Insurance Stock photos by Vecteezy
When you go on holiday, how do you know you are protected against any unforeseen circumstances? Similarly, what about if your home gets broken into, and your valuable possessions stolen? That’s where insurance comes in, and we will breakdown the numerous types of insurance you can have below…
To learn more and test your knowledge with a quiz, visit this site on Khan Academy.
| Key Terms:
Insurance – Contract which gives you protection against specific events/perils, for example having your house insured. Premium – Amount you pay on your car insurance policy, basically protecting you from any accidents. |
Banks are the central ‘hub’ of all things money. They provide loans, store money, offer savings accounts, amongst other services. However, it is important to know that there are other financial institutions that operate as well as banks. For example, Building Societies and National Institutions exist alongside the Bank of England, which we will explore below…
The majority of countries have a Central Bank. The Central Bank takes on key processes that the government passes on, for example managing interest rates and implementing economic policies.
The UK’s central bank is the Bank of England, and there is a whole load of info on what they do here.
Building Societies are a different type of financial institution when compared with banks. They are owned by their members, typically focusing on savings and mortgage lending. Building societies do not have shareholders, so any profits are put back into the business.
Financial Inclusion is defined as an individual’s ability to access financial products and services. World Bank states that 71% of people have access to a bank account. Hence, nearly 1/3 of the world have no access, so you should make the most of your opportunity!
The goal of improving financial inclusion involves better education, awareness and product distribution. In particular, this ensures more and more people, especially those in developing countries, can have access to bank accounts. Hence, they can start their saving journey and have more control over their money.
| Key Terms:
Central Bank – Main bank in a country, sets interest rates, monitors other banks, amongst many other functions. Shareholders – People who are financially invested in a company. Profits – The revenue a company makes, subtract its costs. Developing countries – A typically ‘poor’ country that is aiming to become more advanced. |
Credit Card Stock photos by Vecteezy
Credit is definitely an important term to get your head around, as most (if not all!) of you will own a credit card at some point during your life…
A credit card is issued to you from a bank, allowing you to borrow funds to pay for your expenses . You must pay this “borrowed” money back by the billing date, or you get charged interest on what you owe. This interest, known as the Annual Percentage Rate (APR).
Making purchases with these cards gives you extra protection on what you buy, as both the store you bought from, along with the card company, are jointly liable, so you have a bit more protection in case anything goes wrong!
Often, these bank cards offer various bonuses, such as air miles, helping you secure some cheap (or free) flights!
A credit score is a number between 300-850, which suggests how “credit worthy” you are. It is calculated from numerous factors. These include previous repayment history, the length of your credit history and total amount of debt, amongst a host of other factors. This may seem like unfamiliar territory, but not to worry, as there are many ways to check whether you are eligible for a card. It is important to note that companies do not issue cards to anyone under the age of 18, so no need to panic just yet! If you want some information on how to keep a good credit score, visit the Practical money skills website here!
TYPES OF CREDIT CARDS:
There are many different types of credit cards to consider when applying, so here is a brief insight to a few of them: Cash Back Cards – Despite high annual fees, cash back cards offer you a % of your purchases back, saving you some money. Travel Cards – These offer air miles/points as you buy, lowering the cost of flights! Student Cards – Helps students to build credit. These cards are low risk, with low interest rates and no annual fees!
| Key Terms:
Annual Percentage Rate (APR) – The yearly interest generated by a sum, that is charged to borrowers. Billing date – Occurs monthly, the date in which you need to pay back the money you have spent on your bank card. Credit – A contractual agreement between lender and borrower. |
Inflation Stock photos by Vecteezy
Inflation is an indicator of how prices rise over time, commonly defined as the change in cost of a fixed basket of goods.
For example, if a basket of goods consisting of a phone, headphones, computer and a notebook cost £2000 in 2020, and then in 2021, the exact same goods cost £2200, the inflationary rates for the year would be 10%.
The level of inflation in an economy will differ from year to year, and this is due to numerous factors. Some of these include rising prices of raw materials, rising wages, and a reduction in supply.
For example, due to disease killing millions of hens in the US in 2022, the price of eggs soared by 59.9% in just one year. This is an example of reduced supply impacting inflation.
Rising price levels have many impacts on young people, some of these include:
If you want to test your knowledge, check out the Inflation page on the Khan Academy website.
| Key Terms:
Inflation – Measure of how price levels change over time. Raw Materials – The substances used in the first stage of production, e.g. coal |
Business Stock photos by Vecteezy
Here are some of the best sites and most trustworthy sources that we recommend for you to expand your interests and answer any further questions you have about the world of money!
