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BUSINESS FINANCE
Quarter II – Week 6
Money Management Cycle

CONTEXTUALIZED LEARNING ACTIVITY SHEETS

SCHOOLS DIVISION OF PUERTO PRINCESA CITY
Business Finance – Grade 12
Contextualized Learning Activity Sheets (CLAS)
Quarter II - Week 6: Money Management Cycle
First Edition, 2020

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Published by the Schools Division of Puerto Princesa City

Development Team of the Contextualized Learning Activity Sheets

Writer: Yelainne C. Gabotero
Content Editor: Marie Vic C. Velasco PhD, EPS-Mathematics, Shiela M. Caab
Language Editor:
Proofreader:
Reviewer: Marie Vic C. Velasco PhD, EPS-Mathematics
Illustrator: Yelainne C. Gabotero
Layout Artist:
Management Team:
Servillano A. Arzaga, CESO V, SDS
Loida P. Adornado PhD, ASDS
Cyril C. Serador PhD, CID Chief
Ronald S. Brillantes, EPS-LRMS Manager
Marie Vic C. Velasco PhD, EPS-Mathematics
Angelica C. San Jose, PSDS
Eva Joyce C. Presto, PDO II
Rhea Ann A. Navilla, Librarian II

External Evaluator :

Division LR Evaluators:

Division of Puerto Princesa City-Learning Resource Management Section (LRMS)

Sta. Monica Heights, Brgy. Sta. Monica, Puerto Princesa City
Telephone No.: (048) 434 9438
Email Address: puertoprincesa@deped.gov.ph
Name: Grade & Section:

Lesson 1

Money Management Cycle

MELC: Illustrate the money management cycle and gives examples of sound practices in
earning, spending, saving, and investing money. (ABM_BF12-IVo-p-27)

Objectives: 1. Identify money management cycle

2. Name different Personal Financial Activities
3. Illustrate money management cycle
4. Give examples of sound practices in earning, spending, saving and investing
money

Let’s Explore and Discover

Unlocking of Difficulties

Money is the most important

thing to have and is said to
be the root of all evils. It is
being looked at differently by
people around us anywhere
and anytime. To some
people, money means
security, while to others
money is power or self-
sufficiency.

Money Cycle
A. Cycle 1 : Earn/Spend/Earn/Spend
This cycle is for individuals who are living and dependent only on the amount to be
received every payday. After receiving the amount of salary every payday, it will be spent,
and if not enough, earn some more, and spend it again.

B. Cycle 2 : Earn/Spend/Borrow/Spend
This cycle is for individuals who have an intricacy of living beyond their means due
to the difficulty of denying themselves anything. These individuals are easily confused with
wants and needs because they are convinced they deserve whatever they want and feel and
so they deserve it now. They earn money, spend all of that, then borrow more money and
spend that. As a result, they rely on credit to establish and maintain the standard of living
they feel they are entitled to or deserve.
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C. Cycle 3 : Earn/Spend/Save
This cycle is for the group who believes in saving money. One of their philosophies is
that they will and can save everything after they have taken care of their wants and needs.
However, most of the time, the money is just enough for their necessities and nothing is left
for savings. As a result, there’s rarely enough money to go around. Rarely can get this group
to get ahead and get frustrated easily because they know saving is important but don’t know
how to save.

D. Cycle 4 : Earn/Save/Spend

This cycle is for the group that understands the importance of savings. They know
the basic rule of financial security. They have arranged their priorities to put savings first.
This group earns money, saves some immediately, and budgets or spends what is left.
Saving is a priority because they understand its role in meeting short- and long-term goals
and creating financial stability. This group is also the best at budgeting. They know what
they need to live on, adjust their lifestyle when necessary, and have goals to work for. They
focus on getting out of debt or carrying minimum monthly obligations.

