Introduction to personal finance:

1. What is money?

Money is something that people use to buy things they want or need. It can be coins,
paper bills, or even numbers stored electronically in a bank account. Money helps us
trade goods and services with others. It's like a tool we use to get what we want from
other people who have things we need

2. There are five characteristics of money. Select and describe any two of these
characteristics in terms of how they help to define what money is:

Portability: Money is easy to carry around. It's like having coins and bills in your pocket
or wallet that you can take with you wherever you go, whether you're buying groceries or
going out with friends.

Divisibility: Money can be divided into smaller parts. This is important because it allows
you to make purchases of different amounts. For example, if you want to buy a snack,
you might only need a few dollars, but if you're buying a new phone, you'll need more.
Divisibility means you can use the right amount of money for what you want to buy,
whether it's a small item or something bigger.

3. Explain the difference between short, medium and long-term goals for saving. Use
examples in your answer:

Short-Term Goals: These are things you want to achieve soon, like within a few months
to a year. Examples include saving for a new phone, a weekend trip, or covering an
unexpected expense like car repairs.

Medium-Term Goals: These goals are a bit further away, usually within one to five years.
Examples include saving for a down payment on a car, a special vacation, or starting a
small business.

Long-Term Goals: These are big-picture goals that you want to achieve in more than five
years. Examples include saving for a house, funding your education, or preparing for
retirement.

4. Justify why it is important to set goals for savings as a young person:

Setting savings goals as a young person is really important because it helps you learn
how to manage money wisely. When you have goals to save for things like a new phone,
a car, or even emergencies, you're building good habits for the future. It teaches you to
spend money carefully and save for things you really want. Plus, having savings gives you
a safety net in case something unexpected happens. By setting goals early on, you're
also giving yourself a head start on building wealth and achieving financial independence
later in life.
Budgeting:

5. Describe what a budget is. In your answer, include some of the key things that a
good budget should include:

A budget is like a plan for your money. It helps you see how much money you have
coming in (your income) and how much you're spending (your expenses). A good budget
should include all the money you expect to earn and all the things you need to spend
money on, like bills, groceries, and savings. It's important to make sure your expenses
don't exceed your income, so you can avoid running out of money or going into debt. A
budget also helps you save money for things you want in the future, like a new phone or a
vacation. Overall, having a budget helps you manage your money better and reach your
financial goals.

6. What makes a budget a useful tool for helping with saving and goal-setting?

A budget is like a roadmap for your money. It helps you save and set goals by showing
you how much money you have coming in and where it's going out. With a budget, you
can decide how much you want to save each month for things like buying a new phone,
going on a trip, or saving for college. It helps you stay organized, make smart choices
with your money, and track your progress toward your goals. So, having a budget is like
having a plan that keeps you on track to reach the things you want in the future.

7. Why is Microsoft Excel/Google Sheets a good platform for creating budgets?

Microsoft Excel and Google Sheets are great for making budgets because they're easy to
use and let you customize your budget exactly how you want. You can organize your
income and expenses neatly, add up numbers automatically, and see your spending in
colorful charts. Plus, you can access your budget from anywhere with an internet
connection, making it super convenient to keep track of your money. So whether you're
saving for a new phone or planning for college, Excel and Google Sheets help you stay
on top of your finances.

8. What is one thing that you learned about your own personal spending/saving from
completing the personal budget activity?

One thing I learned from creating a personal budget is how small expenses can add up
quickly. This helped me realize where the money I spent is going and where I can cut
back to save more effectively.

Credit:

9. Explain the difference between ‘credit’ and ‘debit’

Debit: Spending money you already have in your bank account, like using cash.

Credit: Borrowing money that you'll need to pay back later, usually with interest, like
using a credit card.
 10. Define or outline the term ‘interest’ with relation to credit cards:

Interest on credit cards is like a fee you pay for borrowing money. If you don't pay off your
full credit card balance each month, the credit card company charges you extra money
called "interest." It's calculated as a percentage of the amount you owe and adds up over
time, making it important to pay off your balance quickly to avoid paying more in interest.

11. Credit cards can be useful tools. Explain how, using at least one example:

Credit cards can be useful because they provide convenience and security when making
purchases. For example, when traveling, using a credit card to book a hotel room online is
quick and easy. It eliminates the need to carry large amounts of cash and offers
protection against fraud. If the card is lost or stolen, it can be canceled, and many credit
cards also provide insurance for purchases, offering peace of mind during travel.

12. List and describe at least TWO things that a user needs to be mindful of when using
a credit card for purchases:

Interest Charges: Remember that any unpaid balances on your credit card will accrue
interest over time. Try to pay off your full balance each month to avoid paying extra in
interest.

Credit Usage: Be mindful of how much of your available credit you're using. Keeping
your credit card balances low relative to your credit limit can help maintain a healthy
credit score.

13. What is meant by the term ‘credit history’ and why is this important?

Credit history is a record of how you've borrowed and repaid money. It's important
because lenders use it to decide whether to approve your applications for loans or credit
cards. Having a good credit history can help you qualify for better terms and lower
interest rates on loans, while a poor credit history can make it harder to borrow money or
may result in higher interest rates.

14. How do ‘buy now, pay later’ programs work?

"Buy now, pay later" programs allow you to make a purchase and pay for it in
installments over time, rather than paying the full amount upfront. You select BNPL as a
payment option at checkout, split the total cost into several payments, and make
payments over a set period, typically without interest. It's important to review the terms to
understand any potential fees or penalties.

15. What benefits do ‘buy now, pay later’ programs have for the consumer?

"Buy now, pay later" programs offer consumers the benefit of being able to make
purchases and pay for them in installments over time. This allows for immediate access
to goods, flexibility in payments, and often, no interest charges. It's a convenient and
budget-friendly option for managing expenses.

16. List and describe at least one thing that consumers should be mindful of when using
a ‘buy now, pay later’ program:

"Buy now, pay later" programs offer consumers the benefit of being able to make
purchases and pay for them in instalments over time. This allows for immediate access to
goods, flexibility in payments, and often, no interest charges. It's a convenient and
budget-friendly option for managing expenses.

17. What features of a credit card should a potential consumer look at when comparing
credit cards offered by banks?

when comparing credit cards, it's essential to look at factors such as interest rates, fees,
rewards, and eligibility requirements. Understanding these features helps students make
informed financial decisions. For example, they should consider the interest rates to
understand how much they'll pay if they carry a balance. They should also look for cards
with low or no annual fees to avoid unnecessary charges. Additionally, students can
benefit from rewards programs that offer cashback or points for their spending. Lastly,
they should ensure they meet the eligibility requirements, such as minimum income or
credit score, before applying for a credit card

18. Explain why it is important to repay any credit card expenses as soon as possible:

It's important to repay any credit card expenses as soon as possible because it helps you
avoid paying high interest charges, prevents debt from accumulating, improves your
credit score, promotes good financial habits, and reduces stress.