MoneySavingExpert – This site by Martin Lewis offers a whole host of information ranging from Banking and Savings to managing household bills!
Practical Money Skills – Set up by Visa, this page offers friendly content covering almost all aspects of finance – check it out!
Young Enterprise – The Young Enterprise charity aims to equip young people with tools for the future, including Financial Education, as well as Enterprise Education.
Khan Academy – As referenced throughout our Money Matters posts, Khan Academy offer 16 Units worth of teaching on financial literacy, to develop your knowledge across all areas of finance!
Kids Money – The Kids money site offers guidance on savings, spending, sharing and earning no matter your age, so it is worth visiting!
Lloyds Bank Academy – Prefer learning new content through games and videos? Then this is the page for you!
There are a host of podcasts that exist, including the Planet Money Podcast, Teen Money Matters and Teen Financial Freedom. They all offer loads of useful information – so check them out!
As mentioned prior, there are some reputable sources across social media who you may want to check out! These include: @MrMoneyJar, @Bola_Sol, @PenniestoPounds, @herfirst100k, @personalfinanceclub, @thriftylondoner and @thisgirltalksmoney.
Background Stock photos by Vecteezy
Have you heard of the terms Bitcoin, Stocks and Shares, and diversification? If not, don’t worry! Investing is a complex and sometimes scary term, but we’re here to break it down. We’ll provide all the information you need to start understanding the various types of investments out there, and how you can use investments to make some money!
Investing is making money, from money. The idea lies in buying something of value (e.g. a stock), hoping its price rises, and then selling it for a profit! Simple, right?
Investing has many negative connotations due to the bad reports that make their way onto the news, like stock market crashes and financial crises. Whereas, the good news often stays in the shadows. After some research, you’ll understand that investing does have its highs and lows, and being aware of the risks is a key factor to understanding investing.
Investing comes with an element of risk, as you cannot be sure whether the value of investments will rise or fall. It’s important to note that different investments have varying levels of risk. For example, Government Bonds provide a low-risk investment option, whereas Cryptocurrencies pose a much higher risk.
Risk can be eliminated through diversification, which involves spreading your money across multiple investments, as it is less likely that they will all fail. Imagine you’re the owner of an Ice Cream Van and an Umbrella stand. On a beautiful, sunny day, the Ice Cream van will have lots of business, but the Umbrella stand will be quiet. However, on a rainy day, it will be the opposite. Hence, you will have a steady income flow during both rain and shine! This is how diversification works.
Check out more information on investing here.
It’s important to note that this information is not financial advice and is for informational purposes only.
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Key Terms Investing – Action of buying something of value, hoping its price rises. Cryptocurrency – A digital currency often used for investing and trading. Government Bonds – A low-risk investment tool. Diversification – Reducing risk by spreading out your investments. Stock Market – Tracks the performance of stocks. |
Accounting Stock photos by Vecteezy
Here, we will continue to delve into the world of investing, ensuring you know the best place to put your money! We will explain the role of ISAs, some general advice to keep safe, and a few alternative options for investments…
An ISA is a savings account where you can put your money and receive interest tax free! There are multiple different types of ISA accounts, including a lifetime ISA and a stocks and shares ISA. These are tax free, hence you will not have to pay capital gains tax – consequently meaning more money for you to keep! You can deposit up to £9,000 per year in a Junior ISA, so plenty of room to deposit some of your hard-earned money!
Follow these tips and tricks to guarantee safety whilst investing!
In addition to ISAs, there are a whole host of other options when looking where to invest your money, and some examples of these include…
Now you should have all the information you need to be able to make safe, informed investment decisions. In need of any more information? Check out the Money Saving Expert page for some key ISA information!
It’s important to note that this information is not financial advice, and is for informational purposes only.
| Key Terms:
Capital Gains Tax – Tax you pay on the profits from selling an asset. Regulated – Investment platforms that are controlled and prevent any fraudulent activities. Bonds – Type of issued debt that is seen as a secure investment. Mutual Funds – Also a safe investment, a combination of both stocks and bonds. |
In a world where digital media is growing day by day, unfortunately this often results in a growing number of online scams. It is more important than ever to be informed about the numerous scams that present themselves, and below we will outline how you can keep yourself protected!
