This chapter reviews existing literatures and studies that are related to the study. The reviews begin with the financial literacy of people in the Philippines, what they know about personal finance, and the impact of knowing the methods of personal finance in their lives. This part of the research is to strengthen the ideas and concepts of our study.
The concepts and how you understand personal finance management We could simply call personal finance as all financial decisions and everyday activities that a person could do. Budgeting household incomes and expenditures, savings, investments, mortgages, insurance and all other decisions that require money are included in our financial decisions. The most significant…show more content… It could be easy and so simple to raise the public’s awareness to the importance of personal finance. It is significant to know and have good skills of personal finance management in order to make right or correct day-to-day decisions such as what to buy and what not to buy. This would really help us to save lots of money in the long run, as not-so-important goods or products would be bought not so frequently.
In the latest survey of Mastercard Financial Literacy Index, Indonesia and Philippines scored the lowest in the region (Asia). On basic money management, the Philippines scored 73, while Indonesia scored 70. Both were lower than the Asia-Pacific average of 75(Miral Fahmy, Reuters, 2015).
One of the best ways to increase personal finance management skills is to track a budget and fix all the incomes and expenses for each period (e.g. month, quarter, etc.). This would also help us to avoid buying unnecessary purchases and save more money for…show more content… It might be benefial not only for individuals or households, but also for countries’ economic system. However, it is easy to identify that most of us people lack financial literacy. This concerns not only governments, but also various researchers e.g. Lusardi, A. (2008); Marcolin, S.; Abraham, A. (2006). Exchairman of USA Federal Reserve Alan Greenspan once said: “The number one problem in today’s generation and economy is the lack of financial literacy.” After logical and systematic analysis of scientific researches authors can agree to conclusions, that financial literacy is too low in larger part of households in the