Planning Personal Finance Flashcards
1
Q
Debt
A
Money owed
2
Q
Credit Rating
A
A score given to individuals on how likely they are to repay debts based upon their previous actions
3
Q
Bankruptcy
A
When an individual or organisation legally states its inability to repay debts
+ Quickest way to get debt free
+ Advice if free from citizens advice
- Could lose assets such as house
- Bank account frozen for a period of time
- Recorded publicly on the insolvency register
4
Q
Solvent
A
The ability to meet day-to-day expenditure and repay debts
5
Q
Avoiding Debt
A
- Calculate repayments and interest before signing a loan agreement
- Avoiding being overdrawn
- Set financial targets and goals
- Careful use of credit cards
6
Q
Benefits Of Planning
A
+ Having a good credit rating means you can borrow money when needed
+ Money not spent on essentials can be saved and interest can be earned on it
+ Saving can fund purchases or pay for unexpected expenses
7
Q
Risks Of Not Saving
A
- Getting into debt because you cannot pay bills
- Having insufficient funds to pay loan repayments
- Having legal action taken against you for non-payment
- A poor credit rating affects your ability to borrow
