MMW FINALS (p1)

Financial literacy

Financial literacy

the confident understanding of concepts including saving, investing, and debt that leads to an overall sense of financial well

Mandell (2009) FL

the ability to use knowledge and skills to manage one’s financial resources effectively for lifetime financial security.

1. Understanding

2. Use

2 elements of Financial literacy according to Huston (2010)

Cent

a word with Latin and French origin that means "hundred,"

"percent"

means "per hundred."

EMERGENCY SAVINGS

A fund that protects you from financial shocks such as major injuries, long

RETIREMENT SAVINGS

Can you imagine anything more depressing than going broke in your old age and living on the scraps of Social Security System (SSS) or waiting (or worst, requiring) your son/daughter to give you a monthly allowance?

PERSONAL or SHORT TERM GOALS

There’s nothing wrong with taking a two

IRREGULAR EXPENSES

Some expenses are inevitable, but they don’t hit you every single month. For example, if your homeowner's insurance or car insurance bills you annually or semiannually, rather than monthly, you should budget for it every month. Birthday gifts, Christmas presents, etc.

PERSONAL GROWTH SAVINGS

The greatest investment wherein you can profit more than 100% is Investing in yourself. This fund can be used to learn a new skill, attend a seminar, subscribe to a company/site which will provide you with more knowledge.

Traditional banks

are known as Brick

Digital banks

are those that are purely online. This innovation has convinced a lot of business owners and financially

License

Both digital and traditional banks are covered by the PDIC up to P500k per depositor, and both must have a license from the Bangko Sentral ng Pilipinas. By knowing this information, we can safely say that a certain bank is legit.

traditional bank

It has different branches located across the country where it operates. You have to go to the nearest bank to make a deposit and withdraw money. These traditional banks also have their own ATMs where their clients can withdraw money instantly. They also offer online and phone banking.

Digital banks

they have no physical branches since they are purely online. Anything you need can be done at home in your underwear. smile That includes opening an account and depositing a check.

Lender or creditor

person (or institution) who invests the money or makes the funds available.

Borrower or debtor

person (or institution) who owes the money or avails of the funds from the lender

Origin or loan date

date on which money is received by the borrower.

Repayment date or maturity date

date on which the money borrowed or loan is to be completely repaid

Time or term (t)

the amount of time in years the money is borrowed or invested; length of time between the origin and maturity dates

Principal (P)

the amount of money borrowed or invested on the origin date

Rate(r)

annual rate, usually in percent, charged by the lender, or rate of increase of the investment

Interest (I)

the amount paid or earned for the use of money

Simple Interest (Is)

interest that is computed on the principal and then added to it

Compound Interest (Ic)

interest is computed on the principal and also on the accumulated past interests

Maturity value or future value (F)

amount after t years that the lender receives from the borrower on the maturity date