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A1: Functions and role of money - Coggle Diagram
A1: Functions and role of money
Functions of money
Unit of account
legally recognised as a form of payment
Means of exchange
to trade
Store of value
saving to spend later
Legal tender
place value on items
Role of money is affected and influence by a number of factors:
Personal attitudes towards:
Risk
Reward
Borrowing
Spending
Saving
Life stages
childhood
adolescence
young adult
middle age
Old age
Planning expenditure, common principles to be considered in planning personal finances
to avoid getting into debt
to control costs
avoid legal action and/ or repossession
remain solvent
maintain a good credit rating
avoid bankruptcy
to manage money to fund purchases
generate income and savings
set financial targets against loss or illness
counter the effects of inflation