BTEC Finance MasterGuide – Unit 3 Essentials
for Personal & Business Success
Functions and role of money - Money flowing in and out- it comes in your account and
money comes out your account
store of value - It allows us to use it in the future as it keeps its value
Legal tender - It is legally recognized form of payment- old £1 getting rid of
Role of money - is affected by a wide number of factors. individuals may change their
attitude to money based on their situation they find themselves in
Personal attitudes - individuals that will vary in their attitudes to risk and reward as well as
savings and borrowing.
Life stages - As you grow up from childhood to adulthood, your financial needs change, each
stage of your life has different implication that will affect not just your needs but also your
attitude to money.
Culture - affected by tradition, religion and ethical beliefs, will have different attitudes to
money. The older generation of Chinese people, for example have a culture a
saving.
Life events - Events throughout your life will impact on your attitude to money. These events
may be within your control, for example going to university, travelling abroad, getting
married or starting a family or any be outside your control, example illness, financial gains
and losses
, External influences - Factors outside your control, including the state of the economy. For
example the state of the economy will impact on wages, availability of jobs and the prices of
goods and services. Decisions by the government will affect the amount of the tax you pay or
the amount you receive in benefits. These all directly affect your ability to spend and
save
Interest rates - cost of borrowing money or the reward for saving money
If interest rates are low maybe more willing to borrowing money or spend on credit, when
interest rates are high there is more of an incentive to save
Debt - money that you owe
credit rating - a score given to individual of how likely they are from previously debt based
on your previous action
solvent - the ability to meet day by day expenditure
inflation - Inflation is a general risk in prices. This leads to the value of money falling, that is,
£10 today was worth less that £10 a year ago. Expenditure now can help counter the effect of
inflation
cash - money in coins and notes
credit cards - It's a card that has your money and you can borrow funds
Debit card - It's a card that has your own money on it
Cheque - Its a printed form used instead of cash to make payments from your bank
account
for Personal & Business Success
Functions and role of money - Money flowing in and out- it comes in your account and
money comes out your account
store of value - It allows us to use it in the future as it keeps its value
Legal tender - It is legally recognized form of payment- old £1 getting rid of
Role of money - is affected by a wide number of factors. individuals may change their
attitude to money based on their situation they find themselves in
Personal attitudes - individuals that will vary in their attitudes to risk and reward as well as
savings and borrowing.
Life stages - As you grow up from childhood to adulthood, your financial needs change, each
stage of your life has different implication that will affect not just your needs but also your
attitude to money.
Culture - affected by tradition, religion and ethical beliefs, will have different attitudes to
money. The older generation of Chinese people, for example have a culture a
saving.
Life events - Events throughout your life will impact on your attitude to money. These events
may be within your control, for example going to university, travelling abroad, getting
married or starting a family or any be outside your control, example illness, financial gains
and losses
, External influences - Factors outside your control, including the state of the economy. For
example the state of the economy will impact on wages, availability of jobs and the prices of
goods and services. Decisions by the government will affect the amount of the tax you pay or
the amount you receive in benefits. These all directly affect your ability to spend and
save
Interest rates - cost of borrowing money or the reward for saving money
If interest rates are low maybe more willing to borrowing money or spend on credit, when
interest rates are high there is more of an incentive to save
Debt - money that you owe
credit rating - a score given to individual of how likely they are from previously debt based
on your previous action
solvent - the ability to meet day by day expenditure
inflation - Inflation is a general risk in prices. This leads to the value of money falling, that is,
£10 today was worth less that £10 a year ago. Expenditure now can help counter the effect of
inflation
cash - money in coins and notes
credit cards - It's a card that has your money and you can borrow funds
Debit card - It's a card that has your own money on it
Cheque - Its a printed form used instead of cash to make payments from your bank
account
