track of your expenses
by listing it down in the
sheet of expenses.
Limit debt.
We can also cut off or control the following
expenses if we want to increase our savings:
• cable television
• dining out
• high-speed internet
• alcohol
• cigarettes
• gym memberships
• magazine subscriptions
Consider your family
Spend time with your family and
evaluate your expenses if such
expense is a need or a want. You
must learn the value of hard-
earned money and spend it well.
Plan (and save) for retirement
• When you retire, you should
have the money to finance the
daily needs.
• It is wise to do something in order for
us to have money when we get old.
Retiring is not about age anyway.
• You can retire early
provided that we already
have the financial capacity
and our situation is just
right to call it quits.
The following are some ideas on how to
retire early in the Philippines:
Start saving seriously.
Investments are the key.
Find good health care.
Live below your means.
Give yourself a break.
• Once in a while reward yourself
for your hard work. Taking
some time out with your loved
ones, dining out together, and
going somewhere will help you
appreciate life because you are
making the best of it.
Automate your finances.
• Online payment of utility
bills like water and electricity
will help you do more. This
can also help us deal with
late payment penalties once
payment is made online.
You are responsible for your own wealth.
• Building up of wealth like cash,
properties, or assets will take time
to do. Whatever course of action
you are doing now to increase your
possessions will keep you on the
right track to reach your goal of
financial independence.
Getting out of debt is an emergency.
•There are good and bad debts. Buying new
vehicle for the purpose of doing and
supporting your business to earn more money
is on the positive side of obtaining a credit. On
the other hand, if your purpose of buying a
car is to use it to gratify mostly of your
materialistic appetite, it would not be a good
idea because you will increase your liability.
Too much frugality is a waste of time and money
Use credit cards wisely
 According to an article by Gobear
(2020), credit card is also a plastic
payment card, but one that works a
little differently.
• Your credit card will have a set limit
or balance on it that a bank can
provide and you will only be allowed to
spend within that range.
Thank you

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Prayer

This means you are always willing

 This means you should stop spending

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