Senior High SchoolSenior High School

Senior High School

Business Finance
Quarter 2 – Module 6 : Philosophy
and Practices in Personal Finance
Lesson 1: Money Management Philosophy
 Writer:

LEA M. BANTING

T-II Gutad National High School

Editors:
JANE P. VALENCIA, EdD – Math/
ABM Supervisor CHAIRMAN
ELSA A. LAQUINDANUM – MT- I
CHRISTINA P. SANTOS – MT I

What I Need to Know

This module was designed and written with you in mind. It is here to help you
master the Philosophy and Practices in Personal Finance. The scope of this
module permits it to be used in many different learning situations. The language
used recognizes the diverse vocabulary level of students. The lessons are
arranged to follow the standard sequence of the course. But the order in which
you read them can be changed to correspond with the textbook you are now
using.

The Module 6 contains two lessons, namely:

• Lesson 1 – Money Management Philosophy

• Lesson 2 – Money Management Cycle

After going through this module, you are expected to:

1. enumerate money management philosophies;
2. illustrate the money management cycle and gives examples of sound
practices in earning, spending, saving, and investing money.

What I Know
Multiple Choice: Read each statement carefully. Write only the letter of
the correct answer in your answer sheet.

1. It is a term that covers managing your money as well as saving and investing.
A. Decision Making C. Personal Finance
B. Financial Goal D. Short Term Goal

2. Saving money means giving up the opportunity cost to A.

apply for credit cards C. save money
B. have money in the future D. spend in the present
3. What is term for the money you earn?

A. Expense B. Income C. Interest D. Savings

4. Personal Finance is the process of planning your

A. financing B. investing C. spending D. all of these

5. In order to effectively manage money, you need a:

A. Budget C. High paying job
B. Computer D. Online checking account

6. The following are considered personal finance strategies EXCEPT:

A. Create an Emergency Fund C. Limit Asset
B. Devise a Budget D. Use Credit Cards Wisely

7. The three key principles in personal money management are:

A. assessment, prioritization, and restraint
B. assessment, control, and monitoring
C. control, prioritization and assessment
D. monitoring, assessment, and restraint

8. What percentage of your income do most financial gurus recommend saving?

A. 10% or 15% B. 10% or 20 % C. 15% or 20 % D. 15% or 30%

9. Which of the following money management principles describe frugality?

A. Large amounts matter more C. The perfect is the enemy of good
B. Small amounts matter D. You are the boss of you.

10. Practice thrift, but always be looking for Big Wins, best illustrates what principle of
saving?
A. Large amounts matter more C. The perfect is the enemy of good
B. Small amounts matter D. You are the boss of you.

11. Don’t let one slip-up drag you down also means:
A. It’s always best to be proactive C. Saving is the cornerstone of success
B. Failure is okay D. You are the boss of you.

12. Pay-Yourself-First Philosophy can be applied in:

A. creating an emergency fund C. limiting debt
B. giving yourself a break D. using credit cards

13. To make the most of your income and savings it is important to become:
A. Financial Literate C. Smart
B. Proactive D. All of these

14. Your circumstances might not be your fault, but they're your responsibility, best
illustrate what principle of money management?
A. Large amounts matter more C. The perfect is the enemy of good
B. Small amounts matter D. You are the boss of you.

15. What concept is best explained by the statement, “Trust that you'll pick up
momentum in the future”.
A. Action is the cornerstone of success C. The perfect is the enemy of good
B. Large amounts matter more D. You are the boss of you.

Lesson
Money Management Philosophy
1

The Piggy Bank is the perfect symbol for personal finance in your early years. Not
buying that new toy until you've saved up enough money is a lesson that everyone
should learn. But, does this lesson stick? Learning to prioritize is an essential part of
good money management. You should try to align your financial priorities with your
core values. You will need to set and adjust your priorities as you pass through different
phases of life (child, student, single adult, married adult, parent, empty-nester, and
retiree).

