Functions and Role of Money- Unit 3 Lesson 2

Why is it important to plan personal expenditure?

To avoid getting into debt, control spending and costs, avoid legal action or repossession, and remain solvent.

What are the benefits of protecting your financial health?

Maintains a good credit rating, avoids bankruptcy and long-term debt, has a clear plan for future purchases, and prepares for emergencies.

What do you need to achieve financial goals?

Generate income, build savings, set financial targets, fund needs, and budget for fixed and variable costs.

How can insurance contribute to financial planning?

It covers loss or illness, reduces the financial impact of unexpected events, and is part of responsible financial planning.

What is inflation and how does it affect personal finances?

Inflation is rising prices that reduce the value of money, affecting everyday purchases and savings.

What should be done to adapt to inflation?

Planning helps adjust goals and savings accordingly, and it's important to monitor trends and adapt spending habits.