Personal Finance (Unit 3) Year 12 BTEC National Extended Certificate

Starter 1) Give three reasons as to why we need money? (3 marks) 2) Identify two disadvantages of a credit card? (2 marks) 3) Describe what is meant by a credit rating? (1 mark) 4) What is the difference between a direct debit and a standing order? (2 marks) (Out of 8)

Aims of today Give feedback from presentations Hand in homework based on Gabriella Common principles for the use of money

Reflection In pairs discuss- How would you rate your own attitude to money? Can you take risks? Can you think of a time when your attitude to money was irresponsible? How would you have behaved differently? What factors influence your attitude to risk? Jot down some of your points in a spider diagram.

Common principles When planning personal finance- the common principles that need to be considered….. Avoid getting into debt Control costs Avoid legal action/repossession Remain solvent Maintain a good credit rating Avoid bankruptcy Manage money to fund purposes Set financial goals and targets Generate income and savings Counter the effects of inflation Provide insurance against loss/illness

Reflection What do you think are the short and long term effects of bankruptcy? Bullet point down 2 points for short term and 2 points for long term.

Different ways to pay Come up with 14 different ways to pay? Can you provide an explanation, list some advantages and disadvantages for each? If not, you need to learn this for your exam.

Current accounts An account with a bank/building society that is designed for frequent use. The features of the different accounts will depend on- What you are looking to get out of the account? Interest rates Credit scoring

Research In groups, you will be given a specific bank/building society and you must find out the following- What are the features of this banks standard, packaged (premium), basic and student accounts. What are they called? What do they require before you can have one? What interest rates do they pay out? What are the terms?

Quick term check What is meant by the following? Debt Credit rating Bankruptcy Solvent

Other methods of payment Pre-paid card Contactless card Charge card Store card Mobile banking Banker’s Automated Clearing Service (BACS) e.g. faster payment Clearing House Automated Payment Service (CHAPS)

Types of borrowing What is borrowing? Overdraft Personal loan Hire purchase Mortgage Credit card Payday loan

Homework Homework will be on SMHW and will need to be completed before next lesson and brought to the lesson to evidence you have completed it. Anyone having difficulty with SMHW must speak to IT.