One branch of online scams involves credit. Worryingly, these scammers do not need your physical credit card, instead just needing your card details, so be very careful who you give this information out to. A common example is scammers sending texts, impersonating a family member who is urgently asking for money, so be wary!
Smishing, Vishing and Phishing are further examples of ways you could get scammed though texts, calls and emails, and there is plenty of information on these scams here, as well as in our other page – How to Avoid Fraud – Continued.
Awareness and understanding of all the potential scams out there are key components in keeping yourself safe.
Further preventative measures include: Safe use of the internet, destroying private records, securing your mail, and general awareness of scams.
Think you’re now aware of the various scams out there? Take the ‘Scam Savvy’ test to see how well prepared you are!
| Key Terms:
Smishing – Type of fraud over texts, usually asking for banking information. Vishing – Type of scam made over the phone, using fake numbers to get personal information. Phishing- Scamming through emails, through web links asking for your information. |
Protect Stock photos by Vecteezy
This page will further highlight the vast number of scams and types of fraud out there. We will touch on vishing, phishing and smishing in more detail, as well as covering money mules, identity theft and job scams, and how to recover and protect yourself!
Identity theft occurs when people attempt to steal your identity, whether it’s on your card, bills or driving license. This information is obtained through phone calls, data breaches or even stealing your post! Fortunately, you can protect yourself in various ways. Shredding documents after use, using strong and different passwords across websites, and being careful where you are putting your information online are some ways you can do so.
If you are a victim of identity theft don’t panic, just follow these steps:
Money mule schemes involve scammers asking to transfer money into your account, before transferring it into a different one to ‘clean’ it (this is a form of money laundering). This often appeals to students who are low on cash as a way to make some easy money. Don’t get tempted by the lure of the easy money, as doing so will prevent your ability to have a bank account and credit card in the future!
Job scams work similarly to money mules as they offer some quick and easy cash – but don’t be fooled! These scams ask for an upfront fee, often disguised as an ‘administrative fee’. In return, they offer a good salary with low hours, often advertising working from home.
Vishing, phishing and smishing all work by contacting you over the phone, each one through a different channel. Phishing (through email) involves the scammer asking you to click a web link – so be careful not to click any dodgy looking links!
Smishing involves texts, often asking for banking details, which you should never give out! Vishing, (via phone calls), involves number spoofing, pretending to be an authority that requires your personal details. Do not give out any personal information if you are not sure who it is or what they’re asking for!
| Key Terms:
Money Mules – Scammers transferring money into your account, as a form of money laundering. Identity Theft – Scammers trying to steal your identity. Job Scams – False job advertising. |
Saving Stock photos by Vecteezy
As Warren Buffet rightly stated, saving should be a priority whenever you earn some money! Whether it’s some pocket money from Mum and Dad, or a weekly wage from your first job, the best time to start saving is NOW! Although it may seem confusing due to the variety of places where you can save your money, below we will begin to breakdown that process to ensure you are putting your money in the best place for you!
There are so many options when it comes to saving money, so it is often tricky to know where to start! Basic bank savings accounts are an easy place to start. These accounts accept (almost!) anyone, so both young people and people with poor credit scores can access an account. However, these accounts do not offer loans, and often have low interest rates. Online savings accounts are similar to basic accounts, however due to solely operating online, they tend to offer slightly higher interest rates than the “old-school” banks. Monzo and Revolut are great examples of online banks. If you want an alternative to these more traditional methods, bloommoney provides some other options to get yourself into the world of saving!
Reduce Risk – Saving money ensures that you will always have some spare money in the case of an unexpected expense, and this should (hopefully) reduce stress!
Build Wealth – Saving when you are young, and picking the right places to save your money allows for your wealth to build over time, as you benefit from interest.
Preventing the build-up of debt – Your savings can help you to pay off any outstanding debts, so that you can control your debts, rather than letting your debts control you!
It’s easy to get saving, so there is no excuse to not make a start today! For those of you who receive income from a part-time job (or from pocket money), set some money aside each month into a savings account (you will need to ask for permission from your parents to get an account set up!). Set yourself a monthly saving goal and try your very best to stick to it!
Have a read of the information on Tesco bank ‘s page which provides some extra information to help you hit your saving goals!
| Key Terms:
Interest Rates – The rate of return paid to you when you place money in the bank. Credit Scores – Number between 300-850 that shows lenders how responsible you are with your money. Unexpected expenses – A cost that you were not prepared for, but you can cover with your savings! |
