KEYTERMS TOPIC 9

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ASPIRATIONS
Things or experiences that people would like to have in the future, for example owning a home instead of renting, having a luxury holiday or buying a sports car.
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ATM
Automated teller machine, also known as a cash machine.
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BALANCE
Income minus expenses.
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BUDGET
A plan of expected incomings and outgoings over a set time period such as a month. The Budget is also the term given to the government’s spending plan, which the Chancellor (see below) sets out in the House of Commons.
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BUDGET BALANCE
Total income minus total expenditure: a person’s net financial situation.
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BUDGET DEFICIT
A situation in which outgoings exceed income.
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BUDGET SURPLUS
A sum of money available once all the essential expenditure in a given period, eg a month, has been made.
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CASH FLOW FORECAST
A plan of expected incomings and outgoings over several time periods, such as the next three months.
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CHANCELLOR OF THE EXCHEQUER
The Chancellor of the Exchequer, the British Cabinet minister responsible for financial and economic matters and in charge of the Treasury.
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CONSUMER PRICE INDEX
One of the means the government uses to measure inflation. It is calculated by checking the price of a representative sample of goods on a monthly basis – this enables statisticians to measure how much prices are rising or falling.
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CREDIT HISTORY
A record of money borrowed and repaid by an individual. These records are held by credit reference agencies and providers will check the individual’s credit history when a prospective customer applies for a borrowing product.
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CURRENT ACCOUNT
Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments.
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DISCRETIONARY EXPENDITURE
Voluntary spending on products and services that people want now, and savings towards items they aspire to buy in the future.
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DIVIDEND
A payment of profits from a company to its shareholders, often at twice-yearly intervals, either as cash or (depending on the plan) as further shares or reacquisition of shares.
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DUTY
The tax paid on certain items, including fuel, cigarettes and alcohoL.
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ESSENTIAL EXPENDITURE
Spending on items required to live, eg rent or mortgage repayments, food and drink, water supplier, gas and electricity.
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INCOME
Earnings, savings and interest payments received within a certain time period.
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INCOME TAX
Tax paid on earnings from employment, self-employment and interest on savings.
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INFLATION
A rise in prices, which means that the purchasing power of money falls.
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INSURANCE
Products that give financial protection against certain events. For example, someone who has travel insurance might be able to claim back the cost of a holiday if they have to cancel through illness.
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INVESTMENT
Money paid into financial products; the aim is that the value of the product will grow over time and so the person will eventually receive back more money than they paid in. Investments are a way of saving over the medium or long term.
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MANDATORY EXPENDITURE
Compulsory outgoings; they do not necessarily apply to everyone but if they do apply, they must be paid.
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MORTGAGE
A loan taken out to pay for a property, usually over a long term such as 25 years.
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NI CONTRIBUTIONS
Money deducted from the pay of people who are employed or selfemployed and used by the government to fund state pensions and other benefits.
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NEEDS
Things that people need to survive, such as food, basic clothing and a place to live.
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OFFICE FOR NATIONAL STATISTICS
The independent organisation that produces statistics on many aspects of life in the UK such as employment, health, how long people live for in different areas of the country, housing, etc
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PENSION
An income that people receive after retiring from work. In the UK people receive a pension from the state; some people also receive pension payments from schemes run by their former employers or arrangements that they have made for themselves.
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PREMIUM BOND
A lottery bond, issued by NS&I, entered into a monthly prize draw with tax-free prizes or ‘premiums’. Bonds must be held for a full calendar month after the month in which they were purchased, and retain an equal chance of winning until cashed in.
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REAL TERMS
A value adjusted to account for changes in prices. For example, although someone may receive a nominal pay increase of 5%, if inflation (ie rise in general prices) is 3% then in real terms the pay increase is approximately 5% – 3% = 2%.
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RETAIL PRICE INDEX
One of the ways the government measures inflation. It is calculated by checking the price of a representative sample of goods on a monthly basis but unlike CPI (see above), it also takes into account mortgage interest payments and other costs.
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SELF EMPLOYMENT
Earning an income by selling your goods or services directly to a consumer, rather than being employed by somebody else and being paid a wage or salary.
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TRANSACTION
Buying or selling something.
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UTILITY
An essential public service, such as electricity, gas, water and sewerage.
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WANTS
Things that people would like to have but can survive without, such as entertainment, fashionable clothes, etc.
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Other cards in this set

Card 2

Front

ATM

Back

Automated teller machine, also known as a cash machine.

Card 3

Front

BALANCE

Back

Preview of the front of card 3

Card 4

Front

BUDGET

Back

Preview of the front of card 4

Card 5

Front

BUDGET BALANCE

Back

Preview of the front of card 5
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