1Y: Making the Most of Your Resources

Question 1

What are resources?

Answer 1

A resource is anything which we can use in order to meet our needs or achieve our goals.

Question 2

What are the 5 types of resources?

Answer 2

1. Physical / Capital Resources: e.g. buildings, vehicles, computers, machinery, phones and books.
2. Natural Resources: e.g. land, water.
3. Financial Resources: e.g. wages, savings, income from benefit, access to borrowings.
4. Human Resources: e.g. ability to read / write, creativity, experience, family & friends, teachers, coaches.
5. Time: We can use our available time to learn skills or carry out work etc.

Question 3

What is a Need?

Answer 3

A need is something which we simply can’t do without or something which plays a very important part in our lives.

Question 4

What is a Want?

Answer 4

A want is something which we would really like to have, something which may improve our quality of life, but which is not essential.

Question 5

What is Money?

Answer 5

Money is anything of value that is accepted by people in exchange for goods and services.

Question 6

What is the Financial Cost and the Opportunity Cost?

Answer 6

Everything you buy has two costs:

1. A Financial Cost: This is the money cost of the item you choose to buy.
2. An Opportunity Cost: This is the cost in terms of the ‘next best thing’ you could have done with your money. When you decide to use your money for one particular purpose you lose the chance (opportunity) to do something else with that money.

Question 7

Give examples of being ‘Money Smart’? (9)

Answer 7

Being ‘money-smart’ means:

1. Thinking about where your money comes from … and also where it goes
2. Being able to live within your means
3. Being able to plan for future spending needs
4. Being able to save regularly
5. Being able to calculate and pay your taxes
6. Understanding the dangers associated with overspending and borrowing
7. Being able to make informed decisions about managing personal finances
8. Understanding what a personal financial life cycle is, and being able to prepare one for yourself
9. Using your money wisely … because it doesn’t grow on trees you know!