term three content Flashcards by Kulthum Chogle

-what are the different types of income?

-salaries or wages
-government social grants and pension
-family and friends
-business profits or investments
-casual wages
-rent income
-pension
-UIF (unemployment insurance fund)

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-what are factors that influence expenditure patterns?

what creates the expenses

-household composition
-financial resources and disposable income
-needs
-location
-preferences

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-how do you manage your budget ?

-by preparing a household budget to manage finances

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how does a household budget help ?

-reduces expenses
-sets financial goals
-ensures financial balance
-prevents debt

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what are the disadvantages of not having a budget

-debt
-paying interest on debt
-lose control money spending and credit
-waste money on unnecessary things

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what are the disadvantages of not having a budget

-debt
-paying interest on debt
-lose control money spending and credit
-waste money on unnecessary things

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what are the principals of budgeting

what to take into consideration when budgeting

-assess needs and objectives: needs should come first
-control and record spending: watch how you spend your money
-prepare for unexpected incidents: putting money aside for a rainy day

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what are the steps to preparing a household budget?

-list income
-estimate expenses (fixed and variable expenses)
-compare income and expenditure
-evaluate the budget

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how to balance a budget?

-getting the needs before the wants (only if necessary)
-set realistic financial goals
-make sure you’re keeping an accurate record of spending amount
-make sure money is set aside for unexpected expenses

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what are the different types of bank accounts?

-savings account
-current account: can do everything on here

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what are the ways to reduce bank charges?

-use a cheque, debit or credit card instead of cash
-use online banking instead of physically going to the bank
-use your bank provider to reduce additional fees
-do smaller withdrawals instead of larger ones
-ensure there’s always money on the account to avoid penalties

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what are the methods of purchasing goods and services

-cash transactions
-debit cards

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what are the advantages of cash transactions

-immediate payment
-ideal for small purchases
-convenient

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what are the disadvantages of cash transactions

-unsafe
-time consuming to count money
-irreplaceable
-difficult to prove payment

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what are the advantages of debit cards

-guaranteed payment once accepted
-can be used for online purchases
-deducted immediately from payers account

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what are the advantages of debit cards

-guaranteed payment once accepted
-can be used for online purchases
-deducted immediately from payers account

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what are the disadvantages of debit cards

-takes atleast three days to be deposited into business account
-bank fee for transactions
-fraud
-will only work if there’s funds

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what’s a credit account

-allowing customers buy goods on credit uptil a special amount

what’s the advantages of a credit account

-ownership of good are immediate
-customers can pay monthly for goods

what’s the disadvantages of a credit account

-item selling price is higher
-buyer may be tempted to buy unnecessarily
-interest on items add up

what’s a credit card

-card that can be used at any store, customer purchases goods and pays for them at the end of the month

what’s the advantages of a credit card

-businesses are guaranteed payment
-can be used for online orders
-budget facilities are accommodated (instalment’s)

what’s the advantages of a credit card

-businesses are guaranteed payment
-can be used for online orders
-budget facilities are accommodated (instalment’s)

what are the disadvantages of a credit card

interest

what’s the difference between cash transactions and credit transactions

cash: dependant on available cash credit: not dependent cash: no additional costs credit: interest cash: no debt credit: debt

what are the advantages of internet banking

-quick and easy -can be done from anywhere -balance is updated immediately

what are the disadvantages of internet banking

-hackers may get ahold of your details -identify theft -phishing

why are the advantages of ATM payments

-money transferred immediately -atms are always available -money is always available at atms

what are the disadvantages of ATM payments

-in public -bank charges -security risk -fees for withdrawal from other banks -thieves may steal info

what are the disadvantages of ATM payments

-in public -bank charges -security risk -fees for withdrawal from other banks -thieves may steal info

what’s the national credit act

-states that consumers should made informed decisions before buying on credit

what are the consumer rights relating to credit transactions (NCR) | what are consumers allowed to do

apply for credit without discrimination receive credit agreement in consumers first language

what are the interest rates involving NCR

-interest rate: borrowed money plus interest -initiation fee: charged when a consumer accepts a credit agreement -service fee: charged by banks for transactions -credit insurance: charge is to protect the credit provider if debt can’t be paid -collection costs: charged for collecting outstanding debts from consumer -cost of extended warranty: extended warranty when purchasing equipment -interest in overdue accounts: businesses may charge for unpaid credit accounts

what are the interest rates involving NCR

what’s reckless lending

-when a credit provider lends out money to a consumer who cannot cover monthly instalments

what’s debt counseling

-if debt can’t be paid, consumer has the right to speak to a debt counselor

what’s micro lending

-a small loan regulated by NCA

what are the consumer rights relating to credit bureaus

-be advised by a credit provider that’ll assist with harmful information concerning their credit history -inspect any information concerning them -challenge the accuracy of the information -request an investigation

what happens when removing info from a credit bureau black list

-the bureau removes the records and states how the debt was resolved

what to do when you’re incorrectly blacklisted?

-a bureau or NCR has to investigate the accuracy of the info free of charge -they then have to remove any false information

what is the SABS mark of approval

-south african bureau of standards -if marked with this, a product is approved good quality

what do you do when you receive an unsuitable product

-consumers have the right to return those goods within ten working days and receive a refund

what’s the procedure for lodging a complaint

-approach the dealer or manufacturer: -approach a consumer organisation -take legal action -approach the media