Personal Financial
Planning
1
Many individuals only
realize the value of
financial security when
unforeseen circumstances
hit them.
2
Because of our experience
during the pandemic, many
vloggers, bloggers, and TV
personalities now promote
financial literacy.
3
People are now encouraged
to diversify their sources of
income, save enough to
cover several months of
hardships, and secure their
assets.
4
As a student, even though you
still have limited finances, you
must learn to manage your
finances. It is necessary for
attaining your overall life
goals.
5
ROADMAP TO FINANCIAL FREEDOM
Financial freedom is the financial end goal of every individual. Financial
freedom means having enough money to cover daily expenses, afford a
comfortable lifestyle, and pay all debts and obligations. It entails control
over your own money. Unfortunately, many people still do not know how
to start and achieve this.
6
ROADMAP TO FINANCIAL FREEDOM
Below is a roadmap to your financial freedom. Now, consider the
obstacles you may encounter to achieve financial freedom. Write these in
the space provided.
7
QUESTIONS TO PONDER
1. How do these obstacles affect your end goal, which is financial freedom?
2. How can you overcome the obstacles you have enumerated?
3. In what way/s does a financial plan help one achieve any financial goal?
8
At the end of this lesson, you should be able to do the following:
● Enumerate the steps in personal financial planning.
● Create a personal financial plan.
● Realize the importance of personal financial planning by
applying various money management philosophies.
9
Does financial planning guarantee the
achievement of financial freedom?
10
● the fundamental knowledge of
an individual regarding the
management and use of
FINANCIAL LITERACY
his/her money
● the basic foundation of your
relationship with money
11
PERSONAL FINANCIAL PLANNING
FINANCIAL PLANNING PERSONAL FINANCIAL
PLANNING
systematically
brainstorming ideas to setting your personal
identify possible courses of financial goals and the most
action to achieve financial feasible way to achieve them
goals
12
PERSONAL FINANCIAL PLANNING
a comprehensive document
that includes one's financial
goals, savings and
PERSONAL
FINANCIAL PLAN
investments, a list of
expenditures, and debts
13
Budgeting your funds
Students like you must learn how to save their money at an
early age. Some keep their money in piggy banks, while others
in banks. Yet, it all starts by creating a weekly or a monthly
budget—any written document that shows a list of your
possible expenses, money from your allowances, potential
investments, and when and how to pay off your debts.
14
Budgeting your funds
These are all part of your personal financial planning. A budget
can help you decide how to acquire more funds, spend your
money wisely, and save and invest in different investments for
money growth.
15
1
HOW CAN AN INDIVIDUAL USE FINANCIAL PLANNING TO
IMPROVE HIS/HER CURRENT FINANCIAL SITUATION?
Answer area
16
PERSONAL FINANCIAL PLANNING
17
PERSONAL FINANCIAL PLANNING (STEPS)
DETERMINE THE CURRENT
FINANCIAL STATUS
STEP 1 Your present financial status
will give a glimpse of your
financial needs.
18
PERSONAL FINANCIAL PLANNING (STEPS)
SET YOUR FINANCIAL
GOALS
Financial goals are essential
STEP 2 to your financial plan as they
show a clearly show what
you want to achieve in the
short- and long-term.
19
PERSONAL FINANCIAL PLANNING (STEPS)
IDENTIFY YOUR
FINANCIAL RESOURCES
Determine how and where
STEP 3 you will acquire the funds
needed to achieve your goals
via salaries or income, or
others may acquire loans.
20
PERSONAL FINANCIAL PLANNING (STEPS)
LIST DOWN YOUR
FINANCIAL STRATEGIES
STEP 4 Remember that these must
be specific, realistic,
attainable, and appropriate
for your financial goals.
21
PERSONAL FINANCIAL PLANNING (STEPS)
IMPLEMENT YOUR
FINANCIAL PLAN
The heart of the process and
STEP 5 this phase will determine if
your strategies worked out
or not and can help you
decide what to do next.
22
PERSONAL FINANCIAL PLANNING (STEPS)
ASSESS AND EVALUATE
● Assess what went right
and what needs
STEP 6 improvement.
● Financial planning should
continue as you grow
older because priorities
and goals change.
23
PERSONAL FINANCIAL PLANNING
(IMPORTANCE)
● When life surprises them,
people often get anxious as
they are unprepared for it.
● They also blame these
unforeseen events as
reasons for their financial
problems.
24
PERSONAL FINANCIAL PLANNING
(IMPORTANCE)
1. It helps people track the flow of their funds.
2. It lets people understand their current financial
standing.
3. People can organize their financial records, including
income, expenditures, and debts.
4. People can maintain discipline when using their
finances.
