Finance, Savings, Credit Flashcards
1
Q
Factors that affect a household’s income
A
Age, Gender, Socio-economic status, Culture, Family members in employment - dual income.
2
Q
How does age affect income?
A
Over 20 are entitled to the minimum wage of €13.50. With qualifications & experience, income increases. Over 66s retire & receive a pension, which is less than wages.
3
Q
What does the Equal Status Act state regarding gender?
A
Both genders should receive the same amount of money for the same job.
4
Q
How does socio-economic status affect income?
A
Upper-class individuals often secure better-paid jobs due to better education and contacts. Lower-class individuals may prioritize needs like rent over education, leading to lower-paying jobs.
5
Q
How does culture influence salaries?
A
Salaries for the same job can vary from country to country. For example, nurses in Australia are paid better than Irish nurses.
6
Q
How does family contribute to the Irish economy?
A
Working adults pay taxes (PAYE, PRSI & USC) which maintain state services. Family income is spent on goods & services that create jobs.
7
Q
What are the sources of income?
A
Social welfare payments, Pension, Wage/salary.
8
Q
What is gross income?
A
Income before deductions, taxes you want to remove.
9
Q
What is net income?
A
Income after deductions.
10
Q
What are compulsory deductions?
A
PRSI, PAYE, & USC.
11
Q
What does PAYE stand for?
A
Pay As You Earn. It is a compulsory tax deducted from gross income.
12
Q
What is tax liability?
A
The amount of tax a person owes to revenue commissioners. In Ireland, there are two PAYE rates: a standard rate of 20% and a higher rate of 40%.
13
Q
What are tax credits?
A
Tax credits reduce the amount of income tax (PAYE) a person has to pay. For example, a single person has a tax credit of €1,700 for 2022.
14
Q
What is PRSI?
A
Pay Related Social Insurance, a compulsory deduction from gross income paid directly to Revenue commissioners.
15
Q
What is USC?
A
Universal Social Charge, a compulsory deduction from gross income calculated as a percentage.
16
Q
What is a P60?
A
A document showing total income & total PAYE, PRSI, & USC for the last tax year.
17
Q
What is a P45?
A
A document given when you leave your job, showing total income and deductions since January 1st.
18
Q
What are voluntary deductions?
A
Private health insurance, Trade union payments, Loan repayments, Savings, Pension scheme payments.
19
Q
What is a private pension?
A
A pension you pay into throughout your working life, providing a lump sum upon retirement.
20
Q
What is an occupational pension?
A
A pension set up by employers of large companies, with contributions from both employee and employer.
21
Q
What is a contributory old age pension?
A
Paid to individuals aged 66 with at least 502 PRSI contributions, not means tested, with a maximum weekly payment of €253.30.
22
Q
What is a non-contributory old age pension?
A
Paid to individuals aged 66 who do not qualify for the contributory pension, means tested, with a maximum weekly payment of €242.
23
Q
What is a widow’s pension?
A
A means-tested payment for widows and surviving civil partners without dependent children, with a maximum payment of €208.
24
Q
What are the three categories of social welfare payments?
A
Social insurance, Social assurance, Universal payments.
25
What are social insurance payments?
Payments for individuals who have paid at least 39 weeks of PRSI, not means tested.
26
What are social assurance payments?
Payments for individuals who have paid less than 39 weeks of PRSI, means tested.
27
What are universal payments?
Payments given to everyone regardless of PRSI contributions, not means tested.
28
What is a working family payment?
A weekly tax-free payment for low-income working families with children, based on the income difference and government-set limits.
29
What is a supplementary welfare allowance?
A weekly payment for individuals with no income or insufficient income to meet needs, such as €112.70 for 18-23 year-olds not living independently.
30
What is a budget?
A plan for spending & saving money, identifying total income and dividing it for expenses.
31
What are advantages of budgeting?
Creates good money management skills, ensures financial security, facilitates savings for unplanned events, and identifies expenditure.
32
What are guidelines for preparing a budget?
Identify all forms of household income, list all household expenditure, set a percentage for each expenditure, allocate savings, and review the budget.
33
What is essential expenditure?
Money spent on needs, such as bills that must be paid.
34
What is discretionary expenditure?
Money spent on non-essential items, such as luxuries.
35
What factors contribute to patterns in household expenditure?
Family size, socio-economic status, location, beliefs/values.
36
How does family size affect expenditure?
Larger families spend more due to increased needs for food, electricity, and childcare.
37
How does socio-economic status affect discretionary income?