Personal Financial Activities

The financial activities of a person or a family are categorized as follows:

I. Earning
II. Saving
III. Spending
IV. Investing

I. Earning Money
Money doesn’t just fall out from the sky like rain when needed. To have money, there
is a need to look for a job and work for money.
➢ Wages – fixed hourly/daily rate of pay for a standard set number of hours or
days.
➢ Piece of work – this type is based on each item produced or processed.
➢ Salary – payment of work involves semi-monthly, monthly, or per annum.
➢ Commission - payment of work is paid a small “retainer” or “flat fee” plus
either a percentage of the amount of the sales generated.
II. Saving Money
Saving is a voluntary act and it doesn’t happen by accident, it involves active work
towards it. It is not easy to meet savings goals and it requires a lot of determination.
An example of savings tips that can be implemented are as follows:
➢ Arrange for an automatic saving – an automatic arrangement with the
employer’s bank for savings deposit at a fixed amount each payday.
➢ Separate Savings Account – A separate savings account with a different from
the primary checking account will help in avoiding buying unnecessary
things. This will limit access or knowing how much money is in the savings
account that keeps away to impulse buying
➢ Create Separate Bank Accounts – create separate accounts for every goal to
unleashed like a vacation savings account or car savings account. if there is
a different savings account associated with a particular financial goal, it
becomes easier to measure its progress and stay motivated.
➢ Save your Loose Change – Keeping loose change in an empty jar is a good
start of saving money and this provides an excellent way to have emergency
funds at hand.
➢ Avoid Overdraft and bounced check fees – do not issue a check without
sufficient bank balance. The money that can be saved on these fees is better
spent on productive purposes which is a sound money practice.

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III. Spending Money
Spending money in most cases can be difficult to stop, but with the right approach,
it is possible that money to spend can be saved instead.
➢ Pay in cash
➢ Track expenses
➢ Avoid impulse purchases
➢ Payment of credit card bills and other bills on time to avoid charges
IV. Investing Money
Investing money is not only for those who enjoy financial freedom. Starting investing
money at a young age will end up getting more money because of compounding rates
of return. There are some ways to start investing money, as follows:
➢ Speak to someone knowledgeable about money investments
➢ The amiliarity with the investment opportunities will lead to a fruitful
undertaking.
➢ Diversification of investment.

(Source: De Guzman, Angeles A. Business Finance for senior high school. Quezon City:
LORIMAR Publishing Inc., 2019, 126 -130)

“In building wealth, the idea of do not work for money but let your money work
for you is overpowering. In earning money, you don’t need to work for it at all
times. Just put your money in one good investment company and wait for your
money to grow without sweating.”

Let’s Practice

Directions: Match column A with the correct answer on column B. Write only the letter
of answer on the space provided before the number.

Column A Column B

____1. Earn/Spend/ A. In this cycle, they saves some immediately and budgets
Earn/Spend or spends what is left.

____2. Earn/Spend/ B. In this cycle, they will save everything after they have
Borrow Spend taken care of their wants and needs.
____3. Earn/Spend/ C. In this cycle, individuals has the intricacy of living
Save beyond their means.
____4. Earn/Save/ D. In this cycle, individuals are living paycheck to
Spend paycheck.

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Directions: Name personal financial activities in the space provided next to pictures that
describes the illustration.

In your opinion, is it necessary that all these personal financial activities must be applied?
Why or why not?
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________

Let’s Do More

Directions: Draw or cut and paste a picture from an old magazine or any prints that
represents sound practices of personal financial activity of an individual in the box
provided below.
Earning Spending

Saving Investing

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Directions: Illustrate a budget (quantified) of your family that represents one type of
money cycle in the box provided below.

1. Why did you chose that money cycle?

________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
2. What is the best cycle that an individual could apply to himself/herself? Why?

________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________

Let’s Sum It Up
Activity 1
Directions: Complete the graphical presentation below.

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 Answer Key

LET’S PRACTICE

ACTIVITY 1 ACTIVITY 2

1. D 2. C 3. B 4. A 1. INVESTING 2. SAVING 3. SPENDING 4. EARNING

LET ‘S SUM IT UP

Cycle 1 :
Earn/Spend/Earn/Spend Earn/Spend/Borrow Earning
Earn/Save/Spend

Saving
Cycle 2 :
Cycle 4 :

/Spend

Spending
Saving

Investing
Cycle 3 :
Saving
Earn/Spend/Save

References

1. Book
De Guzman, Angeles A. Business Finance for senior high school. Quezon City: LORIMAR
Publishing Inc., 2019

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