Republic of the Philippines

NORTHERN ILOILO STATE UNIVERSITY

Directions: Fill-in the following coins with concepts on financial literacy related to
budgeting, spending, investing and saving. Then, cite the reasons why we need to have
them and also ways in applying or practicing them. You may write explanations on the
spaces below the coins.
Budgeting Spending

Why: “Needs vs. Wants” principle. This concept could help you distinguishing
Why: One concept related to budgeting is the “ Envelope System”. between your needs and your non-essential desires ( wants) as you manage
Wherein it is a method where you allocate cash into different your money.
envelope for different spending categories such for groceries,
transportation, bills, etc. With the different envelops represent a
specific expenses. This system could help you to stay within your
budget, control your spending and could avoid you overspending.

How: The first one is create your spending categories such for How: The first thing you should do is identify your needs which is necessary for
groceries, transportation, bills, shopping, etc. Then, determine how your survival and well being such food, shelter, clothing, and healthcare. Then
much money you want to put on each category, putting some differentiate your wants these include the things that you least needed. After
amount of cash into separate envelops labeled with the categories identifying between your needs and wants, create a budget ensuring that you
you determine. When you need to spend something on a particular meet or buy first what you need rather than your wants. Before buying
category you only spend the cash corresponds on the envelop and something, ask yourself if it is essential for our well being or it is just your wants.
nothing more. Keep track your expenses and the amount of money
remaining on the envelope this could help you avoid overspending.
 Republic of the Philippines
NORTHERN ILOILO STATE UNIVERSITY
NISU Ajuy Campus, San Antonio, Ajuy, Iloilo
Reg. No. 97Q19783

Investing Saving

Why: “Diversification”, diversification is spreading your investments Why: “ Budgeting” is a plan of how you will spend and save your
across different asset, classes, industries, etc., to reduce the risk and money. This will help you to track your expenses and ensuring of using
increase the positive returns. It is like not putting all your eggs in one your money wisely.
basket.

How: First off all you must understand the word diversification, it is a How: first calculating your total monthly income and listing your
strategy of investing in a variety of assets, such as stocks, real estate, expenses including necessities. Next is set a financial goals such building
etc., to reduce the risk of any single investment performing poorly. an emergency found. Make sure your expenses do not exceed in your
Next, allocate your investment across different asset, such invest in income. Stay your budget and align with your financial goals. Be mindful
different sector of economy. Identify investment types by including mix on spending and avoid impulse purchase that could derail your budget.
growth oriented assets such stocks to balance risk and return potential.

EXPLANATIONS
Financial literacy refers on having a knowledge and skills on effectively managing
finances. Involving understanding in basic financial concepts, such budgeting, spending, saving,
and investing.
The envelope system is related in budgeting as it provides a visual representation of the
budget and helps to limit your spending on the appropriate cash on each category you provide.
Practicing this, encourages you to be more conscious of your spending habits and ensures to
prioritize your expenses based on what you need and your financial goals. By spending
adapting the “Needs vs. Wants” principle, you can prioritize better your finances, ensuring
needs are met and avoid over spending on the unnecessary thing. This concept helps you to be
more careful on making decisions about where to spend your money and as well as managing
your resources. Diversification is a strategy in investing that can help to improve and manage
the risk of your investment. By implementing this you can build more investment that aligns
with your financial objectives and risk tolerance. Budgeting plays a significant role in savings as
it helps you to manage your money effectively, control your savings and allocate funds towards
your goals in saving. Practicing budget can take control of your finances and prioritize your
savings.
Submitted by:
 Republic of the Philippines
NORTHERN ILOILO STATE UNIVERSITY
NISU Ajuy Campus, San Antonio, Ajuy, Iloilo
Reg. No. 97Q19783

Ellen S. Diane
Danica Liboon
Befe P. Ciudad
Danyca Sta. Rita
Saraj Jane Y. Franco
Swellyn Kate Serrano
Riza Gamalinda
Niljoy Cana
Tereso Villabeto

Same groupings will be used in answering this activity.