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CSEC Social Studies > Reasons/benefits of savings > Flashcards

Reasons/benefits of savings Flashcards

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1
Q

What are savings?

A

Savings are the unused portion of disposable income
- the money people keep for use at a later stage

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2
Q

Reasons for saving

Why do people save?

A
  • to finance unforseen or unexpected expenditure e.g. medical bills and car repairs
  • finance the purchase of expensive items e.g. a house
  • provide collateral for a loan
  • improve their education
  • pay for their child’s education at tertiary level
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3
Q

Why do people save?

A
  • to invest in securities such as company shares, government bonds and treasury bills, to earn income
  • provide financial security following retirement or loss of work
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4
Q

Why do people save (general answer)

A

People save for different answers, which are usually concerned with increasing a sense of worth and security

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5
Q

What benefits so savings bring for an individual

A
  • better able to satisfy needs and wants
  • having a greater sense of security
  • develop self-control ans discipline
  • able to consider early retirement
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6
Q

How can savings benefit a country

A
  • individuals are investing in local companies
  • investment in government bonds and treasury bills
  • provide govenment with funds to invest in the country
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7
Q

How can savings benefit the region?

A
  • investment in local businesses benefits the region
  • allows businesses to expand and so create employment
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8
Q

What factors influence savings

A
  • individual’s ability to save depends on the size of disposable income
  • disposable income is affected by trends in prices of food, housing and utilities
  • individual must have personal committment to limiting spending and consumption
  • individual belief that savings will bring greater benefits in the future
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9
Q

Keeping cash at home is a a form of savings.
True or False

A

True

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10
Q

What are the disadvantages to saving by keeping cash at home

A
  1. money is vulnerable to theft
  2. does not attract any interest
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11
Q

Name facilities for savings

A
  1. commercial banks e.g. Scotiabank
  2. life insurance companies e.g. Tatil,
  3. finance houses
  4. credit unions
  5. friendly societies
  6. investment trusts, unit trusts
  7. building societies
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12
Q

What forms of savings do commercial banks offer

A
  • savings deposits
  • term deposits
  • retirement savings plans
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13
Q

What forms of savings can you get from life insurance companies

A
  • retirement savings plans
  • endowment plans
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14
Q

What form of savings do financial houses offer

A

Term deposits

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15
Q

What form of savings do credit unions offer

A
  • shares
  • deposits
  • savings
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16
Q

What form of savings do friendly societies offer

A

savings deposits

17
Q

What form of savings do unit trusts offer

A
  • term deposits
  • mutual funds
18
Q

what form of savings is offered by building societies

A

savings deposits

19
Q

what are characteristics of credit unions

A
  • are financial cooperatives that are owned and controlled by their members
  • usually has a common bond, such a membership in a group or organisation
  • which determines the people who can join
  • examples Police credit union, UWI credit union, Eastern credit union
20
Q

Outline the

Benefits of credit unions to consumers in the region

A
  1. promote thrift among members
  2. regular savings
  3. lower interest on loans
  4. dividend on shares
  5. financial counseling
  6. easier access to loans and other financial services
  7. patronage refund
  8. self-discipline and self-reliance
  9. sense of ownership
  10. promote community development
21
Q

Name and explain 1 informal savings in the Caribbean

A
  • sou sou
  • form of saving where a group of people contribute equal amount of money to a common pool
  • for a period of time (e.g. months)
  • after period of time is up, one group member gets all of the money (called a hand)
  • this is repeated until all the members in the sou sou has had a turn and received the lump sum at least once
  • sou sou allows members to purchase larger commodities while only having to make manageable contributions to the group

CSEC Social Studies (8 decks)

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