Financial Literacy Unit 1/4

Budget

An estimate of future revenue and spending that is often generated and analysed on a periodic basis.

Budget Surplus

When income surpasses expenses, indicating well-managed finances.

Budget Deficit

When expenses exceed income, potentially requiring borrowing.

Personal Budget

A document that keeps track of the money coming in from various sources, as well as the money going out to cover expenses for an individual.

Family Budget

The amount of money needed by a family to maintain a modest and satisfactory level of living.

Business Budget

A budget that represents expenses and income for a business. It also describes financial and operational goals.

Master Budget

Is a compendium of lower-level budgets created by functional departments of an organisation.

Operating Budget

Represents a company's anticipated revenue and expenses over a specific time period.

Cash Budget

Predicts the amount of money that enters and exits a business over a specific time period.

Financial Budget

Businesses establish this budget to determine how much cash they will require and when they will require it to accomplish short- and long-term objectives.

Labor Budget

Helps determine the workforce needed to fulfill goals, letting you budget for all of those employees.

Fixed Budget

A budget that remains constant over time, regardless of changes during the budgeting period.

Variable Budget

Quantities in a budget that fluctuate depending on sales, output, and other external economic factors.

Estimated Revenue

The amount of money expected to be made through the sale of goods and services.

Fixed Cost

A cost that does not fluctuate in the short term, independent of a company's sales volume or other activity levels.

Variable Costs

Expenses that vary according to the amount of goods or services produced by a company.

Capital Expenditure

Monies used by a corporation to purchase, improve, or maintain long-term assets.

Cash Flow

The money that enters and exits the company.

Profit

The final budget component derived by deducting anticipated costs from revenue.

Financial Planning

A long-term strategy for your financial future that considers every facet of your financial condition and how each effects your ability to achieve your goals and objectives.

Natural Resources

Raw materials provided by nature, such as oil, minerals, and nutrients.

Human Resources

Individuals who engage in manufacturing activities through intelligence or physical effort.

Capital Resources

Assets and money used to create goods and services, including buildings, equipment, and supplies.

Economic Reasoning

The process of considering costs and benefits, goals and needs, rewards and penalties before making a decision.

Financial Planning

A systematic approach to accomplishing one's life goals by managing income, expenses, and investments.

Asset Management

Managing investments on behalf of a customer, including selecting stocks, bonds, and mutual funds.

Personal Financial Planning

A methodical approach to maximizing one's existing financial resources through smart financial planning.

Retirement Planning

Ensuring a continuous flow of income after retirement through savings and investments.

Wants

Desires that are backed by money and willingness to purchase.

Human Wants

Goals that people strive towards in order to be satisfied; natural desires that must be satisfied.

Economic Wants

Desires that necessitate human involvement in economic activities and earning money to satisfy them.

Necessities

Basic human requirements for living and surviving, such as food, clothing, and shelter.

Comforts

Goods that make life more enjoyable and pleasant.

Luxuries

Items that provide pleasure and social status but are not required for survival or comfort.

Self-production

Meeting needs and wants entirely through one's own efforts without assistance from others.

Barter system

Exchanging surplus output for goods produced by others.

Commercial trade

Purchasing and consuming goods and services using money.

Coercion

Using force to meet needs.

Financial Institutions

Financial entities that provide a range of products and services such as banking, insurance, and investment management.

Bank

A financial entity authorized to accept deposits and provide loans, also offering services like wealth management and currency exchange.

Retail Banks

Banks that serve individual customers, offering services like savings accounts and personal loans.

Commercial Banks

Banks that provide financial products and services to businesses and corporations, including trade financing and securities.

Wholesale Banks

Banks that offer services involving trading financial products between financial institutions, government agencies and other large organizations.

Wealth Management

Financial service focused on managing the investment needs of high-net-worth individuals.

Agency Services

A bank acting as an intermediary between customers and other organizations, facilitating payments and collections.

Utility Services

Services offered by banks that provide convenience and security, like safe deposit lockers and letters of credit.

Online Banking

Banking services delivered through digital platforms, offering account access and transaction capabilities remotely.

Mobile Banking

Banking services conducted via mobile devices, enabling balance checks, transactions, and payments.

Priority Banking

Specialized banking services for high-value customers based on average balances and relationship tenure.

Savings Account

An account for saving small amounts with interest, facilitating secure storage and earning potential.

Current Account

An account used for frequent transactions, typically not earning interest and used by businesses.

Fixed Deposit

A deposit held for a fixed term with a fixed interest rate, providing higher returns for longer durations.

Recurring Deposit

A deposit where regular payments are made over a set period, accumulating principal and interest.

Non-Banking Financial Institutions (NBFCs)

Companies that provide banking and financial services, but do not hold a banking license.

General Insurance

Protects against risks other than life. It could protect your health, vehicle, home, property, and other belongings against accidents and disasters

Life insurance

Financial instrument which gives monetary benefits in the event of the insured person's death.

Digital Lending

The process of managing credit instruments such as loans and credit cards using digital channels from beginning to end.

Digital Wallet

Allow one party to transfer digital currency units for products and services from another party.

Agency Services

The bank acts as a go-between for its customers and government and business organisations

Financial Health

The state of a person's financial situation. Excellent financial health is crucial for overall well-being.

Financial Literacy

The intellectual grasp of financial ideas and abilities such as budgeting, investing, borrowing, taxation, and personal financial planning.

Budget

A summary of your earnings and expenses for a specific time period, usually one month.

Savings

Setting aside a percentage of one's income for future usage, allowing for financial safety and security.

Investing

Accumulating and expanding wealth to live a secure and happy life.

Tax Planning

A legal technique of lowering tax payments in any given fiscal year, utilizing government tax exemptions, deductions, and benefits.

Credit Score

Assesses a person's capacity to repay a debt, representing their creditworthiness numerically.

Income

The money that a household receives in the form of earnings from various sources.

Expenditure

The money spent from wages to obtain various products to suit our needs.

Debt Management

Borrowed money, understanding its principles, distinguishing between good and bad debt, and managing it effectively.

Financial Education

Knowing the facts about money and taking the necessary steps to obtain desired financial outcomes.

Numerical Ability

Having the confidence and skill to add, subtract, multiply, divide, and use decimals, fractions, and percentages.

Financial Tools

Programmes that calculate, evaluate, and analyse financial variables such as return and risk.

Financial Etiquette

A set of anticipated or obligatory behaviours in order to become financially literate.

Communication Ability

Being able to communicate financial information through effective speaking, writing, and presentation skills.