Unit 1

Unit 1

1. Important stages in the Personal Life cycle

   • Leaving School
     • More Responsibility
     • Managing your own money
     • Looking after yourself
     • Finding a job/higher education
   • Getting a Job
     • Increase in Income
     • Finding a good job
     • Using your qualifications
   • Promotion
     • Increase in income
       • You have more freedom
       • More choices
     • Paying off debts?
     • Possibly able to afford more luxuries
       • Holidays
       • Cars
       • More expensive goods
   • Unemployment
     • Loss of income
       • Help?
     • Change in lifestyle
   • Retirement
     • Pension is only income
     • Savings determine how much money you have

2. How the government affects the personal life cycle

   • Job Seekers Allowance
     • Benefits for those that are unemployed
     • Must go to interveiws and apply to jobs to be eligiable
   • Tax credits
     • For those who have insufficient wages
     • To encourage people to work insead of being unemployed
     • Also encourages parents to work instead of staying home with the children
   • State Pension
     • For those over the retirement age
     • It isn't very much and therefore often people have apension through their employer
     • To support people who are retired

3. Income Tax

   • Income tax is paid as a persentage of what you earn
   • Everyone is entitiled to some tax-free income called a tax-free allowance
   • Income tax helps the government pay for things like benefits

4. Supply and Demand

   • What is demand?
     • Demand is the quantity of all goods and wervices purchased at a given price
     • Factors affecting demand include income level, advertising and branding, competition and fashion
   • What is supply?
     • The amount of goods or services a business will offer for sale
     • Factors affect supply include cost of raw materials, wage rates and productivity of the workers
   • When a buyer and seller come together they form a market
     • Market price is the price at which the buyer and seller agree for the particular good or service
     • For most goods the price will change with demand and vice versa
       • For a product that has low demand the seller will lower the price to make it more desireable
       • For a product with high demand the seller will raise the price to increase profit
       • For inelastic products the demand doesn not change significantly with a higher price (e.g. train tickets)

5. Saving

   • Why?
     • Something special
       • Wedding
       • Holiday
     • Retirement
     • For and emergency
   • How?
     • Savings accounts and ISAs
       • Low risk
       • Easy withdrawal
       • Short to long term
     • Fixed-term investments accounts
       • There are high fees if you withdraw before the term is up
     • Share-based savings
       • Can be risky
       • Higher rewards

6. Borrowing

   • Why?
     • Make a large purchase
     • Emergency
   • How?
     • Mortgage
       • For buying a property
       • If you cannot afford your repayments that bank will take your house
     • Credit Card
       • Pay back all that you have spent at the end of the month
       • High interest fees
     • Loan
     • Overdraft - where you spend more money than you have in your account