What’s In

Think of the various types of investments as tools that can help you
achieve your financial goals. Each investment type has its own general sets of
features, risk factors and ways in which they can be used by investors. Look for the
types of investments in the puzzle below. Write your answers on a separate sheet.
N I I G N S L A I

A N N U I T I E S

S S T U M D K T A

R U O I X F O S V

C R U P C C H D I

T A G J K M G F N
 T N H S F N K G G

O C D K G B M B S

S E H S D N O B Z

1.________________________ 4. _________________________
2.________________________ 5. _________________________
3._______________________

Notes to the Teacher

The teacher must take into considerations the
essential skills needed in the development of this
competency including the background knowledge which
may reinforce learning. This module will help the learners
link the gap of learning to achieve mastery of the lesson.

My Needs and Wants

Can I tell the Difference?

What’s New
List five(5) items or activities in the center column that you plan to have or to do soon.
Go back and look at each listed item or activity that takes money. Put a check mark in
the NEED or WANT column. Write your answers on a separate sheet.
NEED ITEM/ACTIVITY WANT
Was this easy for you? Why or why not?

_________________________________________________________________________________

What is It
In our society, we are bombarded daily with advertisements telling us we need the
products being advertised. As a result, many people have trouble distinguishing between
needs and wants. NEEDS are basic for your survival. WANTS are desirable to make your
life more comfortable. Money management involves managing all your resources to
achieve your goals and objectives. Your time, talents and money are some of those
resources. Knowing the differences between your needs and wants will help you manage
your money better.

What Is Personal Finance?

Personal finance is a term that covers managing your money as well as saving and
investing.

Personal Finance Explained

Personal finance is about meeting personal financial goals, whether it’s having enough
for short-term financial needs, planning for retirement, or saving for your college
education. It all depends on your income, expenses, living requirements, and individual
goals and desires—and coming up with a plan to fulfill those needs within your financial
constraints. But to make the most of your income and savings it's important to become
financially literate, so you can distinguish between good and bad advice and make savvy
decisions.

Once you've established some fundamental procedures, you can start thinking about
philosophy. The key to getting your finances on the right track isn't about learning a
new set of skills. Rather, it's about learning that the principles that contribute to success
in business and your career work just as well in personal money management. The three
key principles are prioritization, assessment, and restraint.

Ten Basic Principle of Financial Management

1. Organize Your Finances

Organizing your finances is the first step to creating wealth.

2. Spend Less Than You Earn

The best way to ensure that you either overcome debt or avoid it in the first place is
to never spend more than you make.

3. Put Your Money to Work

Take advantage of the time value of money.

4. Limit Debt to Income-Producing Assets

If you have to be in debt, stick to financing items that retain their value over time, like
real estate and education.

5. Continuously Educate Yourself

Understand why you are investing so that you will stick to your plan. Periodically
gather research so you do not miss excellent investment opportunities.

6. Understand Risk
The key to understanding return on investments is that the more you risk, the better
the return should be

7. Diversification Is Not Just for Investments

Find creative ways to diversify your income. Everyone has a talent or special skill.
"Turn your talents into a money-making opportunity

8. Maximize Your Employment Benefits

Make sure you are taking advantage of all the ways benefits can save you money by
reducing taxes or out-of-pocket expenses.

9. Pay Attention to Taxes`

We all know that any money you make is going to be taxed. That is why it is important
to consider the related tax implications for every investment.

10. Plan for the Unexpected

Despite of your best efforts, you'll face unforeseen emergencies.

