business studies

    Cards (374)

    • Personal finance
      Understanding why money is important and how managing your money can help prevent future financial difficulties
    • You will make important financial decisions throughout your life. The choices you make will not be without some risk and need to be taken very carefully.
    • This unit will help you understand how to manage your personal finances and make informed decisions to help prevent future financial difficulties.
    • Money
      Flows in two directions, into your ownership and out. Money comes in from various sources including wages, gifts and savings. Money goes out to pay for necessities and wants.
    • Ability to handle money received, and to control money paid
      • A fundamental requirement for personal and business success
    • Unit of account
      It allows us to place a monetary value on goods and services
    • Means of exchange
      It allows us to trade
    • Store of value
      It allows us to use it in the future as it keeps its value
    • Legal tender
      A legally recognised form of payment
    • Interest rate
      The cost of borrowing money or the reward for saving money
    • The Royal Mint sets rules on what is legal tender
    • Personal attitudes
      Individuals will vary in their attitude to risk and reward as well as saving and borrowing
    • Life stages
      As you grow up from childhood to adulthood, your financial needs change
    • Financial needs and implications at different life stages
      • Childhood
      • Adolescence
      • Young adult
      • Middle age
      • Old age
    • Debt
      Money owed
    • Credit rating
      A score given to individuals on how likely they are to repay debts based upon their previous actions
    • Bankrupt
      When an individual or organisation legally states its inability to repay debts
    • Solvent
      The ability to meet day-to-day expenditure and repay debts
    • Inflation
      A general rise in prices, leading to the value of money falling
    • Common principles in planning personal finance
      • Avoid getting into debt
      • Control costs
      • Remain solvent
      • Maintain a good credit rating
      • Avoid bankruptcy
      • Counter the effects of inflation
      • Provide insurance against loss or illness
      • Generate income and savings
      • Manage money to fund purchases
      • Set financial targets and goals
    • One of the functions of money is as a means of exchange
    • Methods of payment
      • Cash
      • Debit card
      • Credit card
      • Cheque
    • Cash
      • Most widely accepted form of exchange, physical not virtual, makes budgeting easier, can be lost or stolen, threat of counterfeit, only appropriate for small purchases, cannot be used online
    • Debit card
      • No need to carry cash, secure method of payment, widely accepted, suitable for online transactions, short time lapse between transaction and money being withdrawn may result in overspending, not accepted for small transactions
    • Credit card
      • Allows a period of credit that is interest free, widely accepted, loyalty schemes offered, offers protection on purchases, suitable for online transactions, interest charged on balances not paid off, can encourage overspending and debt, interest charged on cash withdrawals, credit limit set
    • Cheque
      • Low risk form of payment as can only be cashed by named payee, widely accepted for face-to-face transactions
    • Contactless card
      Cards containing antennae allow money to be transferred when the card touches a contactless terminal
    • Contactless card
      • Gaining in popularity
      • Secure method of making payments
    • Contactless card
      • Often only accepted for relatively small transactions
      • Still not widely accepted as seen as new technology
    • Charge card
      Issued by financial institutions allowing customers to delay payments for goods and services for a short period of time; the balance must be paid off in full when a statement is issued
    • Charge card
      • Reduces risk of running up debts
      • Allows a short period of credit
      • Avoids the need to carry cash
      • Often offers additional perks
    • Charge card
      • Must be paid in full each month
      • Often an annual fixed fee is applied
    • Store card
      Issued by a retail outlet so that customers can delay payments for goods and services (similar to a credit card but only accepted by stores specified)
    • Store card
      • Allows a short period of credit that is interest free, e.g. one month
      • Often offer loyalty schemes, discounts and special promotions or privileges
    • Store card
      • Only accepted in issuing store or linked associations
      • Interest is paid on outstanding balances
      • Can encourage overspending and result in a consumer getting into debt – particularly if they hold multiple cards
    • Mobile banking
      The ability to carry out financial transactions using mobile devices such as phones or tablets
    • Mobile banking
      • Convenient as can be used at any time and place
      • Secure
    • Mobile banking
      • Features are still limited and hence mobile banking does not offer all of the functionality of Internet banking
    • Banker's Automated Clearing Service (BACS) Faster Payment
      A system that allows the transfer of payments directly from one bank account to another
    • Banker's Automated Clearing Service (BACS) Faster Payment
      • Faster payment allows almost instant transfers that are guaranteed within 2 hours
      • Can be accessed in a number of ways including in a branch, over the telephone and online
      • No additional costs