Learning Aim A Flashcards
Unit of account
something that can be used to value goods and services, record debts, and make calculations. Allows the value of items to be compared
Culture
Culture allows people to spend money as it’s a time to celebrate.
“The way of life”
Life events
Something important that happens in your life
Birthday- the income of money allows a person to spend
Life stages
The stage that people are at in their life
Childhood, adolescent, old age
Interest rates
The cost of borrowing
Personal attitude
People own attitude towards money
External influences and trends
Something of which you have no control- eg economy
Means of exchange
Money allows the good of services to be traded without the barter system
Store of value
Can refer to any asset whose value can be used now or used in the future. I.e. value can be retrieved at a later date. People can save now and fund later
Legal tender
A legally recognised form of payment that is backed by the government
Solvent
You have the ability to meet financial obligations.
avoid debt
knowing the money going in and going out of your account to avoid overspending and getting in debt
control costs
planning expenditure you are aware of expenses and control costs by making adjustments to finances
legal action/ repossession
a consequence of not planning expenditure is that you could overstretch your finances and become unable to p-ay bills
credit ratings
a credit rating is how trustworthy you are in terms of paying off debts . good money control etc. this will help to borrow money in the future
bankruptcy
this means you are unable to pay debts. you can declare bankruptcy, however, there will be other consequences and any assets will more likely be taken away from you.
manage money
managing finances will allow you to avoid borrowing and avoid debts
income and savings generation
money you have saved from planning your finances can be put to work for you in the form on investments to generate further income.
insurance against loss or illness
planning expenses and having some set aside for unsees circumstances will give you peace of mind that if you lose your job or become ill you’ll have money to cover expenses over a period of time
overdraft
lets you borrow money through your current account by taking out more money than you have in the account
personal loan
allows you to borrow a fixed amount of money, which you pay bank in monthly instalments over a set period of time
hire purchase
paying to use an asset in instalments, to spread the cost. the asset will remain the property of the seller until the final payment is made
mortgage
a long term loan. usually to buy property, it is secured against an asset and usually lasts roughly 25 years
