Functions and Role of Money- Unit 3 Lesson 2

Why Plan Personal Expenditure?

-Avoid getting into debt

-Control personal spending and costs

-Avoid legal action and/or repossession

-Remain solvent (able to pay bills on time)

Protecting Your Financial Health

-Maintain a good credit rating

-Avoid bankruptcy and long-term debt

-Have a clear plan for funding future purchases

-Be prepared for emergencies

Achieving Financial Goals

-Generate income and build savings

-Set financial targets (e.g. buy a car, save for university)

-Fund day-to-day needs and long-term plans

-Budget for both fixed and variable costs

Providing for the Unexpected

-Insurance can cover loss or illness (e.g. life, travel, health)

-Helps reduce the financial impact of unexpected events

-Part of responsible financial planning

Countering Inflation

-Inflation =rising prices =reduced value of money -Affects everyday purchases and savings

-Planning helps adjust goals and savings accordingly

-Monitor trends and adapt spending habits