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Personal Finance Outcome A - Coggle Diagram
Personal Finance Outcome A
Function of money
Unit of account
This refers to anything that allows the value of something to be expressed in an understandable way, and in a way that allows the value of items to be compared.
Means of exchange
Money allows goods and services to be traded without the need for a barter system. Barter systems rely on there being a double coincidence of wants between the two people involved
in an exchange.
Store of value
This can refer to any asset whose “value” can be used now or used in the future i.e. its value can be retrieved at a later date. This means that people can save now to fund spending at a
later date.
Legal tender
Money that has a legal sanction by the government behind it is called legal tender means money under the law of land. It is the money issued by monetary authority or government which cannot be refused by any person in payment for transactions. The tender or payment of it constitutes by law the sufficient discharge of debt.
Role of money
Culture
Life events
Life stages
Interest rates
Personal attributes
External Influences & Trends
Life stages
Childhood
Limited Needs, Reliant on parents, Purchases sweets & Toys
Pocket money from parents, Spent on non essentials, May be encouraged to save
Adolescence
Wants independence, less reliant on family, start socialising away from home
Still reliant mainly on money from parents, May look for a job, Get cash as gifts & save for larger purchases
Young Adult
Middle Age
Old age