Podcast
Questions and Answers
Effective income management is crucial for achieving short-term financial stability.
Effective income management is crucial for achieving short-term financial stability.
False (B)
Budgeting helps in wise fund allocation and ensures informed decision-making.
Budgeting helps in wise fund allocation and ensures informed decision-making.
True (A)
Strategies for debt control are unnecessary in personal financial planning.
Strategies for debt control are unnecessary in personal financial planning.
False (B)
Personal financial planning can help identify suitable investment opportunities.
Personal financial planning can help identify suitable investment opportunities.
Maximizing income potential is not a focus of personal financial planning.
Maximizing income potential is not a focus of personal financial planning.
Having a repayment plan is essential for managing existing debts effectively.
Having a repayment plan is essential for managing existing debts effectively.
Personal financial planning helps minimize unnecessary expenditures and increase savings.
Personal financial planning helps minimize unnecessary expenditures and increase savings.
Investment strategies should be generic and not tailored to individual goals.
Investment strategies should be generic and not tailored to individual goals.
Gross pay is calculated by subtracting deductions from net pay.
Gross pay is calculated by subtracting deductions from net pay.
An employee's probation period lasts for 6 months in the Philippines.
An employee's probation period lasts for 6 months in the Philippines.
Employees are entitled to 150% of their daily rate for working on a regular holiday.
Employees are entitled to 150% of their daily rate for working on a regular holiday.
Overtime work in the Philippines is considered any work beyond 7 hours a day.
Overtime work in the Philippines is considered any work beyond 7 hours a day.
Severance pay can be either one month of an employee's salary or one month of salary for each year of service.
Severance pay can be either one month of an employee's salary or one month of salary for each year of service.
Payroll encompasses the process of managing employee benefits only.
Payroll encompasses the process of managing employee benefits only.
Workers who do not have de minimis benefits receive the same pay rate.
Workers who do not have de minimis benefits receive the same pay rate.
An employer is legally allowed to terminate an employee without just cause.
An employer is legally allowed to terminate an employee without just cause.
A mortgage is often the most expensive debt due to its high interest rates.
A mortgage is often the most expensive debt due to its high interest rates.
Paying off the smallest debt first can provide a sense of accomplishment.
Paying off the smallest debt first can provide a sense of accomplishment.
Consolidation loans increase the overall interest costs for the borrower.
Consolidation loans increase the overall interest costs for the borrower.
To begin managing debt, it's essential to know how much you owe.
To begin managing debt, it's essential to know how much you owe.
Inspecting your spending is unnecessary once you know your debt amount.
Inspecting your spending is unnecessary once you know your debt amount.
It is advisable to continue accumulating new debt while paying off a consolidation loan.
It is advisable to continue accumulating new debt while paying off a consolidation loan.
Hiring a financial planner is one of the strategies available for managing debt.
Hiring a financial planner is one of the strategies available for managing debt.
Calculating monthly 'need-to-have' costs should not be a part of debt management.
Calculating monthly 'need-to-have' costs should not be a part of debt management.
Liquid funds generally have returns ranging from 3% to 5% per annum.
Liquid funds generally have returns ranging from 3% to 5% per annum.
Arbitrage funds are taxed at a higher rate than debt funds.
Arbitrage funds are taxed at a higher rate than debt funds.
High Yield Savings Accounts provide lower interest rates compared to traditional Savings Accounts.
High Yield Savings Accounts provide lower interest rates compared to traditional Savings Accounts.
It is important to periodically reassess your emergency funding needs.
It is important to periodically reassess your emergency funding needs.
Verification fees are commonly charged by most savings accounts.
Verification fees are commonly charged by most savings accounts.
Creating a budget is the first step to reducing unnecessary spending.
Creating a budget is the first step to reducing unnecessary spending.
Savings accounts always require a high minimum deposit to open an account.
Savings accounts always require a high minimum deposit to open an account.
Prioritizing expenses should focus only on non-essential items.
Prioritizing expenses should focus only on non-essential items.
Time deposits allow you to withdraw your money at any time without penalties.
Time deposits allow you to withdraw your money at any time without penalties.
Joint savings accounts can be beneficial for couples looking to save together.
Joint savings accounts can be beneficial for couples looking to save together.
Digital bank accounts can only be accessed through physical branches.
Digital bank accounts can only be accessed through physical branches.
Automating your savings is suggested as a strategy to increase savings.
Automating your savings is suggested as a strategy to increase savings.
Business savings accounts have no interest earning capabilities.
Business savings accounts have no interest earning capabilities.
You can easily access funds in a digital bank account without transfer fees.
You can easily access funds in a digital bank account without transfer fees.
Passbook savings accounts usually offer higher interest rates than time deposits.
Passbook savings accounts usually offer higher interest rates than time deposits.
All account holders in an 'or' type joint savings account have equal access to the funds.
All account holders in an 'or' type joint savings account have equal access to the funds.
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Study Notes
Payroll Processes
- Payroll encompasses managing employee wage payments.
- Payroll calculations include employee earnings and deductions like taxes (income tax, SSS, PhilHealth, PAG-IBIG).
- Payroll is typically managed by the finance and human resources departments.
- Gross Pay - Deductions = Net Pay.
Probation Period in the Philippines
- Probationary employment lasts for 6 months from the start date.
- Performance is closely monitored during the probationary period to determine suitability for regular employment with security of tenure.
- Probationary employees receive the same pay rate as regular employees.
- Probationary employees may not receive de minimis benefits (like rice and transportation allowances).
- If an employer chooses not to extend a probationary contract, payroll processes termination and severance pay.
Work Hours and Holidays
- Normal working hours are 40 hours per week, divided over 5 days.
- Overtime is paid for any work exceeding 8 hours per day.
- Employees working on recognized regular and special holidays are entitled to additional pay.
- Working on a regular holiday entitles an employee to 200% of their daily rate.
Termination and Severance
- Employees cannot be terminated without just cause.
- Severance pay is a minimum of 1 month of salary OR 1 month for every year of service, whichever is higher.
Components of Personal Finance
- Income Management:
- Focuses on maximizing income sources.
- Improves cash flow to reach financial goals quickly.
- Essential for long-term financial stability.
- Budgeting:
- Helps allocate funds wisely.
- Tracks expenses.
- Empowers informed financial decisions.
- Debt Control:
- Includes strategies to manage and reduce debt.
- Involves developing repayment plans.
- Improves overall financial well-being.
- Investing:
- Tailored investment strategies based on personal goals.
- Identifies suitable investment opportunities.
- Manages risks effectively for steady wealth growth.
Benefits of Financial Planning
- Maximizes income potential
- Identifies cost-cutting opportunities
- Increases savings by reducing unnecessary expenses
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