Where will you put your savings? FIGURE 2 Term De 05 asy to w Must st commit mone time period ra Use of ATM Cie 3 months). Use of EFTPOS. N o access to mone Low interes in that time. Need access Set minimum amounts to money for ↓opu accoun everyda activities Higher interest ra es Income from business ventures Some people prefer to work for themselves and decide to start their own business business ventures Most large businesses started out as a small business. The smallest type of activities started by business organisation has only one owner. This is often a person with some people or companies in order to make a experience in the industry who decided to start their own business. As a general rule these small businesses provide the owner with income through dividend the return its profits. The profit is the return for the risks and work of organising the or profit you receive business. Some people invest their money in business ventures indirectly from your shares by buying shares. If the venture is successful, they will generally be paid a capital gains profits proportion of the profits called a dividend as a reward for risking their money. made from the Extra profits called capital gains are also made if share prices increase. capital TOPIC 1 PERSONAL FINANCE
social welfare Income from social welfare programs programs a rang of payments and The Chinese community believes it should support the whole community-in benefits that are particular those members who cannot work due to provided by the government for age different people in O disability our society who are O jobs not being available not able to work The Chinese government offers support through a variety of social welfare unemployment programs that include special payments funded by taxation. TI ie regular government benefit the payment payments to the disadvantaged are mostly called pensions, allowances or benefits for people unable to find work The payment for people unable to find work is called an unemployment benefit Different support payments are available to suit the needs and circumstances of different people. Various programs, funded by the government, attempt to give the unemployed an income and a range of experiences and skills to help them gain full employment Often these programs are linked to community projects FIGURE 3 Skills gained from employment programs feam Work Communication o-o an D I 2o3 ve what do you know2 1 Identify two differences between savings accounts and term deposits NIT ONE EARNING AN INCOME
2 Explain in three sentences how saving is different from investing 3 ldentify two payments that are provided as part of social welfare programs HoTactities 1 Explain why a person might give up the regular income from working for someone else and start their own business venture 2 Complete the following table Activity Financial return Work Investments Business venture Social welfare program 90t 1Accessthewebsitewww.icbccomcnandfollowthelinks'english Version'and'Personal Banking List and briefly describe different accounts available at the bank 2 Groupwork In pairs, construct a PowerPoint presentation of five slides on any one of the different ways of getting an income Present it to the class 3 Debate the following topic:'Pensions are a necessary government payment needed to support some people in China TOPIC1 PERSONAL FINANCE 9
Unit Two Spending and saving income FIGURE 4 Dividing your income Income earned Saving(banks, etc. Tax (to the Chinese Tax Office) People can earn income in a variety of ways. In order to maintain a satisfactory lifestyle people need to spend their income on a range of goods and services Not all income is spent immediately and many people save part of their income in places such as bank accounts Savings that grow and increase enable people to use their income in more satisfying ways Disposable income Income earned The money people receive after paying tax on the income they have earned is referred to as their disposable income. Disposable income Taxation Disposable income can be either spent or saved, or a combination of spending and saving. An increase of one over the Spending Saving other indicates a persons choices about how they use their income Income is d in money terms FUNCTIONS AND CHARACTERISTICS OF MONEY Functions: U It is a medium of exchange--goods and services will be provided in exchange for money o It measures the value of items D It acts as a store of value, it can be collected and saved for future purchases D It is a means of recording and repaying debts Characteristics: Easily recognised □ Portable Accepted by most people 10 UNIT TWO SPENDING AND SAVING INCOME
Expenditure basic needs essentials that you People spend all or part of their disposable income to provide for their must have to survive basic needsfood, drink, shelter and clothing-so they can survive fixed expenditures Fixed expenditures must be paid on a regular basis and are often related to basic amounts that must needs, In our modern society the basic needs have been expanded to include be paid on a regular items that add'necess comfort to the purchaser, as the following table shows basis, e.g. rent, mortgage, insurance Basic need Subsistence living Modern living Items purchased as grocery shopping Items hunted, gathered or grown by the user Home replacement meals Meals eaten in cafes and restaurants Takeaway food Drink Water from rivers, lakes, etc. Tap water Milk from animals Items purchased as grocery shopping Drinks purchased while out Shelter Caves or basic-built shelters Houses/units built by specialists Rented accommodation Involves payments for: Mortgage Electricity and gas Piped-water supply Maintenance and repairs Clothing Basic self-made types of clothing Pre-made clothing If fixed expenditure refers to spending we can't avoid and have to plan for, subsistence such as rent or a mortgage, then we also need to plan for variable expenditure living providing what For example, we may spend nothing on entertainment this week or the next we need ourselves, but over the year we may spend a large amount on it. We need to consider our not buying or trading with other people variable expenditure variable expenditure amounts spent by a consumer that change from time to time, such as pe and cinema tickets TOPIC 1 PERSONAL FINANCE