Money and Budgeting Flashcards
What is a credit card
Issued by a financial institution, usually for an annual fee. It enables a consumer to spend up to a predetermined level. Card holders receive a monthly statement and can pay back the debt in full or part which incurs interest.
advantages and disadvantages of a credit card
Advantages:
- Convienince
- Fraud protection: the money isn’t actually yours
-Rewards
Disadvantages:
-Interest
-Potential to overspend
-Debt
Definiton of a budget
Definition: A budget is a financial plan that shows expected future receipts and expected future payments over a given period of time.
Reasons for a budget
-manage your money so that you can purchase goods and services without getting into financial difficulties
-manage your spending so that you have cash available to make a desired purchase eg a car
-reflect on your spending habits and find areas where you might be spending too much
What is credit rating
A system used by financial instutions or companys based on the borrower that generally determine the likelihood the borrower will pay the money back.
If an individual has a bad credit file they might not be able to qualify for a credit card or home loan.
What do you have to be careful of when paying on line
When purchasing items online:
Always use a safe method to pay with - PayPal, BPay or credit card
Careful of hidden costs
Use secure websites
Buy from an Australian company if you can so that you can be protected by Australian Consumer Law
What is bad about online purchasing
- sketchy websites
- fraud
How to check for a bad website/ scam email
- check the email address/url
- check the company
- check for https
-check for reviews left
HEADINGS FOR A BUDGET
Estimated Cash receipts
…
Total Reciepts
Estimated Cash Payments
….
Total Payments
Excess of Reciepts over Payments
Bank balance at beginning
Estimated Bank Balance at the end
What is superannuation
money put aside by your employer over your working life for you to live on when you retire from work
How do you increase your cash (for a budget)
Earn more income - work more hours delivering papers or do some extra work around the house in order to get rise in pocket money.
Cut back on some payments – (e.g. not buying magazines $30 and CDs $30 which would save her $60. $60 + $335 = $395. She could also spend less on clothes (at least $5).
