Financial Management

Question 1

How to create a budget?

Answer 1

Step 1: Calculate your total income.

Step 2: Record your expenses (divided into fixed and variable).

Step 3: Total your expenses.

Step 4: Compare your total income with your total expenditure (calculate whether you have sufficient income to meet your expenses).

Step 5: Assess your financial position (modify your budget if necessary ➡ take steps to reduce your expenses or increase your income).

Question 2

What is super/superannuation?

Answer 2

Superannuation is a compulsory savings scheme for retirement. When you retire, you can either receive a lump sum of money or a pension.

Question 3

Personal loans

Answer 3

Personal loans can be accessed from banks, credit unions, building societies and other financial institutions, all of which are supervised by the Australian Prudential Regulation Authority (APRA).

Question 4

The Impact of Technology on Payment Process

Answer 4

Advantages and Disadvantages of Technology on Payment Processes
Adv.
- Easier than cash (less of a hassle to use than cash)
- Quicker and more efficient

Disadv.
- More difficult to set up
Risk of hacking
Dependence of technology

Question 5

Types of superannuation funds:

Answer 5

Retail funds - run by banks or investment companies. They offer more investment choices but the company that runs them will also keep some of the returns as profit.

Industry funds - offer less choice, but profits are returned to the members.

Question 6

Superannuation fund?

Answer 6

A superannuation fund is a compulsory savings account where each time you are paid, your employer will allocate a percentage of your income to the account (you can also put in additional money which has tax advantages).

Question 7

What is a Garnishee?

Answer 7

(a third party who is instructed by way of legal notice to surrender money or settle a debt or claim) of wages or bank accounts - an employer or bank can take money from your wages or accounts and give it to your creditors (people you owe money to)

Question 8

What is a writ of execution?

Answer 8

allows the court to seize and sell your assets (take all your stuff).

Question 9

What is bankruptcy?

Answer 9

a person gives up control of their assets and finances (either voluntarily or by court order) and given protection from their creditors.