Topic 1: Needs, Wants & Aspirations Flashcards
Affordability
An important concept in helping people to choose financial products, based on budgeting and forecasting to help individuals decide what they can afford to spend
Aspirations
Things or experiences that people would like to have in the future. For example, owning a home instead of renting, having a luxury holiday or buying a sports car.
Attitudes
People’s thoughts and feelings, at a given time and place, about another person, event or issue. Usually quite generous and limited to socially significant issues or events, they can be changed by circumstances, events, experience or advice.
Belief
Specific and detailed personal convictions about how things are. They can be religious but also otherwise, and can be ‘absolute’ (A is acceptable but B is not) or ‘causal’ (cause A leads to effect B).
Capital
The money or other assets owned by an individual or a business. In the case of a financial services provider, it refers to the funds
provided by the shareholders, not deposits from customers
Consumer credit
This is another term used for borrowing. It is important to
understand that ‘taking credit’ or ‘buying on credit’ refers to
borrowing. However, a credit into a bank account means paying money in
Credit Card
A card that allows the holder to make purchases face to face,
online or over the phone, and to withdraw cash from an ATM.
Unlike a debit card, where the money is taken from the holder’s own account, transactions are paid by the card provider. The card holder repays the amount owed to the provider either in one payment or in instalments. The provider charges interest on cash withdrawals from the time the withdrawal is made and on
purchases after a certain period
Culture
A society’s set of norms about behaviour and attitudes across
social groups. It indicates what society considers to be
acceptable and unacceptable.
Deposit
A sum of money placed by a customer with a financial services provider.
Distribution channel
The medium through which information is transferred to its
intended recipient, eg email or telephone. In financial services, it refers to the way a customer can contact their provider and
manage their account. It is also referred to as a communication
channel.
Ethical investing
When someone chooses to save in a way that means the money
will be used for what that individual considers to be good
purposes. Ethics are a set of ideas about what people believe is morally right
Feedback effect
The notion that thoughts and feelings have a direct influence on behaviour. As expectations can be self-fulfilling, people’s own attitudes affect the outcome of events.
Hire purchase
A type of secured consumer credit to finance items such as cars and furniture, which involves the borrower repaying over a number of years.
Investments
Money paid into financial products; the aim is that the value of the product will grow over time and so the person will eventually receive back more money than they paid in. Investments are a way of saving over the medium or long term.
Life assurance
A type of insurance policy that pays out a sum of money if the
insured person dies.
Life cycle
The stages through which people pass between birth and death, including childhood, teenage years, young adult, mature adult and old age. Not everyone passes through all stages (for instance they might die at an early stage) and not everyone passes through the stages at the same age.
Marketing
Advertising, selling and delivering products to customers. Everything a company does to acquire customers and maintain a
relationship with them, including promotion and public relations
(PR).
Mortgage
A loan taken out to pay for a property, usually over a long term such as 25 years
Needs
Things that people need to survive, such as food, basic clothing and a place to live
Peers
Our equals – people in the same position as us, for instance, of
the same age
Pension
An income that people receive after retiring from work. In the UK people receive a pension from the state; some people also
receive pension payments from schemes run by their former
employers or arrangements that they have made for themselves.
Personal loan
A product that allows someone to borrow a fixed amount over a
fixed period at a fixed rate of interest.
Promotion
Paid-for marketing activities, including advertising. It includes all activities that aim to communicate with people; inform them of goods and services; and persuade them to buy.
Product placement
An aspect of public relations (PR) involving a product appearing
on a TV show or in a film
Public Relations (PR)
A specific part of promotion known as ‘below the line’
expenditure. It is advertising that is not paid for directly but
which keeps a business’s product in the public eye. It is the part of promotion in which the entire message is implicit
Repossession
A legal process whereby a financial institution (eg a mortgage lender) takes ownership of an asset, often a house, because loan repayments relating to that asset have not been met.
Repossession is the last resort in the process of recovering
money owed.
Risk tolerant
Willing to take risks
Secured loan
A loan secured against an asset, such as a house. If the borrower
does not keep up repayments on the loan, the lender can seize
the asset and sell it to recover the money owed
Sponsorship
An aspect of public relations (PR) involving a business paying for
a sporting or entertainment event or venue. It can advertise at the event and in the promotional materials, and the business name may be included in the event or venue name
Values
General feelings about desirable behaviour and goals, ie involving concepts of ‘good’ and ‘bad’ and of how people think
things ought to be
Wants
Things that people would like to have but can survive without,
such as entertainment or fashionable clothes.
