Financial Management Flashcards
Legal consequences of of poor financial management?
May face bankruptcy
What are financial consequences of poor financial management?
- goods or assets repossessed
- wages taken away
What is a creditor?
A Leander
What is a deptor?
A borrower
What is a garentor?
Someone who garentees to pay the money back if the borrower does not.
Steps to a budget:
1 calculate total income
2 record your expenses
3 total your expenses
4 compare your income with expenditure - do you have enough?
5 asses financial position - make modifications
What is the goal of a wise consumer?
Getting the greatest satisfaction from their money in the long and short term
A plan of how to use/save your money :
Budget
Income:
The money a person earns.
Cost that you pay/ money you spent:
Expenditure
4 steps to take when getting a loan
- decide how much you need to borrow
- decide if you have enough savings for a deposit
- endure your income is enough to meet your loan repayment
- shop around and compare loans
Interest
Payment made for use of money that has been borrowed
Why do lenders charge interest?
- to make money from their money lending services
- to account for risk
Lower risk : ?
Lower interest
Secured personal loan
Loan secured by asset (car/house)
