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LITERACY
Document Title 0
IMPORTANCE OF FINANCIAL PLANNING
1 Document Title 1
FINANCIAL LITERACY CURRICULUM
Financial Independence
Document Title 2
WHAT IS FINANCIAL LITERACY
Document Title 3
DISTINGUISHING BETWEEN NEEDS & WANTS
Document Title 4
MASLOW’S HIERACHY OF NEEDS
Document Title 5
TYPICAL EMPLOYEE LIFE CYCLE
Major Life Events
Wealth
Receive
Receive inheritance
Marriage
Health insurance
Access pension
requirements
Paid off
College Home purchase
mortgage Losing spouse
Retirement
0 25 30 35 40 45 50 55 60 65 70 75 80+ Age
Years
• Borrowing
Document Title 7
HOW TO ALLOCATE YOUR MONEY
Document Title 9
BUDGETING: TEMPLATE
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Balance Brought
forward
Income
Salary
Business / Rental
Income
Investment Income
Expenditure
Food
Fuel
Rent
School Fees
Clothing
Entertainment-
Outings (Dinner)
Donations/Tithe
Balance
Document Title 10
BUDGETING: EXAMPLE
Month Month Month Month Month Month Month Month Month Month Month Month
KES 100K P/M 1 2 3 4 5 6 7 8 9 10 11 12
Balance Brought
-
forward 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00 144,625.00 169,250.00 193,875.00 218,500.00 243,125.00
Income -
Salary 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 105,000.00 105,000.00 105,000.00 105,000.00 105,000.00 105,000.00
Business / Rental
Income 0
100,000.00 120,000.00 140,000.00 160,000.00 180,000.00 200,000.00 226,000.00 250,625.00 275,250.00 299,875.00 324,500.00 349,125.00
Expenditure
Savings 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,500.00 10,500.00 10,500.00 10,500.00 10,500.00 10,500.00
Food 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00
Transport 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,250.00 5,250.00 5,250.00 5,250.00 5,250.00 5,250.00
Rent 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
School Fees 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Clothing 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,625.00 2,625.00 2,625.00 2,625.00 2,625.00 2,625.00
Entertainment-Outings
(Dinner) 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00
Donations/Tithe 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 21,000.00 21,000.00 21,000.00 21,000.00 21,000.00 21,000.00
Investment 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,500.00 10,500.00 10,500.00 10,500.00 10,500.00 10,500.00
100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 102,375.00 102,375.00 102,375.00 102,375.00 102,375.00 102,375.00
Balance - 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 123,625.00 148,250.00 172,875.00 197,500.00 222,125.00 246,750.00
Document Title 11
BORROWING & CREDIT CARDS
Document Title 12
GOOD DEBT vs. BAD DEBT
GOOD DEBT
Debt incurred as a result of an investment that will grow in
value or generate long-term income.
BAD DEBT
Debt incurred to purchase things that:
• Quickly lose their value
• Do not generate long-term income and
• Have a high interest rate, like credit card debt.
Document Title 13
GOOD LOAN vs. BAD LOAN: EXCERCISE
Document Title 14
CREDIT CARD BILLING CYCLE
Grace = 50 Days
Period
30 Days 20 Days
30 Days 20 Days
Document Title 16
ONLINE CREDIT CARD SECURITY
1. Protect your credit card just as you would actual cash in your wallet/purse - Only
enter your credit card number on websites that you are sure are 100% legitimate.
2. Never send confidential data e.g. passwords, credit card information via e-mail
unless using secure mail as it can be intercepted by a third party.
3. Verify that the website is encrypted by checking the web page URL (HTTPS)
4. Ensure that data being transmitted is encrypted by checking to make sure that a
padlock is displayed
5. Use caution when accepting prompts- to install programs or add-ons to your
computer or smart phones.
Document Title 17
PROS & CONS OF CREDIT CARDS
PROS CONS
Quick way to borrow especially
X Overuse
for emergencies
X Paperwork
Cheapest source of funding
X High-cost fees
Convenience and flexibility
X Deepening your debt
Record keeping
Perks: Cash Back, reward points,
discounts etc.
Shopping in safety
Document Title 18
SIMPLE CREDIT CARD RULES TO FOLLOW
Document Title 19
FINANCIAL INDEPENDENCE
Document Title 20
DEFINE YOUR FINANCIAL HEAVEN
Financial independence begins by knowing where you currently stand.
Document Title 22
22
CAUSES OF FINANCIAL DIFFICULTY
• Job loss
• Medical expenses
• Unexpected expenses “We buy things we
• Living beyond ones don't need, with money
means we don't have, to
• Trying to keep up with impress people we don't
the Joneses like.”
• Poor money management ~ Dave Ramsey ~
skills
• Rise of inflation
Document Title 23
HOW TO DEAL WITH FINANCIAL DIFFICULTY
Document Title 24
FINANCIAL DIFFICULTY AND YOUR HEALTH
What to do:
Seek medical assistance immediately
Document Title 25
HOW TO ATTAIN FINANCIAL INDEPENDENCE
LIFE
MANAGING INVESTMENT FINANCIAL
INSURANCE STYLE
CREDIT OPTIONS PLANNING
CHANGE
Credit is good if used for Several Options A safety against •Avoid Impulse •Budgeting
investment but could from High Risk emergencies. buying
easily lead to financial to Low. •Keep track of your
difficulty if not •Buying a house This ensures •Avoid Keeping expenses
controlled. •Fixed income your wealth or up with the
•Share save savings is not Joneses •Pay yourself
•Staff loans- Mortgage, •Life, education & wiped out by
PL,&CC health insurance unexpected event •Have a heart of •Maximise your
•Micro Finance e.g. policies e.g. Theft, fire, Contentment retirement savings
Kenya bankers – High •Precious metals accident, illness •Finally Save for
Rates •Stocks @ NSE and now days •Have a vision. known-expenses,
•Hire Purchase •Starting a terror attacks Have a long term emergencies and
•Credit from Friends and business plan. investments
Family Document Title 26
. . . A FEW OTHER POINTS TO CONSIDER
Document Title 27
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