Topic 9 key terms(budgets and forecasting)

Question 1

aspirations

Answer 1

definition: Things or experiences that people would like to have in the
future,e.g-owning a home instead of renting

Question 2

ATM

Answer 2

definition:Automated teller machine

Question 3

balance

Answer 3

definition: Income minus expenses

Question 4

budget

Answer 4

definition: A plan of expected incomings and outgoings over a set time
period such as a month

Question 5

budget balance

Answer 5

definition: Total income minus total expenditure: a person’s net financial
situation

Question 6

budget deficit

Answer 6

definition: situation in which outgoing exceed income

Question 7

budget surplus

Answer 7

definition: A sum of money available once all the essential expenditure in a
given

Question 8

cash flow forecast

Answer 8

definition: plan of expected incomings and outgoing over several time periods, such as the next three months

Question 9

chancellor of exchequer

Answer 9

definition: The British Cabinet minister responsible for financial and
economic matters and in charge of the Treasury

Question 10

consumer price index(CPI)

Answer 10

definition: One of the means the government uses to measure inflation,calculated by checking the price of a representative sample of goods on a monthly basis

Question 11

credit history

Answer 11

definition: record of money borrowed and repaid by an individual,records are held by credit reference agencies and providers will check the individual’s credit history when a prospective
customer applies for a borrowing product

Question 12

current account

Answer 12

definition: Bank or building society accounts where people can store their
money in the form of electronic balances and withdraw it to make payments

Question 13

discretionary expenditure

Answer 13

definition: Voluntary spending on products and services that people want
now,and savings towards items they aspire to buy in the future

Question 14

dividend

Answer 14

definition: A payment of profits from a company to its shareholders, often
at twice-yearly intervals

Question 15

duty

Answer 15

definition: tax paid on certain items, including fuel, cigarettes and alcohol

Question 16

essential expenditure

Answer 16

definition: Spending on items required to live, eg rent or mortgage
repayments, food and drink

Question 17

income

Answer 17

definition: Earnings, savings and interest payments received within a certain time frame

Question 18

income tax

Answer 18

definition: Tax paid on earnings from employment, self-employment and
interest on savines

Question 19

inflation

Answer 19

definition: rise in prices, which means that the purchasing power of money falls

Question 20

insurance

Answer 20

definition: Products that give financial protection against certain events,e.g-travel insurance

Question 21

investments

Answer 21

definition: Money paid into financial products; the aim is that the value of
the product will grow over time

Question 22

mandatory expenditure

Answer 22

definition:compulsory outgoings,they must be paid,e.g-road insurance

Question 23

mortgage

Answer 23

definition: loan taken out to pay for a property,usually over a long term

Question 24

national insurance contributions

Answer 24

definition: Money deducted from the pay of people who are employed or self-employed and used by the government to fund state pensions and other benefits.

Question 25

needs

Answer 25

definition: Things that people need to survive, such as food

Question 26

office for national statistics

Answer 26

definition: The independent organisation that produces statistics on many aspects of life in the UK such as employment

Question 27

pension

Answer 27

definition: income that people receive after retiring from work,in the UK
people receive a pension from the state and can have private pensions

Question 28

premium bonds

Answer 28

definition: lottery bond, issued by NS&I, entered into a monthly prize draw with tax-free prizes or ‘premiums’

Question 29

real terms

Answer 29

definition: A value adjusted to account for changes in prices

Question 30

retail price index (RPI)

Answer 30

definition: One of the ways the government measures inflation,
calculated by checking the price of a representative sample of
goods monthly,unlike CPI it also
takes into account mortgage interest payments and other costs associated with home ownership.

Question 31

self-employment

Answer 31

definition: Earning an income by selling your goods or services directly to a
consumer,rather than being employed by somebody

Question 32

transaction

Answer 32

definition: Buying or selling something

Question 33

utility

Answer 33

definition: essential public service, such as electricity, gas, water

Question 34

wants

Answer 34

definition: Things that people would like to have but can survive without,such as entertainment