Question 1: Define the term 'budget'. Why is it important to create a budget before making a big purchase?

Answer: A 'budget' is a plan that outlines expected income and expenses over a period. It helps manage money effectively, avoid overspending, and ensure funds are available for essential purchases.

Question 2: List three different sources of income that a young person might have.

Answer: Part-time job wages, allowances, gifts from family, earnings from selling items online.

Question 3: Explain what is meant by 'saving' money and give two reasons why it is important.

Answer: Saving money means setting aside a portion of income for future use. It is important for emergencies and for achieving future goals like buying something special.

Question 4: Describe the concept of 'needs' and 'wants'. Provide two examples of each.

Answer: 'Needs' are essential items required for basic living, such as food and clothing. 'Wants' are non-essential items that improve quality of life, like new gadgets or designer clothes.

Question 5: Imagine you receive £50 as birthday money. List three ways you could allocate this money responsibly.

Answer: Save a portion in a savings account, spend some on a desired item, and set aside some for future needs or emergencies.

Question 6: Draw a simple pie chart showing how you would distribute £100 if you decided to spend 50% on essentials, 30% on savings, and 20% on leisure activities. Label each section clearly.

Answer: A pie chart divided into three segments: half labeled 'Essentials', nearly a third labeled 'Savings', and a smaller segment labeled 'Leisure'.

Question 7: What is a bank account, and what are two advantages of having one?

Answer: A bank account is an account held at a bank where you can store money safely. Advantages include easy access to funds and the ability to earn interest.

Question 8: Sketch a simple flowchart showing the steps you might take when planning your weekly spending. Include at least three steps.

Answer: The flowchart should include steps such as: 1) List weekly income, 2) Identify necessary expenses, 3) Allocate money for each expense, and 4) Review remaining funds for optional spending.

Question 9: Identify two ways to avoid impulse buying when shopping online or in stores.

Answer: Create a shopping list before buying, and set a time delay before making a purchase to consider if it is necessary.

Question 10: Explain the term 'interest' in relation to savings accounts. Why might earning interest be beneficial?

Answer: 'Interest' is the money earned on savings over time, typically as a percentage of the amount saved. Earning interest helps your savings grow without additional effort.