FINANCIAL

LITERACY
Financial Literacy is:
 Understanding and knowing
how you can build your
personal wealth based on your
present income.
 THE REASONS
Based on studies, OFWs work abroad due
to some of the following reasons :
1. Education of their Children

2. To build a House

3. To Help the Family

4. To earn a BIGGER Income

OFWs’ REASONS
5. To Save for the Future

6. Self Development

7. To Travel and See

Other Countries.
 FACING THE REALITIES
Where does your Money go?

Pay off debt

for the trip

INCOME Others

Insurance
Premiums
Your Bank
Account

Household
Support for Expenses
Parents, Your Children’s
Relatives Education
3 Typical Budget Scenarios
I II III
Total Income $ 3,400.00 $3,400.00 $3,400.00

Less: Total Expenses 4,000.00 3,400.00 3,000.00

-------------- -------------- --------------
Balance ($600.00) - $400.00

Deficit Even Surplus / Savings

 USUAL EXPENSES / CASH OUTLAYS:
 Family Expenses (Remittance)
$1,500
 Personal Needs (Clothes, Hygiene & Beauty Products /
services, etc.)
$500
 Food
$500

 Traveling
$150

 Phonecards / cellphone
$500
 Savings
$250
 USUAL EXPENSES / CASH OUTLAYS:
 Family Expenses (Remittance)
$1,150
 Loan
$800
 Personal Needs (Clothes, Hygiene & Beauty Products /
services, etc.)
$500
 Food
$500

 Traveling
$150

 Phonecards / cellphone
$150
 Savings
$150
Needs
 Things that you must
have in order to live and
advance in your work

 Basic consumption like

food, clothing and shelter
Wants
 Things that you
would like to have
but can live without

 Non-basic items like

jewelry, cigarettes,
alcoholic beverages
 NEEDS vs. WANTS
Sipgard Dab
Pirla Soap Glutathione-L
w/ germ protection w/ moisturizer
Php 9.00 Php 19.00 Php 43.00
Php 38.00

NEED vs. WANT

 Cut-down expenses relating to the things you WANT

 Retain expenses relating to the things you NEED
Know the difference

Your Your
NEEDS WANTS
SAVINGS

Refers to the part of your disposable

income (take-home pay) that is not
spent on consumption
 Be Disciplined!

Income – Expenses = SAVINGS x

Income – SAVINGS = Expenses 
PUT SAVINGS FIRST.
Redefining Savings
It must be defined as an
EXPENSE.
It is an expense that
BUYS your FUTURE.
FINANCIAL STAGES
 Where does your
Money come from?
CASHFLOW QUADRANT
(Four ways that money may come your way)

Work for somebody else Go into business

Work for yourself Make your money

work for you
RAT RACE
CASHFLOW QUADRANT
(Four ways that money may come your way)

Work for somebody else Go into business

Work for yourself Make your money

work for you
FAST TRACK
The CASHFLOW GAME

INCOME

EXPENSES

ASSETS LIABILITIES
 CASHFLOW 1
Job or
Profession INCOME

EXPENSES

ASSETS LIABILITIES

- Larry Gamboa
Think Rich, Pinoy!
 CASHFLOW 2
Job or
Profession INCOME

EXPENSES

ASSETS LIABILITIES

- Larry Gamboa
Think Rich, Pinoy!
CASHFLOW of the RICH
Job or
Profession INCOME

EXPENSES

ASSETS LIABILITIES

- Larry Gamboa
Think Rich, Pinoy!
Negative Mindsets

 “I do not have enough money”

 “I do not have good enough
ideas”
 Distrust of people – “mandaraya
silang lahat”
 Fear of failure
We can attain FINANCIAL
FREEDOM!
In fact, we can be
RICH!!!
FINANCIAL STAGES
3
Money
At Work
2
Man & Money
At Work
1 Where are you now?
Where do you want
Man
At Work to be in the future?
Three STEPS to achieving
FINANCIAL FREEDOM:
3
Invest
2
Save
1
Plan
The FIRST STEP to achieving
FINANCIAL FREEDOM:

PLAN
Steps in Financial Planning
a. Set family goals together;
b. Set a time frame for achieving family
goals;
c. Discuss and determine how each
member will contribute to achieving
family goals;
d. Remind everyone of their commitment
from time to time; and
e. Monitor whether the family is
achieving its goal or not.
Setting-up Family Goals
Family goals are usually centered on the
ff:
a. Education
b. Housing
c. Health
d. Retirement
e. Protection/preparedness against
unforeseen events
f. Savings & Investment
 Setting a Time Frame
for Each Goal
Start by answering the following questions:
 Education - When will all the children/siblings finish high
school or college?
 Housing – When can you buy your own home or at least
make the down payment for a new home?
 Retirement – At what age do you plan to retire?
 Health and Protection – Do all the children have the
required vaccinations? Do all adults have family health
plans?
 SAVINGS & INVESTMENT – How much & until when
should you save? Where and how much to invest?
 YOUR FINANCIAL PLAN

IMMEDIATELY 2 years 10 years 20 years

TIM E LIN E
Graduation Fund for Build Dream Retirement
Child 1 House
LIF E Fund
(P 50 K) (P 5 Mn.) G O ALS (P 1 Mn.)
Funds for
Business Undertaking
(P 100 K)

• Create a timeline on when you want it to happen

• Specify amount needed
The SECOND STEP to achieving
FINANCIAL FREEDOM:

SAVE!!!
SAVINGS

Saving is a conscious and

deliberate way of setting aside
a portion of the personal
income.
OBSTACLES TO SAVINGS

Procrastination - delaying savings

or putting savings off for another
time;

Poor Spending Habits –

includes spending on
unnecessary items; impulse
buying; hedonistic lifestyle
OBSTACLES TO SAVINGS

Culture of Dependency - Being overly

dependent on others

Lack of Financial Literacy –

Spending on liabilities or items
that decrease in value over time;
not knowing how your money will
grow or work for you
The THIRD STEP to achieving
FINANCIAL FREEDOM:

INVEST
MAKE YOUR
MONEY GROW
Invest your savings in money-
making assets. MAKE YOUR
MONEY WORK FOR YOU.
 SAVE TO INVEST

 KEEPING MORE
of the money you
earn

 MAKING MORE
with the money you
keep

$ M A R T M ONE Y M E CH A NI C$
CASHFLOW of the RICH
Job or
Profession INCOME

EXPENSES

ASSETS LIABILITIES

- Larry Gamboa
Think Rich, Pinoy!
INVESTMENTS

Investment is the
commitment of funds made in
expectation of some positive rate
of return.

If the investment is properly

undertaken, the return will be
commensurate with the risk it
assumes.
 WISE INVESTMENT
Think of an affordable project:
 Start small but think big

 Person to handle (Meron / kaya ba?)

 Viability

Eventual Reintegration:
 Preparation – Acquisition /
Enhancement of skills
 Encourage Family Members in the
Philippines to learn the same skills
INVESTING IN YOUR OWN
BUSINESS
 Remember that not everyone has what it takes to run a
successful business;
 If you think that you have what it takes to become a
successful business person, then its time to plan your
business;
 Think about what business you can engage in;
 Look around you and identify business opportunities and
evaluate each options;
 Do a situational analysis; identify the strengths,
weaknesses, opportunities and threats to your proposed
business.
 BORROWING / LOAN
Never treat as source of income

 Only when necessary

 Dulot ay ka-Loan-
kutan kung hindi
kailangan
- Bulabog ng - Termination YOU’RE
FIRED!
collector