Financial Planning and Budgeting 

Case Study: Freddie’s Financial Planning and Budgeting as a Freelance Carpenter

Background

Freddie is a dedicated freelance carpenter living in a modest neighborhood in Bago City. Growing up surrounded by sugarcane fields, he learned the value of hard work early. Now, as a husband and father of two young children—Robert, a second grader in public school, and Noah, who is just one year old—Freddie faces the daily challenge of providing for his family while managing the uncertainties of freelance work. His wife, Liza, stays at home to care for their children, which adds to the pressure of ensuring financial stability. Every day, Freddie leaves home early in the morning, armed with his tools and a heart full of hope. He takes on carpentry jobs that range from building furniture to renovating homes. Each project is an opportunity to showcase his skills, but it also comes with the uncertainty of fluctuating income. As he works hard to support his family, he often thinks about Robert’s school supplies and Noah’s needs, which weigh heavily on his mind.

Income

Freddie earns ₱650 per day from his carpentry work. On average, he works 20 days a month, which gives him a monthly income of ₱13,000 (₱650 x 20 days). This income is crucial for supporting his family, especially with two young children who require constant care and attention.

Financial Planning and Budgeting 

Monthly Expenses

Freddie’s monthly expenses are significant and reflect the needs of his growing family:

1. Mobile Phone Load: To maintain communication with Liza throughout the day, Freddie allocates ₱200 monthly for mobile phone load. This connection is vital for coordinating schedules and ensuring Liza can reach him if any issues arise at home.
2. Social Security System (SSS) Contribution: As a self-employed individual, Freddie contributes ₱1,830 to the Social Security System (SSS) each month. This contribution is not just a number; it represents his commitment to securing benefits for his family in times of need—health emergencies or unexpected circumstances.
3. Household Expenses: Freddie faces household expenses such as food, utilities, diapers for Noah, and other necessities for Mia. These expenses typically total around ₱7,000 per month. The cost of feeding two growing children while ensuring access to healthy meals weighs heavily on his mind.
4. School Supplies for Robert:  As Robert is now in second grade at a public school, Freddie needs to budget for her school supplies and materials. He sets aside approximately ₱1,000 each month for items like notebooks, pencils, and other educational necessities.
5. Savings and Emergency Fund: Despite the tight budget, Freddie tries to set aside at least ₱1,000 each month for savings and emergencies. He dreams of saving enough to cover unexpected medical bills or repairs around the house.

Financial Planning and Budgeting 

Financial Summary

Based on the above information, here’s a breakdown of Freddie’s monthly financial situation:

• Total Monthly Income: ₱13,000
• Total Monthly Expenses:
  • Mobile Phone Load: ₱200
  • SSS Contribution: ₱1,830
  • Household Expenses: ₱7,000
  • School Supplies: ₱1,000
  • Savings: ₱1,000
• Total Monthly Expenses: ₱11,030

Remaining Balance

After accounting for his expenses, Freddie’s remaining balance each month can be calculated as follows:

• Remaining Balance = Total Monthly Income – Total Monthly Expenses
• Remaining Balance = ₱13,000 – ₱11,030 = ₱1,970

Conclusion: Financial Planning and Budgeting—Freddie’s Path to Stability and Growth

Freddie’s financial management as a freelance carpenter is filled with both challenges and triumphs. Each day balances between providing for his family’s needs and saving for their future. The pressure of being the sole breadwinner weighs heavily on him as he watches Mia grow into a curious second grader excited about learning and Noah continue to thrive under Liza’s loving care. With a remaining balance of ₱1,970, Freddie feels a sense of relief but knows that every peso counts. This amount may go toward purchasing new tools that could help him secure more jobs or cover unexpected expenses that life throws their way. In this journey of fatherhood and responsibility, Freddie exemplifies resilience and determination. His story reminds us that behind every financial decision lies a family’s hopes and dreams—a testament to his love and commitment to Liza and their children. By navigating the complexities of freelance work with careful planning and unwavering dedication, Freddie strives to create a brighter future for his family while cherishing every moment spent together.

Financial Planning and Budgeting 

Questions for Students

1. Budgeting Skills: Based on Freddie’s income and expenses outlined in the case study, what budgeting strategies would you recommend he implement to cover all necessary costs while still saving?
2. Emergency Fund: Why is it essential for Freddie to maintain an emergency fund? How much should he ideally have saved up based on his current expenses?
3. Financial Priorities: Considering Freddie has limited income after expenses are paid (₱1,970), what financial priorities should he focus on? Should he invest in tools for work or prioritize saving more? Justify your answer.
4. Impact of Education Costs: How do Mia’s school supplies impact Freddie’s overall budget? What strategies could he use to manage these costs effectively?
5. Long-Term Goals: What long-term financial goals should Freddie consider setting for himself and his family? How can these goals influence his current spending habits?

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