Managing Your Own Money

Transcription

1 Unit 3: Managing Your Own Money Unit code: H/503/2829 QCF Level: Level 1 Credit value: 2 Guided learning hours: 20 Unit aim The aim of this unit is to develop learners knowledge and understanding of how to balance income and expenditure, how to save money and safe borrowing. Unit introduction Managing your own money is an essential life skill. In this unit, learners will learn ways of acquiring money and how to check income against expenditure. The unit will help learners develop an understanding of how money can be saved for future needs, and approaches to borrowing money. Learners will also investigate different types of savings accounts to determine which type of account might best suit their needs. Learning outcomes and assessment criteria In order to pass this unit, the evidence that the learner presents for assessment needs to demonstrate that they can meet all the learning outcomes for the unit. The assessment criteria determine the standard required to achieve the unit. Learning outcomes 1 Be able to compare personal income with expenditure Assessment criteria 1.1 Identify different sources of income 1.2 Identify regular weekly expenditure 1.3 Use calculations to compare weekly income with expenditure 2 Know how to save money 2.1 Outline ways to make savings in weekly expenditure 2.2 Outline features of different types of savings accounts 2.3 Identify a savings account to match own needs 37

2 Learning outcomes Assessment criteria 3 Understand borrowing money 3.1 Identify reasons why borrowing money could be necessary 3.2 Explain factors to take into account before borrowing money 3.3 Outline the features of different ways to borrow money 38

3 Unit content 1 Be able to compare personal income with expenditure Sources of income: salary or wages; inheritance, gifts; pocket money; selling items; interest on savings; benefits; loans Regular expenditure: regular spending, e.g. food, toiletries, public transport, clothes, phone charges, entertainment, accommodation Compare income with expenditure: calculations based on set income and expenditures for a week 2 Know how to save money Ways to make savings: home, e.g. turn off lights, turn down heating; transport e.g. walk or cycle, saver tickets; food, e.g. make own packed lunch, buy-oneget-one free offers, buy shop own brands; clothes, e.g. buy in sales, clothes swap; phones e.g. weekend deals; entertainment, e.g. borrow DVDs from library Features of savings accounts: types, e.g. easy-access accounts, fixed rate bonds, regular savers, child trust funds, tax free accounts; features, e.g. minimum amount, ease of access, penalties for withdrawal, interest rates 3 Understand borrowing money Reasons why borrowing money could be necessary: to pay for long-lasting items; to pay for expensive items, e.g. house, motorcycle, car, washing machine Explain factors to take into account before borrowing money: repayments, e.g. amount, number, frequency; interest rate; total cost; effect of changes in personal circumstances, e.g. losing job, sickness Features of ways to borrow money: mortgages; secured loans; unsecured loans; credit cards; store cards; hire purchase; overdrafts; catalogue shopping 39

4 Essential guidance for tutors Delivery Learners should be actively involved throughout the delivery of this unit. Information may be gained from their own experiences, internet sources, newspaper or magazine articles, banks and building societies. It is recommended that learners are introduced to simple financial terminology, for example income, expenditure, investment, saving. As a way of introducing the unit to learners, small group discussions could identify different sources of income and common types of weekly expenditure. The level of calculations required should reflect the Level 1 Functional Skills mathematics standards. Learners need opportunities to demonstrate a range of basic calculation techniques. This may be approached through a role-play exercise or other suitable scenario that will entail the learner keeping a record of money received and expenditure made for a week and calculating the difference between income and expenditure. Within the above exercise, tutors or line managers could provide the learner with different situations that either cause income to exceed expenditure or expenditure to exceed income. This can then be used as a basis for highlighting the need to keep track regularly of expenditure to ensure income covers expenditure. Tutors or line managers could support learners by making them aware of the different methods of saving money. This may include for example walking instead of catching a bus, not buying the most expensive range in a product, giving up smoking, sharing transport to work or finding free entertainment. Learners could be encouraged to identify the many different types of savings accounts available. This could be achieved from internet searches or leaflets from banks and building societies. In the process, learners can select the type of account that best meets their needs. Tutors or line managers could help learners by making them aware of the different reasons why borrowing money could be necessary. For example, purchasing items that are long lasting, and items that may increase in value. The need to plan borrowing to ensure debts do not become unmanageable could be explored through case studies. Learners could identify the best way to borrow money at different times through internet searches. Assessment A range of small tasks may be given to the learner to complete throughout the teaching of this unit or larger tasks may be provided towards the end of delivery of the unit. For 1.1, the learner must identify three different sources of income. The learner should name the source of income. They may be given different scenarios which highlight different possible sources of income and asked to describe the appropriate sources, for example a single parent with a three-year-old child who works parttime; the other parent of the child works full-time and regularly visits the child, or the scenario of a full-time student who receives financial support from their parents. 40

5 For 1.2, the learner must be able to identify regular weekly expenditure for an individual or a family. The learner may choose to identify their own weekly expenditure. However, confidentiality must be respected throughout. Alternatively, the learner may be given a scenario of an individual or a family and asked to identify the likely weekly expenditure. The learner does not need to identify every likely aspect of the weekly expenditure but should be able to describe the most likely or common items. For 1.3, the learner should use basic calculations to compare income with expenditure based on details given for a set weekly income and expenditure. The learner s calculations should show whether income for the week exceeds, equals or falls short of expenditure. For 2.1, the learner needs to identify ways that and individual can save money over the period of a week in the home, and on travel, food and clothing. The evidence may be in response to a case study. For 2.2, the learner should outline the features of two different types of savings account. The description should include the name of the savings account, who it is suitable for, any conditions attached to the savings account, rate of interest and additional benefits. For 2.3, the learner should identify one savings account that meets their own needs. The learner may receive some support in discussing and gathering information about savings accounts that might be suitable, but should be able to make a choice independently. For 3.1, the learner needs to give two reasons why borrowing money might be necessary. For 3.2, the learner should explain three factors that need to be taken into account before borrowing money. For 3.3, the learner needs to give brief detail of the characteristics of two different ways to borrow money. Links to other BTEC units, other BTEC qualifications and other relevant units and qualifications This unit forms part of the WorkSkills suite. It has particular links with: Entry Level Level 1 Level 2 Unit 3: Managing Your Own Money Unit 4: Being Responsible for Other People s Money Unit 4: Being Responsible for Other People s Money Unit 3: Managing Your Own Money Essential resources Learners need access to information relating to savings accounts. Suggested resources Websites

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