Savings and Credit

Saving and Credit

When you don't have enough money to buy something, you have two options:

1. Saving: Putting money aside until you can afford it.
2. Buying on credit: Borrowing money and paying it back later.

Saving

Advantages:

✔ You earn interest* (extra money).

✔ The item costs less overall.

✔ No risk of getting into debt.

Disadvantages:

✘ You have to wait for the item.

Where to Save:

• Credit union
• Bank or building society
• Post office 📌 *Interest is the cost of borrowing money or the reward for saving it. When you borrow money from a lender, you will be charged interest as a fee for using their money. On the other hand, when you save money in a bank or other financial institution, they pay you interest as a reward for keeping your money with them.

Credit – Buy Now, Pay Later

Advantages:

✔ You use the item while paying for it.

✔ Helps with large purchases like houses or cars.

Disadvantages:

✘ Encourages overspending.

✘ Interest makes items more expensive.

✘ Risk of getting into debt.

Where to Get Credit:

• Credit cards: Spend now, pay later. High interest if not paid monthly.
• Loans: From banks, credit unions, or building societies. Paid back weekly/monthly with interest.
• Bank overdraft: Spend more than you have, but interest is charged.
• Hire purchase: Pay for items in instalments. You don't own the item until it's fully paid.

Home Filing System

A home filing system keeps all important family paperwork organised, e.g. passports, bills, receipts, school reports, and bank statements.

Advantages of a Home Filing System

✔ Bills are paid on time (not forgotten or lost).

✔ Saves time – everything is in one place.

✔ Guarantees and receipts are ready if you need them.

✔ Compare past and present bills.

✔ Monitor school progress year to year.