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You to be able to define the following terms:
Resource
this is anything that we can use in order to meet our needs or achieve our goals. They include materials, goods, people, knowledge, money and time
Physical/Capital
These are goods made by people - they allow people to meet their day to day needs for example buildings
Natural Resource
These are resource provided by nature for example water
Financial Resource
This included all the types and source of money available. This is a very important life skill, for example savings
Human Resources
This refers to skills, abilities, experience and people available to help you for example ability to write
Time Resources
This is a valuable resource. You can't buy, make or earn more time
Needs
This is something we can't live without. It is essential for our survival. For example, food
Wants
This is something that we would like to have but it is not essential. For example, Laptop
Prioritise
Making choices between alternatives, spending on the most essential items first
Money
This is anything of value that is accepted by people in exchange for something you wanted.
Financial Cost
This is the price of the goods that we have chosen to buy. This is actually what it cost.
Opportunity Cost
This is when we decide to buy one particular product then we give up the chance (Opportunity) of buying another product.
How can I be money smart?
Money is a limited resource, so it’s crucial to use it wisely. Being financially savvy involves understanding where your money comes from and goes, living within your means, planning for future expenses, saving regularly, paying taxes, avoiding overspending and borrowing, making informed financial decisions, and preparing a personal financial life cycle. Remember, money doesn’t grow on trees!
When you have completed this chapter you will be able to:
1. Explain what resources are:
Resources is anything that we can use in order to meet our needs or achieve our goals. Resources include Material, goods, people, knowledge, money and time.
2. Identify the main resources available to you:
Households and individuals have a variety of resources available to them, such as:
Physical/capital resources
Natural resources
Financial resources
Human resources
Time resources
3. Understand and illustrate the difference between needs and wants:
A need is something we simply can't do without; essential for survival or very important part of our daily lives. For example, Shelter, food and water. Whereas a want is something that we could really like to have that may improve our quality of life, but is not essential. For example a new iPhone.
4. Match your resources to your needs and wants
This means using what you have wisely to cover essential items first, like food, shelter, and clothing, before spending on extras like entertainment or luxury items. For example, if you have a limited amount of money, you should prioritize buying groceries and paying rent before considering a new video game or a night out. This approach ensures that your basic needs are met, and any remaining resources can be used for things you want but don’t necessarily need. Our wants might be endless, but our resources available to us are not. This means we need to make choices.
5. Illustrate how your needs and wants are likely to change over time
Some needs (something we simply can't do without; essential for survival or very important part of our daily lives) are essential (food, water, shelter) at every stage of our lives. Other important needs change as we grow and develop. Our needs as children are likely to change as we grow and develop into adults.
As you grow older your need for money will increase greatly and you may have to provide for the financial needs of others as well as yourself. It will be important to manage your money in order to get the maximum value and benefit from it.
6. Understand the difference between financial cost and opportunity cost
Financial cost refers to the actual monetary expenditure, such as buying a Coke for €1. Opportunity cost is the value of the next best alternative forgone, like choosing a Coke over a candy bar when you only have €1. Limited financial resources force individuals to make choices, where the unchosen option represents the opportunity cost.
7. Appreciate the impact of your use of resources on the lives of other people:
Choices we make (as our resources are limited) and our use of resources has consequences for other people. For example, if we want cheap 'designer' clothing, this will require others to work for low wages and possibly in poor conditions in faraway countries. This is bad on the living conditions of those workers and on the environment as the additional transportation cost is not great for the earth. This awareness and action can make a big difference in the lives of people around you and future generations.