Year 11 Unit 2 LIBF Topic 5 | Baamboozle - Baamboozle

English 15 Public

Personal finance decisions

Study Slideshow

#economy #personal finance

Describe a personal loan

Lump sum of borrowed money to buy a big purchase, such a car, house repair. Will have interest added on.

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Describe credit cards. What is their main purpose?

Borrowed money from a lender, usually with interest added. Allows consumers to purchase now and pay later.

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What is a store card?

Similar to a credit card that is used only in one particular store.

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Explain the impact of having a credit card or store credit on personal budgets

Can be good as allows for emergency / spur of the moment purchases. Can be bad as interest has to be added and paid back which might affect budgeting

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Give an advantage of buy now pay later

Allows consumers to purchase the items needed/wanted quickly, allows for items to be paid in 3 or 30 days, easy to use,

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How much does the government recommend is in an emergency fund?

Roughly 3-6 months worth of essential expenditure

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Give an example of non essential spending and spur of the moment purchases

Clothes, days out, holidays, luxury items,

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Why is it important to have an emergency fund?

In order to be able to pay for items that we may need, to cover any issues that have happened, fix things, not worry about money

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What is the economic cycle?

The way that the economy will behave dependant on factors such as demand, inflation, recession etc

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Explain the impact of decreased consumer spending

Decreased consumer spending = less money in the economy, less demand, workers are laid off.

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The economy is influenced by how much we spend as consumers. True or false?

True

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The Essential spending in a household might include Netflix. True or false?

False

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Credit cards often come with interest free periods to entice consumers to take out the card and to encourage spending

True

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You can only have one store card at a time. True or False?

False

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Give a disadvantage of buy now pay later

If not budgeted for the payment could lead to debt. Credit scores can be affected if not paid on time. People may buy more than can be afforded

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