Learning Aim A Flashcards
Account statement
A record of your activity over a specific period of time
Unit of account
You exchange money for an equivalent value of goods
Means of exchange
Buy, sell or exchange
Store of value
It can be stored e.g banks
Legal tender
National currency of a country an official method of payment
Personal attitudes
Towards risk and rewards
Life stages
Moving houses or made redundant
Culture
Religious belief and ethical principles
Life events
Moving house or made redundant
External factors
State of economy or availability of jobs
Good credit rating
Will be able to borrow money
Advantages of planning expenditure
Not spending money on unnecessary goods
Means you are able to save money
Savings can be used to fund purchases and unexpected expenses
Risks of not planning expenditure
Can get into debt
Have insufficient funds
Poor credit rating/ can affect your ability to borrow money
Legal action taken against you/ can lead to repossession
Not able to save in the future
Something that is owned or due
Debt
Costs
An amount to pay or buy or use a good service
Repossession
To retake possession of something
Insurance
An agreement providing guarantee of compensation for specific loss of damage
Bankruptcy
Not having enough money to repay outstanding debts
Credit rating
Estimate the ability of a person to fulfil their financial commitments
Solvent
The ability to meet day by day expenditure
Inflation
Price of goods is rising consequently the purchasing power of the currency is falling
Cash
Used to exchange goods, debt or service
Advantages of cash
Easier to budget your money
Doesn’t get you into debt
Disadvantages of cash
Cash can be easily lost/stolen
May have an emergency but not enough cash to cover costs
Cheques
An order to a bank to pay a stated sum from the drawers account
Advantages of cheques
If cheques lost it doesn’t matter as the money won’t be lost
Only the names recipient can receive the money
Disadvantages of cheques
It takes three working days to transfer money
Not many shops accept them
It can easily be tempered with which leads to fraudulent payment transactions
Debit card
A card that has your own money on
Advantages of debit card
Don’t have to carry cash around
If card is stolen nobody can use it without the pin
Keeps your money safe
Disadvantages
If you forget your pin you won’t be able to use the card
Risk of the card holders overspending
Credit card
It’s a card that has your money and you can borrow funds
Inflation
The rise in general price level in an economy measured by CPI
Credit card
A physical payment card that allows you to get credit from a financial institution
Advantages of credit card
Can spread costs over period of time in instalments
Disadvantages of credit cards
Limited use
Extra fees
Can get trapped in debt
Cheque
Is an order to bank to pay a stated sum from the drawers account, written in a specially printed form
Advantages of a cheque
Can be traced, if lost
Can be drawn at any time
Less risk of miscounting
Disadvantages of a cheque
Are not legal tender and creditors may refuse to accept it
Can be time consuming to process
May be valueless of the drawer has no funds in their account
