Planning Expenditure, Common Principles to be Considerd In Planning Personal Finance

Question 1

Principles considered in personal finance (11)

Answer 1

Avoid getting into debt, control costs, avoid legal action or repossession, remain solvent, remain a good credit rating, avoid bankruptcy, mange money to fund purchases, generate income and savings set financial targets and goals, provide insurance against loss or illness, counter the effects of inflation

Question 2

To control costs

Answer 2

Budgeting, avoid getting into debt, manage money

Question 3

Avoid legal action or repossession

Answer 3

If you are accused of causing a business to loose money they might take legal action against you to get compensation- might try ans get the money they have lost - for example if you shoplift thru may want compensation - make sure you have insurance

Question 4

What is repossession

Answer 4

It’s a process of recovering items that are in the possession of somebody else

Question 5

Remain solvent

Answer 5

If a person or a company is solvent they have enough money to pay all there debts - do this by generating income and having savings, and setting finiacial targets and goals

Question 6

Maintain a good credit rating

Answer 6

By doing this you can repay debts, controlling bill payments on time, pay loans and credit cards on time

Question 7

Avoid bankruptcy

Answer 7

To do this you need to pay back your debts, control payments, set budgets, cutting, boosting income, also reach our to a debt counselling agency to to help manage debts so you don’t get bankrupt

Question 8

To manage money to fund purchases

Answer 8

Could do this buy keeping a spending diary and keep a note of everything you buy In a month

Question 9

Generate income and savings

Answer 9

A business may generate income from the sales of the products or services

Question 10

Set financial targets and goals

Answer 10

Create your budget , set specific goals, reduce debt use smart goals smart stands for specific m is measurable a is for achievable R is for relevant and T is for time based

Question 11

Other things you can do include providing insurance against loss or illness

Answer 11

Making sure you have insurance

Question 12

Counter the effects of inflation

Answer 12

By looking out for inflation and it’s impact

Question 13

Avoid getting into debt

Answer 13

Controls costs, set budget on card and spending, meet day to day expenditure / debts