Financial Literacy

1
 Financial Literacy: Financial Freedom Vs Financial
Confidence

• Simply put, financial literacy means knowing how to handle your

money wisely. Many people struggle with financial literacy, even
as adults. This is often due to misconceptions or a lack of
understanding about what it entails.

Presentation title Oct 2023 2

 A QUICK QUESTIONNAIRE
• Is financial literacy just about knowing how to budget?
• Is it too late for me to become financially literate?
• Do I need specific maths skills to be financially literate?
• Isn't financial literacy only important for people who make a lot of money?
• Is it enough to just put my money in a savings account?

Presentation title Oct 2023 3

 Rules of Financial Lieracy
• Don’t invest in what you don’t understand.
• Debt is a powerful but deadly weapon
• Think Rich
• Develop skills to aquire assets.

Presentation title Oct 2023 4

 Financial Literacy Checklist
• Maximise earnings through a budget.
• Save to build up assets.
• Put together a diversified financial plan
• Limit expenses and Liabilities.

Presentation title Oct 2023 5

 Budgeting…
• A budget is a plan that helps you manage your money. It shows you how much
money you have, how much money you need to spend on different things, and how
much money you can save or use for other goals.

Presentation title Oct 2023 6

 Why do I need a budget?

• Track your income and expenses.

• Set and achieve your goals.
• Avoid or reduce debt.

Presentation title Oct 2023 7

 Budgeting: How do you start?

• Pencil and paper

• Printable sheets on the internet
• Spreadsheet
• Apps

Presentation title Oct 2023 8

 How do you build a budget?

• THE 50/30/20 RULE

• The 50/30/20 rule suggests that you spend 50% of your income on your needs, 30% on your wants,
and 20% on your savings. This way, you can balance your money and plan for your future.
• Step 1: Know your income
• Step 2: Calculate your needs budget
• Step 3: Calculate your wants budget
• Step 4: Calculate your savings budget
• Step 5: Write down your actual spending
• Step 6: Compare your expenses to your budget
• Step 7: Adjust your budget
Presentation title Oct 2023 9
 EXERCISE

• Discuss a budget base on the 50/30/20

rule using the discussed step.

Presentation title Oct 2023 10

 How do I balance a budget?

• Increasing your income

• Decreasing expenses
• Shifting the funds

Presentation title Oct 2023 11

 Money Personality

• Your money personality is a representation of your attitudes and habits when it

comes to dealing with money. Understanding your money personality can help you
make better financial decisions and reach your financial goals.

Presentation title Oct 2023 12

 EXERCISE:Answer each question with A, B, C, or D, and keep track of your choices.

When you receive money as a gift, you are most likely to...
A) spend it right away on something you want.
B) save it for something you need.
C) invest it or donate it to a good cause.
D) split it between spending, saving, investing, and donating.

Presentation title Oct 2023 13

 EXERCISE:Answer each question with A, B, C, or D, and keep track of
your choices.

2. When you are shopping, you are most likely to...

A) buy whatever catches your eye, regardless of the price or quality.
B) compare prices and quality, and look for discounts and deals.
C) avoid shopping unless it is absolutely necessary, and buy only the essentials.
D) have a budget and a shopping list, and stick to them.

Presentation title Oct 2023 14

 EXERCISE:Answer each question with A, B, C, or D, and keep track of
your choices.

3. When you have a financial goal, you are most likely to...
A) forget about it or give up on it if it takes too long or requires too much effort.
B) work hard and save diligently, even if it means sacrificing other things.
C) seek advice and guidance from experts or mentors, and follow their
recommendations.
D) plan and track your progress, and reward yourself for reaching milestones.

Presentation title Oct 2023 15

 EXERCISE:Answer each question with A, B, C, or D, and keep track of
your choices.

4. When you face a financial challenge, you are most likely to...
A) ignore it or hope it goes away, and continue spending as usual.
B) cut back on your expenses and look for ways to increase your income.
C) ask for help from your family, friends, or professionals, and accept their support.
D) analyze the situation and come up with a realistic and flexible solution.

Presentation title Oct 2023 16

 EXERCISE:Answer each question with A, B, C, or D, and keep track of
your choices.

5. When you think about your financial future, you are most likely to...
A) live in the moment and not worry about tomorrow.
B) have a clear vision and a detailed plan for achieving your goals.
C) be optimistic and confident that things will work out for the best.
D) be cautious and prepared for any possible risks or opportunities.

Presentation title Oct 2023 17

 Scoring…

• For each question, give yourself the following points for each answer:
• A: 1 point
B: 4 points
C: 5 points
D: 2points

Presentation title Oct 2023 18

 Result…
• Add up your points and find your money personality profile below.
• 5-9 (SPENDER)
• You enjoy spending money and living in the moment, but you may have trouble saving or planning for the future. You may also
struggle with debt or impulse buying.
• 10 -14 (BALANCER)
• You are good at managing your money and making smart decisions, but you may also be prone to stress or indecision. You may
miss out on some opportunities or experiences because of your cautiousness.
• 15-19 (SAVER)
• You are excellent at saving money and reaching your goals, but you may also be too frugal or rigid. You may neglect your present
needs or wants, or have difficulty sharing or spending your money.
20-25 (INVESTOR)
• You are savvy and strategic with your money, and you seek to grow your wealth and make a positive impact. You may also be
adventurous and willing to take risks, but you may be too optimistic or overconfident, and ignore some of your basic needs.

Presentation title Oct 2023 19

 Tips and tricks for dealing with your money personality

If you are a spender: If you are a saver: If you are an investor:

 Set aside a portion of your income for savings  Remember that it's okay to spend some of  Make sure you don't put all your money
or investments before you spend anything. your money on things that make you happy. into one investment. Save some money
 Use cash or debit cards instead of credit cards This could include hobbies, health, or
for emergencies.
to avoid overspending or paying interest. education.
 Think about what you could gain or
 Set a limit for how much you can spend on  Make sure your budget isn't too strict. Let
yourself have some fun sometimes, and make lose from your investments. Don't just
non-essential items each month, and stick to it.
changes to your budget when you need to. hope everything will work out.
 Review your spending habits and identify
areas where you can cut costs or find cheaper  Think about sharing your money with people  Remember to think about your own
alternatives. who might need it more than you do. You goals too. Don't let making money take
could give it to family, friends, or charities. over your life.
 Find other ways to reward yourself or have
fun that don't involve spending money.  Be proud of what you have and enjoy your
 Only invest in things you believe in.
money!
Don't let money make you do things
you don't think are right.

Presentation title 20XX 20

 Tips and tricks for dealing with your money
personality

• If you are a balancer:

 Relax and enjoy your money sometimes, and treat yourself to something you want
or need.
 Be ready to learn about new chances to make more money. Make sure to find out
all you can before you say "no."
 Talk to people you trust to get help, but don't forget to listen to yourself too.
 Be happy when you do well, and be proud of working hard.

Presentation title Oct 2023 21

 Loans and Debt…

Presentation title Oct 2023 22

 How to choose the best place to borrow money?

• Know what you need and want

• Know how much you have and can afford
• Know your choices and other ways
Presentation title Oct 2023 23
 Credit Score VS Credit Card

Credit Score Credit Card

A credit score is a number that helps Credit cards are a type of payment card
lenders, like banks and credit card that lets you borrow money from a bank
companies, decide whether to lend you or credit card company. You can use that
money. It's important because the borrowed money to buy things at stores,
higher your credit score, the easier it restaurants, and other places that accept
will be for you to get approved for credit cards as payment.
loans and credit cards.

Presentation title Oct 2023 24

 What is predatory lending?

• When people are in dire need for money, they may be tempted to take out a loan from a lender who
doesn't have their best interests in mind. This is called predatory lending

Presentation title Oct 2023 25

 How to recognize predatory lending

• Extremely high interest rates

• Hidden fees and charges
• Targeting vulnerable populations
• Aggressive marketing tactics
• Encouraging repeated borrowing
• Little regard for the borrower's ability to repay

Presentation title Oct 2023 26

 Which of these is a form of predatory lending…

Presentation title Oct 2023 27

 Investment and Retirements
Savings Investment

Saving means putting money aside for Investing, on the other hand, means
future use. For example, you might save putting your money into assets that can
money by keeping it in a bank account, grow in value over time. Examples of
where it remains safe and earns a little investment options include real estate,
bit of interest. Some common reasons to stocks, bonds, and mutual funds. By
save include having money for investing, you hope that the money you
emergencies, short-term goals like a new put in will grow and be worth more in
phone, or even long-term goals like the future. Investing can help you
buying a car or going to college. achieve long-term goals, like home
ownership or retirement.

Presentation title Oct 2023 28

 Savings and Investment Options…

• Bank accounts
• Certificates of deposit (CDs)
• Stocks
• Bonds
• Mutual funds

Presentation title Oct 2023 29

 How Savings and Investments Can Work Together…

• Create a budget: Track your income and expenses to see how much money you can set
aside for saving and investing.
• Establish an emergency fund: Save at least three to six months' worth of living expenses
in a bank account for emergencies.
• Set clear goals: Determine your short-term and long-term financial goals and decide
whether saving or investing is the best way to achieve them.
• Diversify your investments: Don't put all your money into one type of investment.
Instead, spread it across different types of assets to reduce risk.
• Review and adjust: Check your progress regularly, and adjust your saving and investing
strategies as needed.
Presentation title Oct 2023 30
 Scams and Fraud

Presentation title Oct 2023 31

 Tips to protect your personal information

• Shred documents with personal information before you throw them away.
• Use strong passwords for your online accounts, and don't use the same password
for everything.
• Check your credit reports regularly to make sure there are no mistakes or signs of
fraud.
• Lock your devices, like your phone and computer, with a password or fingerprint
so others can't access your information.
• Be careful about what you share online or over the phone. Don't give out your
personal information unless you're sure it's safe.

Presentation title Oct 2023 32

 Key Takeaways…
• Track your spending to improve your finances.
• Create a realistic monthly budget.
• Build up your savings-even if it takes time.
• Pay your bills on time every month.
• Cut back on recurring charges.
• Save up cash to afford big purchases.
• Start an investment strategy.

Presentation title Oct 2023 33

 Key Takeaways… contd
• Maximise your retirement contributions.
• Create savings account for periodic savings.
• Cut expenses by priortizing.
• Keep your money where it will grow.
• Create financial plans
• Always budget for your income.

Presentation title Oct 2023 34