Upper-class individuals have more discretionary income, while working-class individuals spend more on essentials.
38
How does location affect household expenditure?
Urban families face higher living costs, while rural families incur greater travel expenses.
39
How do beliefs/values influence spending?
Some families prioritize private education, leading to higher spending on schooling.
40
What are ways to reduce household expenditure?
Make shopping lists, use coupons, buy second-hand clothes, and utilize energy-saving practices.
41
What is the Money Advice and Budgeting Service (MABS)?
A free, confidential service for people in debt, run through the Citizens Information Board.
42
What are the functions of MABS?
Advises on immediate debt problems and helps families develop money management skills.
43
What is credit?
Allows consumers to borrow money to buy goods & services, repaying with interest later.
44
What are advantages of credit?
Allows use of products before payment, facilitates large purchases, and encourages spending.
45
What are disadvantages of credit?
Can lead to debt, goods can be repossessed, and total costs are higher due to interest.
46
What are forms of credit?
Credit Card, Overdraft, Hire Purchase, Term loans.
47
What does the Hire Purchase Act set out?
Conditions for HP agreements to protect consumers, including a cooling-off period.
48
What are advantages of hire purchase?
Cooling-off period allows cancellation without penalties; goods cannot be repossessed without a court order.
49
How are borrowers protected by the Consumer Credit Act?
Includes a cooling-off period, written agreements outlining costs, and clear credit advertisements.
50
What is the Annual Percentage Rate (APR)?
A way to compare costs of different types of credit over a one-year period.
51
What is saving?
Setting aside income for future use, which can be long-term or short-term.
52
Where can you save?
Post office, Banks, Building society, Credit union, Insurance companies.
53
What are reasons to save?
Security for future, good credit rating, funds for large spending, reduces need for credit.
54
What factors to consider when choosing a savings scheme?
Term, Risk, Access, Interest, Tax.
55
What is a demand deposit account?
Suitable for short-term savings, secure with variable interest, easy access.
56
What is a notice deposit account?
Suitable for short-term deposits, earns higher interest, requires notice to access funds.
57
What is an An Post deposit account?
Minimum deposit of €1, interest rate of 0.05%, subject to DIRT.
58
What is an An Post savings bond?
Fixed lump sum for 3 years, earns 1% interest, no DIRT.
59
What is a fixed rate?
Interest rate set for a specific period, providing stability.
60
What is a variable rate?
Interest rate changes with ECB rate, offering lower initial payments.
61
Factors that affect a household's income
Age, Gender, Socio-economic status, Culture, Family members in employment - dual income.
62
How does age affect income?
Over 18s can work more & earn more. They are entitled to the minimum wage of €9.04 (2023). With qualifications & experience, income increases. Over 66s retire & receive a pension, which is less than wages.
63
What does the Equal Status Act state regarding gender?
Both genders should receive the same amount of money for the same job.
64
How does socio-economic status affect income?
Upper-class individuals often secure better-paid jobs due to better education and contacts. Lower-class individuals may prioritize needs like rent over education, leading to lower-paying jobs.
65
How does culture influence salaries?
Salaries for the same job can vary from country to country. For example, nurses in Australia are paid better than Irish nurses.
66
How does family contribute to the Irish economy?
Working adults pay taxes (PAYE, PRSI & USC) which maintain state services. Family income is spent on goods & services that create jobs.
67
What are the sources of income?
Social welfare payments, Pension, Wage/salary.
68
What is gross income?
Income before deductions, taxes you want to remove.
69
What is net income?
Income after deductions.
70
What are compulsory deductions?
PRSI, PAYE, & USC.
71
What does PAYE stand for?
Pay As You Earn. It is a compulsory tax deducted from gross income.
72
What is tax liability?
The amount of tax a person owes to revenue commissioners. In Ireland, there are two PAYE rates: a standard rate of 20% and a higher rate of 40%.
73
What are tax credits?
Tax credits reduce the amount of income tax (PAYE) a person has to pay. For example, a single person has a tax credit of €1,700 for 2022.
74
What is PRSI?
Pay Related Social Insurance, a compulsory deduction from gross income paid directly to Revenue commissioners.
75
What is USC?
Universal Social Charge, a compulsory deduction from gross income calculated as a percentage.
76
What is a P60?
A document showing total income & total PAYE, PRSI, & USC for the last tax year.
77
What is a P45?
A document given when you leave your job, showing total income and deductions since January 1st.
78
What are voluntary deductions?
Private health insurance, Trade union payments, Loan repayments, Savings, Pension scheme payments.
