FINANCIAL

LITERACY
A SERVICE LEARNING INITIATIVE
TOPICS WE COVER TODAY
1. Introduction to money
2. Types of income
3. Types of expense
4. Need and want
5. Managing Debt
6. Financial Responsibility and Planning
7. Fraud Prevention and OTP Scams
Introduction To
Money
 WHAT IS MONEY ??
Money is anything that people generally accept as
payment for goods and services. It serves as a medium
of exchange and a store of value.
Why do we need money?
It's easier to trade : Imagine you want to trade your toy car
for a video game. With money, you can just sell your car for
money, and then use that money to buy a game.
It tells us how much things cost : Money helps us know
how much something is worth. Known as Price Tag.
We can save it for later : Money can be kept for later use.
There are two main kinds of money:
Real money : This is money that has value because it's
made of something valuable, like gold or silver.
Paper money : This is money that has value because the
government says it does.
 Remember:

Money is a tool that helps

us trade and buy things. It's
important to use money
wisely!
TYPES OF
INCOME
WHAT IS INCOME ??
Income is the money you earn.
There are several different
types of income:
Earned Income : This is money you earn from working.
Salary: A fixed amount of money you earn
each month or year.

Wages: The amount of money you earn

per hour or day.

Tips: Money you receive from customers as

a reward for good service.

Commission: A percentage of sales that

you earn
Investment Income : This is money you earn from investing
your money.

Interest: Money you earn on savings accounts,

bonds, or certificates of deposit.

Dividends: A portion of a company's profits that

is paid to its shareholders.

Capital gains: The profit you make when you

sell an investment for more than you paid for it.
Passive Income : This is income you earn without actively
working.

Rental income: Money you earn from renting

out property.

Royalty income: Money you earn from licensing

your intellectual property, such as books or
music.

Business income: Money you earn from owning

and operating a business.
 Government Benefits

Social Security: A government program that provides

retirement benefits to eligible individuals.
 Government Benefits

Unemployment Benefits: Temporary financial assistance for

individuals who have lost their jobs.
 Government Benefits

Disability Benefits: Financial assistance for individuals who are

unable to work due to a disability.
TYPES OF
EXPENSES
WHAT IS EXPENSES ??
Expenses are costs that you incur. They are the money you
spend on goods and services.
 Fixed Expenses
Rent or Mortgage: The cost of housing.
 Fixed Expenses
Car Loan or Lease Payment: The cost of owning or
leasing a vehicle.
 Fixed Expenses
Insurance Premiums: The cost of insurance, such as
health insurance, car insurance, or home insurance.
 Fixed Expenses
Subscription Fees: The cost of subscriptions, such as
streaming services, gym memberships, or magazine
subscriptions.
 Variable Expenses
Groceries: The cost of food.
 Variable Expenses
Utilities: The cost of electricity, gas, water, and other
utilities
 Variable Expenses
Transportation: The cost of fuel, public transportation,
or car maintenance.
 Variable Expenses
Dining Out: The cost of eating at restaurants.
NEED VS WANTS
 DIFFERENCE
Needs are essential items or services that you
must have to survive or function. They are
things that you cannot do without.

Wants are things that you desire but are not

essential for survival. They are things that you
would like to have but can live without.
 Needs
Food: Essential for survival.
 Needs
Water: Essential for survival
 Needs
Shelter: Essential for protection from the elements.
 Needs
Clothing: Essential for warmth and protection.
 WANTS
Electronics: Not essential for survival, but can
improve quality of life.
 WANTS
Entertainment: Not essential for survival, but can
provide enjoyment.
 WANTS
Luxury Items: Not essential for survival, but can provide
comfort and pleasure.
 Needs
Travel: Not essential for survival, but can provide
new experiences and memories.
DEBT
 WHAT IS DEBT ??
Debt is money that you owe to someone else. It
can be a loan, a credit card balance, or other forms
of borrowed money.
 Types of Debt
Secured Debt : Debt that is backed by a specific
asset, such as a car or a home. If you default on the
loan, the lender can seize the asset.
 Unsecured Debt: Debt that is not backed by any
specific asset. If you default on the loan, the lender
can take legal action to collect the debt.
 How Debt Works ??

When you borrow money, you typically agree to

repay the loan over time, with interest. Interest is
the cost of borrowing money. The higher the
interest rate, the more you will pay back in total.
 Managing Debt

Create a Budget: Track your income and expenses

to see where your money is going.
Pay Off High-Interest Debt First: Focus on paying
off debts with the highest interest rates to save
money on interest
Consider Debt Consolidation: Combining
multiple debts into a single loan with a lower
interest rate can make it easier to manage
your debt.

Avoid Taking on New Debt: Be cautious about

taking on new debt, especially if you are
already struggling to manage your existing
debt.
Financial Responsibility
and Planning
Financial responsibility is about making wise
decisions with your money. It involves
understanding your income, expenses, and
creating a plan to achieve your financial goals.

Financial planning is the process of creating a

roadmap to reach your financial goals. It involves
setting financial goals, creating a budget, saving
and investing, and managing debt.
 Key Steps to Financial
Responsibility and Planning

Set Financial Goals: Determine what you want to

achieve with your money, such as buying a home,
saving for retirement, or starting a business.
Create a Budget: Track your income and expenses
to understand where your money is going.
 Save and Invest: Set aside money for
emergencies and long-term goals. Consider
investing in stocks, bonds, or mutual funds to grow
your wealth.
Manage Debt: Pay off high-interest debt and
avoid taking on excessive debt.
Protect Yourself: Purchase insurance, such
as health insurance, car insurance, and
home insurance, to protect yourself from
unexpected expenses.
Seek Professional Advice: Consult with a
financial advisor to get personalized
guidance and advice.
Fraud Prevention and
OTP Scams
Fraud is when someone tries to trick you into
giving them your money or personal
information.

OTP stands for "One-Time Password." It's a

unique code that is sent to your phone or email
to verify your identity.
 How to Prevent Fraud
Be Careful with Personal Information: Never share
your personal information, such as your Social
Security number, bank account details, or
passwords, with anyone you don't know or trust.
Don't Click on Suspicious Links: Be cautious
of emails, text messages, or social media
messages that contain links or attachments.
If you're unsure, don't click on them.
Be Aware of OTP Scams: Scammers may
try to trick you into giving them your OTP.
Never share your OTP with anyone, even if
they claim to be from a trusted company.
Use Strong Passwords: Create strong
passwords that are difficult to guess. Use
a combination of upper and lowercase
letters, numbers, and symbols.
Monitor Your Accounts: Regularly check
your bank statements and credit
reports for any unauthorized activity.
 CONCLUSION
Introduction to Money
Money is a medium of exchange, a unit of account, and
a store of value. It is essential for facilitating economic
activity.

Types of Income
Income is the money you earn. It can be earned,
investment, or passive. Understanding the different
types of income can help you manage your finances
effectively.
 CONCLUSION
Types of Expenses
Expenses are the costs you incur. They can be fixed,
variable, or occasional. Tracking your expenses is essential
for creating a budget and managing your finances.

Needs vs. Wants

Needs are essential for survival, while wants are things
that you desire but can live without. Distinguishing
between needs and wants can help you prioritize your
spending and make informed financial decisions.
 CONCLUSION
Debt
Debt is money that you owe to someone else. It can be
secured or unsecured. Managing debt responsibly is crucial
for financial health.

Fraud Prevention and OTP Scams

Fraud is a deliberate deception for personal gain. OTP scams
are a common type of fraud where scammers try to trick
you into revealing your OTP. By being vigilant and following
best practices for online security, you can protect yourself
from fraud
THANK
YOU