Unit 2.1 needs, wants and aspirations

Question 1

affordibility

Answer 1

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

Question 2

aspirations

Answer 2

things or experiences that people would like to have in the future, such as a very nice car.

Question 3

attitudes

Answer 3

People’s thoughts and feelings, at a given time and place, about another person, an event or an issue. Usually quite general and limited to socially significant issues or events, they can be changed by circumstances, events, experience or advice

Question 4

beliefs

Answer 4

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).

Question 5

capital

Answer 5

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 customer

Question 6

consumer credit

Answer 6

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

Question 7

credit card

Answer 7

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.

Question 8

culture

Answer 8

A society’s set of norms about behaviour and attitudes across social groups. It indicates what society considers to be acceptable and unacceptable.

Question 9

deposit

Answer 9

A sum of money placed by a customer with a financial services provider.

Question 10

distribution channel

Answer 10

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.

Question 11

ethical investing

Answer 11

When someone chooses to save in a way that means the money will beused for what that individual considers to be good purposes. Ethics are a set of ideas about what people believe is morally right

Question 12

feedback effect

Answer 12

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

Question 13

hire purchase

Answer 13

A type of secured consumer credit to finance items such as cars and furniture, which involves the borrower repaying over a number of years

Question 14

investments

Answer 14

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

Question 15

life assurance

Answer 15

A type of insurance policy that pays out a sum of money if the insured person dies

Question 16

life cycle

Answer 16

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

Question 17

marketing

Answer 17

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)

Question 18

mortgage

Answer 18

A loan taken out to pay for a property, usually over a long term such as 25 years

Question 19

needs

Answer 19

Things that people need to survive, such as food, basic clothing and a place to live.

Question 20

peers

Answer 20

Our equals –people in the same position as us, for instance, of the same age

Question 21

pension

Answer 21

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

Question 22

personal loan

Answer 22

A product that allows someone to borrow a fixed amount over a fixed period at a fixed rate of interest.

Question 23

product placement

Answer 23

An aspect of public relations (PR) involving a product appearing on a TV show or in a film

Question 24

promotion

Answer 24

Paid-for marketing activities, including advertising. It includes all activities that aim tocommunicate with people; inform them of goods and services; and persuade them to buy

Question 25

public relations (PR)

Answer 25

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 implici

Question 26

repossession

Answer 26

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.

Question 27

risk tolerant

Answer 27

willing to take risks

Question 28

secured loan

Answer 28

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 owe

Question 29

sponsorship

Answer 29

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 nam

Question 30

values

Answer 30

General feelings about desirable behaviour and goals, ie involving concepts of ‘good’ and ‘bad’ and of how people think things ought to be.

Question 31

wants

Answer 31

Things that people would like to have but can survive without, such as entertainment or fashionable clothes