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Btec Business > A Undestand The Importance Of Managing Personal Finance > Flashcards

A Undestand The Importance Of Managing Personal Finance Flashcards

1
Q

Functions of money

A

Unit of account
Means of exchange
Store value
Legal tender

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2
Q

Unit of account

A

Value on goods and services

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3
Q

Means of exchange

A

Allows us to trade money to buy goods

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4
Q

Store of value

A

Use it in the future as it keeps its value

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5
Q

Legal tender

A

Legal form of payment

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6
Q

Role of money factors

A 
Personal attitudes 
Life stages
Culture
Life events 
External influences 
Interest rates
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7
Q

Planning expenditure

A

Money paid out

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8
Q

Debt

A

Money that you owe

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9
Q

Credit rating

A

Score given to individuals on how likely they are to repay debts

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10
Q

Solvent

A

Ability to meet day to day expenditure

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11
Q

Cash explanation

Plus advantages and disadvantages

A

Notes and coins
Adv - widely accepted
Dis - lost or stolen easily

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12
Q

Debit card explanation

Plus advantages and disadvantages

A

Take away money directly from a current account
Adv - no need to carry cash
Dis - short lapse between the spending and it being taken out meaning overspending

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13
Q

Credit card explanation

Plus advantages and disadvantages

A

Delayed payment for goods and services
Adv - loyalty schemes
Dis - overspending

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14
Q

What is a current account

A

An account with a bank that is designed for frequent money spending. Money can be paid in or withdrawn regularly

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15
Q

Overdraft

A

Ability to withdraw money that you don’t have in your current account

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16
Q

Hire purchase

A

Have use of an item immediately but pay for it in regular instalments

17
Q

Mortgage

A

Long term loan

18
Q

What is Individual savings account (ISA)

A

Saving account where the holder is not charged

19
Q

what is Deposit and savings account

A

Account were interest is paid

20
Q

What are Premium bonds

A

Scheme that allows individuals to receive cash prizes

21
Q

What’s a Pension

A

Long term savings plan

22
Q

ISA

A

A/ tax not charged

D/ limit set on annual amount that can be placed

23
Q

Deposit and savings account

A

A/ interest is earned

D/ low interest rates

24
Q

Premium bonds

A

A/ no loss

D/ no guaranteed return

25
Q

Saving

A

Placing money in a secure place so that it grows in value and can be used in future

26
Q

Investment

A

Commitment to a business venture in the hope that it generates financial reward

27
Q

Car insurance

A

It is a legal requirement

28
Q

Home insurance

A

Home covers the physical building and contents covers items in the house

Btec Business (2 decks)

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