5. People can work to attain financial freedom.
25
MONEY MANAGEMENT PHILOSOPHIES AND
PRINCIPLES
MONEY Values and guidelines you
MANAGEMENT will use to help you maintain
PHILOSOPHIES AND discipline as you execute
PRINCIPLES your financial plan
26
MONEY MANAGEMENT PHILOSOPHIES AND
PRINCIPLES
FINANCIAL KNOWLEDGE BE RESPONSIBLE FOR
IS THE KEY. YOUR FUNDS.
27
MONEY MANAGEMENT PHILOSOPHIES AND
PRINCIPLES
FEWER DEBTS AND
MORE INCOME- DO NOT SPEND MORE
GENERATING THAN WHAT YOU EARN.
RESOURCES.
28
MONEY MANAGEMENT PHILOSOPHIES AND
PRINCIPLES
INVEST EARLY AND MAKE You can develop your own
MORE MONEY. philosophy and principles.
29
HOW DO YOUR MONEY MANAGEMENT PHILOSOPHIES
2 AFFECT YOUR FINANCIAL PLANNING? EXPLAIN YOUR
ANSWER BY PROVIDING AN EXAMPLE.
Answer area
30
The Philippines to Further National Financial Literacy
The pandemic has been an eye-opening experience. People
now consider their savings and investment practices.
According to the Bangko Sentral ng Pilipinas (BSP), the number
of people purchasing health and life insurance increased by
10.12% from 2019 to 2020.
31
The Philippines to Further National Financial Literacy
In addition, BSP estimated that only 48% of Filipinos had
savings before the pandemic, but this number increased to
almost 53%. It only shows that Filipinos are now interested in
different financial activities that benefit the whole economy of
the Philippines.
32
The Philippines to Further National Financial Literacy
In relation to this, the governor of BSP emphasized the
importance of financial literacy, especially since most Filipinos
are now transacting digitally. Integration of different digital
platforms and payment schemes in various MSMEs has been
one of the highlights of the present financial era. BSP
continuously conducts financial literacy programs that use
digital skills to boost economic resilience.
33
● Financial planning refers to the process of identifying ways and
strategies to achieve the financial goals set by an individual.
● Personal financial planning involves setting your financial goals and
identifying the possible means, including different courses of action
to acquire, spend, save, and invest funds to attain your financial
goals.
34
● A personal financial plan is a comprehensive document that includes
one’s financial goals, savings and investments, a list of expenditures,
and debts.
35
36
● The concept of money management is one of the factors to consider
when you want to implement your financial plan successfully.
Although there are different philosophies and principles in money
management, you can create one most suitable for your goals.
37
True or False.
1. Personal financial planning should always start with setting
financial goals.
True False
38
True or False.
2. Creating a personal financial plan is a crucial step to
reaching financial freedom.
True False
39
True or False.
3. In money management, one must spend more than what
he earns.
True False
40
True or False.
4. An individual needs to assess and evaluate the financial
plan he/she has prepared to ensure that the strategies
appropriately fit the goals.
True False
41
True or False.
5. There is a standard financial plan for everyone.
True False
42
Answer the following questions.
1. How can your current financial situation affect your
decision in choosing your ultimate financial goal?
Answer area
43
Answer the following questions.
2. How will you choose the possible sources of funds
appropriate for your financial goal?
Answer area
44
Assume that you are a Registered Financial Planner. Answer the
following questions in NOT MORE THAN five sentences.
Anna is a mother of two children aged 5 and 2, respectively.
Her husband is the only one working for their family, with an
annual income of ₱600,000. Based on the previous month,
their monthly expenses amounted to ₱36,000. Their household
does not have any existing loans. According to Anna, their
ultimate goal is to build a house of their own. What advice
would you give Anna regarding her possible strategies to reach
their goal as a financial planner?
45
Read the following situations. Cite one of the money management
philosophies and use it to provide sound financial advice. Aside from the
philosophies presented in this lesson, you also have the option to
develop your own.
46
Anna hired you to become her financial planner. She is a
mother of two children aged 5 and 2, respectively. Her
husband is the only one working for their family, with an
annual income of ₱600,000. Based on the previous month,
their monthly expenses amounted to ₱36,000. Their household
does not have any existing loans. According to Anna, their
ultimate goal is to build a house of their own. What advice
would you give Anna regarding her possible strategies to reach
their goal?
47
Answer area
48
Matthew is a BPO agent. Although contractual, his monthly
salary amounts to ₱35,000. He is single and has no
dependents. Because of this, he is known to be a one-day
millionaire during paydays and, afterward, acquire loans from
his colleagues, especially during month-end. All-in-all, his
liabilities summed up to ₱150,500. With his current situation,
what should be his ultimate goal? How would this goal affect
his financial health?
49
Answer area
50
