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Module 5_Financial.pptx

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This document discusses key concepts of financial literacy including personal financial management, budgeting, and investing. It emphasizes that financial literacy is an ongoing learning process that is important to understand one's relationship with money. The document then defines budgeting and explains different types of budgets such as basic budgets, current budgets, master budgets, and functional budgets. It also covers classifying budgets based on time, condition, and flexibility. Additional topics include strategies to improve financial literacy skills, knowing one's net worth, the importance of net worth, and supplementary reading materials on budgeting and financial literacy.

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FinancialLiteracy Module 005: Week:
Learning Demonstrate an understanding of key concepts about financial literacy; Objectives: At the end of this module you are expected to: Enrich a successful awareness in the key concepts of financial literacy; Cognitive: Affective: Psychomotor: Able to discuss background knowledge about financia literacy.
Financial Literacy Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. Financial literacy is the foundation of your relationship with money, and it is a life-long journey of learning. The earlier you start, the better off you will be, because education is the key to success when it comes to money (https://www.investopedia.com).
Budgeting A budget is a quantitative plan for acquiring and using resources over a specified period. Individuals often create household budgets that balance their income and expenditures for food, clothing, housing, and so on while providing for some savings. Planning involves developing goals and preparing various budgets to achieve those goals. Control involves the steps taken by management to increase the likelihood that all parts of the organization are working together to achieve the goals set down at the planning stage.
Elements in the budget: It is a plan expressed in financial-terms for attaining some objective. It is prepared and approved before a defined time. It shows the planned income to be generated. It shows probable expenditure to be incurred. It indicates the capital to be employed during the period.
Classificationof Budget
Classificationof Budget Based on Time Long-term Budget This budget is related to the planning operations of an organization for a period of 5to 10years. Short-term Budget This budget is drawn usually for one year. Sometimes a budget may be prepared for a shorter period (like monthly budget, quarterly budget, etc.).
Classificationof Budget Based on Condition Basic Budget A budget that is established for use as unaltered over a long period is called Basic Budget. Current Budget A budget that is established for use over a short period and is related to the current conditions is called the Current Budget.
Classificationof Budget Based on Functions Master Budget Master Budget is the summary budget incorporating its component functional budgets, which is finally approved, adopted and employed. The sales budget helps determine how many units need to be produced. Production budget is prepared after the sales budget Functional Budgets functions of the business such Functional Budgets relate to as product sales etc.
Classificationof Budget Based on Flexibility Fixed Budget (or Static Budget) Fixed Budget is a budget which is designed to remain unchanged irrespective of the level of activity attained. Flexible Budget (or Sliding Scale Budget) Flexible Budget is a budget which is designed to change by the level of activity attained.
Strategies to Improve Your Financial Literacy Skills Create a Budget Pay Yourself First Pay Bills Promptly Get Your Credit Report Check Your Credit Score Manage Debt Invest in Your Future
Knowing Your Net Worth Your net worth is the amount by which your assets exceed your liabilities. In simple terms, net worth is the difference between what you own and what you owe. NetWorth Your assets are anything of value that you own that can be converted into cash. One of the challenges in calculating your net worth is assigning accurate values to all of your assets.
Why Your Net Worth Is Important? When you see financial trends in black and white on your net worth statements, you are forced to confront the realities of where you stand financially. Reviewing your net worth statements over time can help you determine 1) where you are, and 2) how to get where you want to be. This can give you encouragement when you are heading in the right direction (i.e., reducing debt while increasing assets) and provide a wake-up call if you are not on track. Spend Wisely Pay Down Debt Save and Invest
ReferencesandSupplementaryMaterials BooksandJournals: Abao, E., Alda, R., Bacus, R., Dayagbi, F., Mananay, A. (2019). Building and enhancing new literacies across the curriculum. Mutya Pubiishing House, Inc. OnlineSupplementaryReading Materials: https://www.iedunote.com/budget https://www.investopedia.com/terms/f/financial- literacy.asp#:~:text=Manage%20Debt%E2%80%94Use %20your%20budget,find%20a%20debt%2Dcounselin g%20program.

