A Part 2 Main Part Flashcards
What is money? *(function of money)
A method of exchange, typically in the form of any combination of coins and banknotes.
How does managing money enable a business to be successful?
Doing This allows the business to make a profit and not get into debt.
What Is Inflation?
General increase in prices and fall in the purchasing Inflation leads to a decline in the value of Money.
What Is A Unit Of Account?
this means a value can be given to goods and services
What Is Means Of Exchange?
allows people to buy and sell goods (to trade with each other)
What Is Store Of Value?
it can be saved and spent in the future
What Is Legal Tender?
it is a recognised form of payment accepted for goods or services
What Is Personal Attitudes?
to risk and reward, saving or spending, borrowing (credit and debt)
What Are Life Stages?
childhood to adulthood, changing financial needs and attitudes
What Is Culture In Regards To The Role Of Money?
religion, tradition, ethnic background affects saving and borrowing
What Culture Do Not Think Money Is For Saving?
Islamic, they think money is only a means of exchange and do not save it, or like to earn interest on it
What Are Life Events?
university costs, marriage, property, illness, financial losses
What Are External Influences?
economic change, jobs wages, taxes, benefits affect spending and saving
What Are Interest Rates?
Low rates encourage borrowing and spending, high rates encourage saving.
What Are The Financial Needs For A Child Name As Many?
Few Financial Needs:high reliance on parents for day to day expenditure and clothes and toys.
Complications Of Needs For A Child Name As Many?
Parents Pay - Family Gifts, maybe open a savings account for the child, so the child can then use the money at a later stage of their life
Adolescence Financial Needs Name As Many?
Medium Financial Needs:College Fees, University Fees, Car Insurance, Transport Fees, Food Fees, Car Financial Needs, Technology, Driving Lessons, Direct Debit Phone Bill, Credit Card/Debit Card
Adolescence Implications
Uni Fees can be really expensive, student Loan means that the student would have to work hard to keep out of debt, Interest Rate for the student loan goes up, then you have to pay more monthly instalments which could be hard to meet for a student
Young Adult Financial Needs?
Rent/ House Mortgage, Going Out Fees, the personality of the person after graduating, this means that they might be incentive to spend and not save
The financial needs of an Adult Name 1
- They need to supply for their family needs and put a mortgage on a house/property
Name The External Factors That Affect Money
Economic cycle – taxation, consumer confidence, unemployment, government and elections, bank of England & interest rates.
Name 11 Principles To Consider When Planning Expenditure (Only learn a few)
Avoid getting into debt – interest payments add to the amount borrowed
Control costs – limit spending on unnecessary items, set a budget
Avoid legal action, repossession of your goods or valuables
Remain solvent – be able to pay for day to day costs and repay debts
Keep a good credit rating – be able to borrow Money in future (credit scores affect availability of credit and cost of it)
Avoid bankruptcy – a situation when debts cannot be repaid – (more in B4)
Manage Money to fund purchases – be able to buy for cash rather than borrowing
Generate income and savings – to provide a safety net against illness or job loss
Set financial targets and goals – to purchase a car or house
Provide insurance against loss or illness – insure your valuables, holidays, etc
Counteract the effects of inflation – buy items before their prices rise.
Name As Many Ways To Pay For Goods and Services?
Cash, Debit Card, Credit Card, Standing Order, Direct Debit, Store Card, Contactless Card
CashWhat Is It? Advantage? Disadvantage?
notes and coins in a wide range of denominationsWidely accepted
people trust cash, easy to control spending (budgeting)
Can be lost or stolen, counterfeit (fake), cannot use online or for very large purchases
