Money and Resource Management Flashcards
(39 cards)
Define “Needs”.
Needs are things that we cannot live without. They are the basic requirements such as food, clothing and shelter.
Define “Wants”.
Wants are things that we desire / wish for but may not actually need. We can still live without having them.
Give some examples of wants.
Designer clothes, holidays abroad and jewellery.
State the difference between needs and wants.
Needs are our basic requirements and we cannot survive without them. We can however still survive / live comfortably without the things that we want.
How can we find out if an item is a need or want?
By answering yes to at least one of the following questions, the item is probably a want.
- Do I already have enough of the item?
- Am I buying the item because it is branded?
- Can I find something cheaper?
- If I don’t have it, will I be able to live without it?
Why is it important to understand the relationship between our needs and wants?
Yes, in order that we can learn to find the right balance between them.
How does a person decide whether something is a need or a want?
Based on his / her current expectations.
Give an example of a need.
When my pen runs out of ink, a new pen or a pen refill is a need because I cannot do my work without it.
Give an example of a want.
If I already have three pens, another pen is now a want. I might just want more pens, but I can do without them.
Why is it important for us to make smart consumer choices?
When shopping, consumers may have to make a choice between needs and wants because they do not have enough money to buy everything.
What does making smart consumer choices require?
The use of good decision making skills.
Why are good decision making skills important?
These skills can help us manage the use of our money more effectively.
Describe the decision making process.
- State the problem
- Consider possible solutions to the problem
- Think of good and bad results (i.e. advantages and disadvantages) of each solution.
- Choose the most suitable solution.
- Evaluation your decision.
What does a consumer need to know after making a decision on what to buy?
How much he / she has and how much he / she is going to spend.
How can one become a wise consumer?
By knowing how to plan a budget.
Define “budgeting”.
Budgeting refers to the process of preparing a spending plan.
Why is budget important?
It can help us manage our money well and it can be done for different purposes.
How many types of budgets are there?
- Personal budget
2. Family budget
What is a personal budget?
It is a plan that allocates personal income to provide for expenses and savings.
What is ‘income’?
Income refers to allowance and money earned / received.
What is the purpose of having a personal budget?
To keep us from overspending.
What is a family budget?
The total income from all members of the family used to provide for the total expenses and savings of all members of the family.
What are ‘expenses’?
The money spent on things such as paying for food, books and transport.
How does one plan his budget?
By knowing the details of his income and expenses.