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Module 5_Financial.pptx

  • 2. Learning Demonstrate an understanding of key concepts about financial literacy; Objectives: At the end of this module you are expected to: Enrich a successful awareness in the key concepts of financial literacy; Cognitive: Affective: Psychomotor: Able to discuss background knowledge about financia literacy.
  • 3. Financial Literacy Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. Financial literacy is the foundation of your relationship with money, and it is a life-long journey of learning. The earlier you start, the better off you will be, because education is the key to success when it comes to money (https://www.investopedia.com).
  • 4. Budgeting A budget is a quantitative plan for acquiring and using resources over a specified period. Individuals often create household budgets that balance their income and expenditures for food, clothing, housing, and so on while providing for some savings. Planning involves developing goals and preparing various budgets to achieve those goals. Control involves the steps taken by management to increase the likelihood that all parts of the organization are working together to achieve the goals set down at the planning stage.
  • 5. Elements in the budget: It is a plan expressed in financial-terms for attaining some objective. It is prepared and approved before a defined time. It shows the planned income to be generated. It shows probable expenditure to be incurred. It indicates the capital to be employed during the period.
  • 7. Classificationof Budget Based on Time Long-term Budget This budget is related to the planning operations of an organization for a period of 5to 10years. Short-term Budget This budget is drawn usually for one year. Sometimes a budget may be prepared for a shorter period (like monthly budget, quarterly budget, etc.).
  • 8. Classificationof Budget Based on Condition Basic Budget A budget that is established for use as unaltered over a long period is called Basic Budget. Current Budget A budget that is established for use over a short period and is related to the current conditions is called the Current Budget.
  • 9. Classificationof Budget Based on Functions Master Budget Master Budget is the summary budget incorporating its component functional budgets, which is finally approved, adopted and employed. The sales budget helps determine how many units need to be produced. Production budget is prepared after the sales budget Functional Budgets functions of the business such Functional Budgets relate to as product sales etc.
  • 10. Classificationof Budget Based on Flexibility Fixed Budget (or Static Budget) Fixed Budget is a budget which is designed to remain unchanged irrespective of the level of activity attained. Flexible Budget (or Sliding Scale Budget) Flexible Budget is a budget which is designed to change by the level of activity attained.
  • 11. Strategies to Improve Your Financial Literacy Skills Create a Budget Pay Yourself First Pay Bills Promptly Get Your Credit Report Check Your Credit Score Manage Debt Invest in Your Future
  • 12. Knowing Your Net Worth Your net worth is the amount by which your assets exceed your liabilities. In simple terms, net worth is the difference between what you own and what you owe. NetWorth Your assets are anything of value that you own that can be converted into cash. One of the challenges in calculating your net worth is assigning accurate values to all of your assets.
  • 13. Why Your Net Worth Is Important? When you see financial trends in black and white on your net worth statements, you are forced to confront the realities of where you stand financially. Reviewing your net worth statements over time can help you determine 1) where you are, and 2) how to get where you want to be. This can give you encouragement when you are heading in the right direction (i.e., reducing debt while increasing assets) and provide a wake-up call if you are not on track. Spend Wisely Pay Down Debt Save and Invest
  • 14. ReferencesandSupplementaryMaterials BooksandJournals: Abao, E., Alda, R., Bacus, R., Dayagbi, F., Mananay, A. (2019). Building and enhancing new literacies across the curriculum. Mutya Pubiishing House, Inc. OnlineSupplementaryReading Materials: https://www.iedunote.com/budget https://www.investopedia.com/terms/f/financial- literacy.asp#:~:text=Manage%20Debt%E2%80%94Use %20your%20budget,find%20a%20debt%2Dcounselin g%20program.