Here are some personal finance principles from Money Boss website.
 ☺ You are the boss of you. Your circumstances might not be your fault, but they're
your responsibility.
☺ Nobody cares more about your money than you do. The advice that others
give you is almost always in their best interest, which may or may not be the
same as your best interest.
☺ It's always best to be proactive. In life, there are often default options. If you
don't consciously and deliberately choose something different, you get the
default.
☺ Saving must be a priority. Most financial gurus recommend saving 10% or 20%
of your income.
☺ Small amounts matter. Frugality is an important part of personal finance.
☺ Large amounts matter more. Practice thrift, but always be looking for Big Wins.
☺ Slow and steady wins the race. The most successful folks are those who work
longest and hardest at things they love to do.
☺ The perfect is the enemy of the good. Don't worry about getting things exactly
right — just choose a good option and do something to get started.
☺ Action is the cornerstone of success. Get moving. Trust that you'll pick up
momentum in the future.
☺ Failure is okay. Don't let one slip-up drag you down.
☺ Smart money management is more about mindset than it is about math.
Financial success comes when you master the mental game of money.
☺ You can have anything you want — but you can't have everything you
want.
☺ Financial balance lets you enjoy tomorrow and today. You don't have to choose
between spending today and saving for tomorrow. You can do both.
☺ It's more important to be happy than it is to be rich. Don't be obsessed with
money — it won't buy you happine

What’s More

CREDIT
CROSSROADS
Review the credit scenario below and determine the positive and negative impact the
decision may have on the person’s financial future.
Savanah has heard that opening a lot of credit card accounts is a good way to build
credit. She currently has five credit cards, but is sometimes forgetful in paying her bills
on time and usually has a balance on each card. Her favorite store is offering P 500
coupon on her next purchase, with the promise of more coupons in the future, if she
opens a credit card. She decides to open the store credit card to get the discounts.
Is this a good or bad debt move? Why? (Use a separate sheet of paper for your response).
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
 _____________________________________________________________________________________

What I Have Learned

(Write your answers on a separate sheet)

What is Personal Finance?

Enumerate the ten basic principle of money management.

1. 6.
2. 7.
3. 8.
4. 9.
5. 10.
 What I Can Do

FUTURE SPENDING

What will your life look like 5, 25, and 50 years from now? Fill in the box corresponding
to the questions below. Use a separate sheet of paper.

5 years 25 years 50 years

 How old will you
be?

Where will you live?

How will you earn

money?

How will you spend

your money?

What will be your

personal finance
philosophy?

References:
https://www.investopedia.com/terms/p/personalfinance.asp
https://www.practicalmoneyskills.com/teach/lesson_plans/grades_9_12
https://observer.com/2016/12/philosophy-of-personal-finance-101-successful-planning/
https://www.coursehero.com/file/47774721/Chapter-7-Managing-Personal-Finance-1pptx/

https://www.pdfdrive.com/search?q=philosophy+and+practices+in+personal+finance&pagecount=&pu
byear=&searchin=&em=&more=true https://riverdaletax.com/?page_id=11
https://www.quicken.com/10-basic-principles-financial-management
https://www.vertex42.com/blog/money/principles-of-personal-finance.html
 Development Team of the Module

Writer: LEA M. BANTING – T-II Gutad National High School

Editor: JANE P. VALENCIA, EdD – EPS – Mathematics
Reviewer: JANE P. VALENCIA, EdD – EPS – Mathematics
ELSA A. LAQUINDANUM – MT-I San Isidro HS, Bacolor South
CHRISTINA P. SANTOS – MT-I SVSF HS
Illustrator: LEA M. BANTING – T-II Gutad National High School
Layout Artist: LEA M. BANTING – T-II Gutad National High School
ELSA A. LAQUINDANUM – MT-I San Isidro HS, Bacolor South
CHRISTINA P. SANTOS – MT-I SVSF HS
Language Reviewer:

Management Team

ZENIA G. MOSTOLES, EdD, CESO V, Schools Division Superintendent

LEONARDO C. CANLAS, EdD, CESE. Asst. Schools Division Superintendent
ROWENA T. QUIAMBAO, CESE, Asst. Schools Division Superintendent
CELIA R. LACNALALE, PhD, CID Chief
JANE P. VALENCIA, EdD, Education Program Supervisor, Mathematics
JUNE E. CUNANAN, Education Program Supervisor/ Language Editor RUBY
M. JIMENEZ, PhD., Education Program Supervisor, LRMDS