1.1 - The Importance of Sustainable Personal Finances

Question 1

Sustainable personal finance definition

Answer 1

Achieving and maintaining a balance between personal income and expenditure to satisfy needs, wants and aspirations within a budget

Question 2

Impacts of not being personally financially sustainable

Answer 2

• Impacts for future financial and economic health of country
• Unemployment
• Personal debt
• House repossessions

Question 3

What did growing levels of personal debt and rising unemployment result in?

Answer 3

The formation of government agencies, such as the Money Advice Service, and non-government organisations such as Citizens Advice

Question 4

Individuals that want to achieve sustainable personal finances over long term should aim to

Answer 4

• Be aware of how much they are spending
• use weekly/monthly budgets and cash flow forecasts
• Have an adequate emergency fund

Question 5

Who is blame for the financial crisis attributed to?

Answer 5

Bankers who are accused of encouraging people to take on mortgage loans and other debts that they could not afford to repay.

Question 6

Why should consumers take the blame for the financial crisis?

Answer 6

They took advantage of accessible loans to pay for unsustainable levels of spending

Question 7

High levels of personal debt in the UK may be manageable as long as:

Answer 7

• Economy is growing

- Unemployment is relatively low

Question 8

Why has financial capability been added to the National Curriculum?

Answer 8

So that all pupils should leave school with at least a basic level of financial literacy.

Question 9

Insolvency definition

Answer 9

A situation in which a person cannot repay what they owe because their debts are greater than their assets

Question 10

Recession definition

Answer 10

A period of at least six months when the amount of goods and services the country is producing is shrinking