learning outcome A Flashcards
business BTEC unit 3
unit of account (definition)
anything that allows the value of something to be expressed in an understandable way.
means of exchange (definition)
money allows goods and services to be traded without the need for a barter system.
store of value (definition)
refers to any asset whose value can be used now or in the future
legal tender (definition)
money that has a legal sanction by the government behind it. It means money under the law of land
how is the role of money influenced?
external influences and trends
personal attitudes
interest rates
life stages
life events
culture
culture definition (Role of money)
Your religious beliefs or ethical principals may shape the role that money plays in your life and how you view and use it
life events definition (Role of money)
The importance of money may change depending on certain life events. For instance when you first buy a home
external influences (Role of money)
The state of the economy and the jobs market may mean that money plays and bigger or less valuable part of your life.
interest rates (role of money)
Interest rates may impact what you decide to do with your money.
if interest rates are low this is a good opportunity for borrowing but not for saving as you receive less interest.
if interest rates are high it may be a good time to increase your savings but would not be a good time to borrow.
what are the 5 stages of life?
childhood
adolescence
young adult
middle age
old age
financial needs and implications of the childhood life stage
financial needs:
limited needs
reliant on parents
implications:
money from parents (pocket money)
spent on non essentials
may be encouraged to save
financial needs and implications of the adolescence life stage
financial needs:
want independence
less reliant on family
start socializing away from home
implications:
still reliant mainly on money from parents
may looks for a job
get cash as gifts & save for larger purchases
financial needs and implications of the young adult life stage
financial needs:
university/ early career
more independent
buying cars, renting, buying homes
starting a family/ getting married
implications:
student loan
car finance and borrowing
job & mortgage
eligible for credit cards
financial needs and implications of the middle age life stage
financial needs:
implications:
financial needs and implications of the old age life stage
financial needs:
implications:
