Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

h.e🍽 > Money Matters > Flashcards

Money Matters Flashcards

1
Q

What is budgeting?

A

Budgeting is a skill that involves prioritising spending

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Why formulate a budget?

A

To balance income and expenditure

To avoid overspending

To avoid debt

To ensure you have money for emergencies

Allows you to plan for the future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are needs?

A

Things you must have to live a basically healthy life eg food, clothing, electricity, fuel, heating, healthcare, shelter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are wants?

A

Things that you’d like to have in order to improve the quality of your life eg hobbies, eating out, holidays, fashionable clothes, bigger house, a car, electronic devices.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Consequences of poor financial management

A 
Debt
Forced to take out loan/use credit card
Forced to borrow from parents 
Inability to achieve goals
Loss of home
Relationship difficulties 
Stress and related illnesses
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How might a home budget planner help one plan for financial future?

A

Can see income and expenditure/outgoings
Help work out needs and wants
Help you figure out where you can save
Help you work out weekly, monthly and yearly bills

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Main financial priorities when getting a home of your own

A 
Electricity/phone/gas/oil bills
Food
Bank/credit card statements 
Basic furniture
Essential appliances
Mortgage/rent
Home insurance
Travel
TV licence
Home maintenance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Where would your income come from?

A 
Salary/wages
Government benefits (children, caring for someone, out of work, injured and can't work)
Savings
Investments
Lodger
Pension
Student loan
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Balance

A

A figure representing the difference between credits and debits in an account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Cash positives

A 
In some cases, a discount can be negotiated 
Consumer feels more in control
Can see how much spent
No further payments to be made
No interest
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Cash negatives

A 
Inconvenient to access from ATM, limit on ATM machines
Can't buy online
Can't trace if stolen
Temptation to overspend
Safety issues when carrying
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Cheque positives

A

Useful if you don’t want to carry large sums of cash
Exact total cost can be paid even if unknown beforehand
Less risk of theft
Easy for postage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Cheque negatives

A

Must have bank or building society account
Some retailers no longer accept payment by cheque
If cheque book lost, risk of signature being forged

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Debit card positives

A

No interest
Cash back
Don’t have to carry large sums of cash or bulky cheque book
Some can be used abroad

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Debit card negatives

A

Temptation to overspend as not handing over physical cash and with overdraft facility (safety net)
Need bank account
Sometimes you can get charged for withdrawing cash

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Store card positives

A

Similar advantages as credit card

May get special offers, invites to sales, extra discount, loyalty points etc

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Store card negatives

A

Rates of interest are often higher than for most credit cards
Can encourage impulse buying and excessive spending
If regular monthly payments not made, increases risk of debt

18
Q

What is hire purchase?

A

A credit agreement that allows a consumer to borrow money from the credit provider
Large chains such as furniture and electrical shops and car dealerships

19
Q

Hire purchase positives

A

Can be interest free if paid back regularly

20
Q

Hire purchase negatives

A

Could end up in debt
Could seize item if monthly payment not paid
May end up having to pay interest if payment schedule isn’t strictly adhered to.

21
Q

Credit card positives

A

Useful for buying online
Convenient to carry
Might get interest free period
Spreading out cost over long period of time
Extra protection if company goes bust (have to spend at least £100 a month) or against fraudulent purchases

22
Q

Credit card negatives

A

Risk of overspending
Risk of credit card fraud
Interest rates higher when used in an ATM machine
If balance isn’t paid in full each month, interest added, increasing risk of debt

23
Q

What is a credit limit?

A

A total amount of money that the consumer has access to

24
Q

Every month, the card holder is sent a bill and has 3 options…

A

Repay minimum amount (could be as little as £5)
Repay proportion of bill
Clear bill in full

25
Q

The best credit card deal is usually the one with the…

A

Lowest APR (annual % rate)

26
Q

What does APR do?

A

Takes into account the interest payable loan, plus any added charges

27
Q

In what circumstances might someone decide to use a credit card?

A

Spread cost of major purchase even though they’ll have to pay interest

Mismanaged budget and cannot afford essential everyday items - may end up in debt

Might like the convenience of credit card and know they can pay bill at end of each month in full therefore occurring no interest

28
Q

Why shop around for good deals?

A

To save money and get good value for money

29
Q

Why plan and stick to a budget?

A

To avoid overspending and debt

30
Q

Why open, check and pay bills?

A

To help keep track of spending

31
Q

Why put money aside for emergencies, treats and luxury items?

A

To ensure you aren’t forced to borrow/use credit cards

32
Q

Why prioritise needs over wants?

A

To ensure you stick to your budget and avoid overspending

33
Q

Why plan meals?

A

To avoid waste and therefore money loss

34
Q

How to shop around for good deals

A

Use money off coupons

Use loyalty cards wisely

Buy in bulk with special offers

Buy non-branded/economy line goods

Use interest comparison websites

Use ‘price per 100g’ signage on shelves to compare prices

35
Q

How to plan and stick to a budget

A

Do one big food shop a week

Use budget planner to identify income and spending and be realistic about what you can afford

Plan menus in advance and write shopping list

Keep record of spending

Open, check and pay bills

Use direct debit to pay for certain services e.g. phone bill

36
Q

How to open, check and pay bills

A

Check receipts against your bills and statements to ensure that you haven’t been overcharged

Keep record of spending

37
Q

How to put money aside for emergencies, treats and luxury items

A

Open savings account and deposit money into it regularly

Manage budget

Spend on needs first, then buy wants with money ‘left over’

38
Q

How to prioritise needs over wants

A

Shop online to avoid impulse buys

Keep record of spending

Use budget planner to identify income and spending and be realistic on what you can afford

39
Q

How to plan meals

A

Buy food in season

Write a shopping list

Cook meals from scratch

Use up leftovers

Do one big food shop a week

Look for longer shelf life

40
Q

Signs that a family is mismanaging its finances

A

No budget planned
No prioritising of needs and wants
Impulse buying and credit card left unchecked
Sliding into creeping debt
Bills and statements unopened and unchecked
Spending on what you can’t afford

h.e🍽 (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions