Learning Aim A Flashcards
Unit of Account
This refers to anything that allows the value of something to be expressed in an understandable way, and in a way that allows the value of items to be compared
Means of exchange
Money allows goods and services to be traded without the need for a barter system. You can easily buy any item using money.
Store of value
This refers to any asset whose value can be used now or in the future.
Legal tender
A legally recognised form of payment that is backed by the government.
Personal attitudes towards money
A set of effective responses to areas of personal finance and finance planning that range from positive to negative.
Life stages
Childhood -> Adolescence -> Young adult -> Middle age -> Old age
Culture
The ideas, customs and social behaviour of particular people or society.
Life events
A very important event in someone’s life, such as marriage, child birth, etc.
External influences
This comes from people, places, things or ideas from the outside of a business.
Interest rates
The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
Avoid debt
Making sure you don’t borrow more than you can repay with your future income.
Control costs
The practice of identifying and reducing business expenses to increase profits.
Legal action/reposession
A legal process where a mortgage lender or secured loan provider takes ownership of a property.
Solvent
Having access in excess of liabilities; able to pay one’s debts.
Credit rating
An estimate of the ability of a person or organisation to fulfil their financial commitments.
Bankruptcy
The inability to pay your debts, leading to the legal process of declaring a business or one’s self bankrupt.
Manage money
This refers to the process of budgeting, saving, investing, spending, or otherwise overseeing their capital usage.
Income and savings generation
Income generation refers to the processes and activities aimed at creating or increasing financial resources for individuals or communities, often through investment opportunities and employment.
Financial targets and goals
Financial goals are targets you define to achieve your financial dreams.
Insurance
An arrangement by which a company or the state undertakes to provide a guarantee of compensation for specific loss, damage, illness, or death in return for a specific premium.
Inflation
Inflation is the general increase in the prices of goods and services in an economy.
Cash
Cash is money in the physical form of currency, such as bank notes and coins.
Debit card
A card allowing the holder to transfer money electronically from their bank account when making a purchase.
Credit card
A plastic card issued by a bank, building society, etc., allowing the holder to purchase goods and services on credit.
Cheque
An order to a bank to pay a stated sum from the drawer’s account.
Electronic transfer
The electronic transfer of money from one bank account to another.
Direct debit
An arrangement made with a bank that allows a third party to transfer money from a person’s account on agreed dates.
Standing order.
An instruction to a bank by an account holder to make regular fixed payments to a particular person or organisation.
Pre-paid cards
They function as a middle ground between cash and bank cards - you can top them up when you need to.
Contactless cards
Allows you to pay for items without entering your pin.
Charge cards
A credit card for use with an account which must be paid in full when a statement is issued.
Store cards
A credit card that can only be used in one store or chain of stores.
Mobile banking
The act of making financial transactions on a mobile device.
Banker’s Automated Clearing Service (BACS)
This is a payment scheme that enables money to be moved electronically between bank accounts.
Clearing House Automated Payment System (CHAPS)
A computer-based electronic network for processing transactions using domestic, low value payments, between participating financial institutions.
Current account
An account at a bank or building society from which money may be withdrawn without notice.
Standard account
These will not charge you for everyday banking if you stay in credit.
Premium account
A bank account into which premiums collected by Agency are deposited and held in trust for the benefit of the company.
Basic account
Offers the same as a standard account just without a check book or overdraft feature.
Student account
A bank account designed for individuals in higher education.
Overdraft
A deficit in a bank account caused by drawing more money than the account holds.
Personal loan
A type of loan where you borrow a sum of money and must pay it back in fixed amounts called instalments.
Hire purchase
A system by which one pays for a thing in regular instalments for the use of it.
Mortgage
A legal agreement by which a bank lends money at interest in exchange for taking partial ownership of the property.
Payday loans
A relatively small amount of money lent at a high rate of interest on the agreement that it will be repaid when the borrower next receives their wage.
ISA
A savings account where as your money grows so you don’t pay tax on the interest you earn.
Deposit and Savings account
A savings account is a type of bank account designed specifically to encourage saving, generally paying interest on the balance of the account.
Premium bonds
Premium bonds are a savings product from National Savings and Investments (NS&I) which offer a chance of winning rather than interest.
Bonds and gilts
Bonds represent the debt of a government, company, or other organisation. Bonds issued by the UK government are known as gilts.
Shares
These represent ownership within a company.
Pensions
A pension is a fund into which amounts are paid regularly during an individual’s working career, and from which periodic payments are made to support the person’s retirement from work.
Risk
A situation involving exposure to danger.
Reward
A thing given in recognition of service, effort, or achievement.
Car insurance
A contract between you and an insurance company that provides protection in case of accidents, theft, or damage to our vehicle.
Home & contents insurance
This insurance covers both the building itself and fixtures as well as personal belongings.
Life insurance
A type of policy that protects your loved ones with financial support if you die.
Health insurance
Insurance taken out to cover the cost of medical care.
Pet insurance
A policy which many pet owners acquire to help them meet expensive veterinary clinic bills.
Travel insurance
Insurance that cover financial losses associated with travelling.
