Unit 2: Practices of Managing Money ( Understand the concept of …
Unit 2: Practices of Managing Money
Understand documentation for pay and pay calculations.
Explain how tax is calculated for the self-employed
Explain the two tax documents (P45 and P60).
Describe the various components of a payslip.
Calculate various payments using a payslip.
Understand the concept of
Identify sources of financial planning information and advice
Financial service providers (banks, building societies, credit unions)
Advisory services (CAB, Money Advice Service, charities, financial advisers)
Distinguish between short and long-term planning.
Needs and wants
Long-term: planning for retirement; purchase of ‘life long’ goods ie
Explain the personal factors which influence financial planning.
Factors influenced by stage in life cycle
Attitude to risk
Describe the need to review and adjust financial plans linked to the various stages of the personal life cycle.
Anticipating foreseen and unforeseen events
Priorities change when moving from one stage of life cycle to another
Plan should be fluid
Outline the need for financial planning
Helps show what you have to do to get to where you want to be
Help make decisions on savings, spending and progress in reaching goals
Avoid unnecessary debt
Make better financial decisions
Understand the link between
personal financial budgets and
Demonstrate how spending choices affect a personal financial budget.
Outline the impact of personal spending on society.
Use basic calculations when making spending choices.
Understand the key features of, and behaviours associated with, a balanced personal budget.
Outline how an individual can manage budget surpluses and shortfalls.
Calculate the impact of different interest rates on a budget.
Identify the key features of a personal budget.
Calculate the impact of foreign exchange on a budget.
Understand the tools used in
Compare the different channels for managing money.
Describe the tools used to transfer money and how they are useful in keeping a track
of money and spending.
Understand the true cost of spending.
Identify and explain hidden charges.
Calculate the true cost of spending
Define the term ‘value for money’.
Describe the consequences of over spending on a personal financial budget.
Describe the consequences of over spending on the economy.
Describe the consequences of borrowing on a personal financial budget.
Describe the consequences of borrowing on the economy.
Calculate the cost of borrowing.
Describe the consequences of payment default both on personal finance and society.
Explain the features of borrowing products.