79
What is a private pension?
A pension you pay into throughout your working life, providing a lump sum upon retirement.
80
What is an occupational pension?
A pension set up by employers of large companies, with contributions from both employee and employer.
81
What is a contributory old age pension?
Paid to individuals aged 66 with at least 502 PRSI contributions, not means tested, with a maximum weekly payment of €253.30.
82
What is a non-contributory old age pension?
Paid to individuals aged 66 who do not qualify for the contributory pension, means tested, with a maximum weekly payment of €242.
83
What is a widow's pension?
A means-tested payment for widows and surviving civil partners without dependent children, with a maximum payment of €208.
84
What are the three categories of social welfare payments?
Social insurance, Social assurance, Universal payments.
85
What are social insurance payments?
Payments for individuals who have paid at least 39 weeks of PRSI, not means tested.
86
What are social assurance payments?
Payments for individuals who have paid less than 39 weeks of PRSI, means tested.
87
What are universal payments?
Payments given to everyone regardless of PRSI contributions, not means tested.
88
What is a working family payment?
A weekly tax-free payment for low-income working families with children, based on the income difference and government-set limits.
89
What is a supplementary welfare allowance?
A weekly payment for individuals with no income or insufficient income to meet needs, such as €112.70 for 18-23 year-olds not living independently.
90
What is a budget?
A plan for spending & saving money, identifying total income and dividing it for expenses.
91
What are advantages of budgeting?
Creates good money management skills, ensures financial security, facilitates savings for unplanned events, and identifies expenditure.
92
What are guidelines for preparing a budget?
Identify all forms of household income, list all household expenditure, set a percentage for each expenditure, allocate savings, and review the budget.
93
What is essential expenditure?
Money spent on needs, such as bills that must be paid.
94
What is discretionary expenditure?
Money spent on non-essential items, such as luxuries.
95
What factors contribute to patterns in household expenditure?
Family size, socio-economic status, location, beliefs/values.
96
How does family size affect expenditure?
Larger families spend more due to increased needs for food, electricity, and childcare.
97
How does socio-economic status affect discretionary income?
Upper-class individuals have more discretionary income, while working-class individuals spend more on essentials.
98
How does location affect household expenditure?
Urban families face higher living costs, while rural families incur greater travel expenses.
99
How do beliefs/values influence spending?
Some families prioritize private education, leading to higher spending on schooling.
100
What are ways to reduce household expenditure?
Make shopping lists, use coupons, buy second-hand clothes, and utilize energy-saving practices.
101
What is the Money Advice and Budgeting Service (MABS)?
A free, confidential service for people in debt, run through the Citizens Information Board.
102
What are the functions of MABS?
Advises on immediate debt problems and helps families develop money management skills.
103
What is credit?
Allows consumers to borrow money to buy goods & services, repaying with interest later.
104
What are advantages of credit?
Allows use of products before payment, facilitates large purchases, and encourages spending.
105
What are disadvantages of credit?
Can lead to debt, goods can be repossessed, and total costs are higher due to interest.
106
What are forms of credit?
Credit Card, Overdraft, Hire Purchase, Term loans.
107
What does the Hire Purchase Act set out?
Conditions for HP agreements to protect consumers, including a cooling-off period.
108
What are advantages of hire purchase?
Cooling-off period allows cancellation without penalties; goods cannot be repossessed without a court order.
109
How are borrowers protected by the Consumer Credit Act?
Includes a cooling-off period, written agreements outlining costs, and clear credit advertisements.
110
What is the Annual Percentage Rate (APR)?
A way to compare costs of different types of credit over a one-year period.
111
What is saving?
Setting aside income for future use, which can be long-term or short-term.
112
Where can you save?
Post office, Banks, Building society, Credit union, Insurance companies.
113
What are reasons to save?
Security for future, good credit rating, funds for large spending, reduces need for credit.
114
What factors to consider when choosing a savings scheme?
Term, Risk, Access, Interest, Tax.
115
What is a demand deposit account?
Suitable for short-term savings, secure with variable interest, easy access.
116
What is a notice deposit account?
Suitable for short-term deposits, earns higher interest, requires notice to access funds.
117
What is an An Post deposit account?
Minimum deposit of €1, interest rate of 0.05%, subject to DIRT.
118
What is an An Post savings bond?
Fixed lump sum for 3 years, earns 1% interest, no DIRT.
119
What is a fixed rate?
Interest rate set for a specific period, providing stability.
120
What is a variable rate?
Interest rate changes with ECB rate, offering lower initial payments.
