Unit VI. Finance. Money and credit

Exercise 1. Learn the following words and word combinations.

literacy	грамотність
insurance	страхування
credit management	регулювання кредитів
income	прибуток, дохід
saving	заощадження
retirement	вихід на пенсію
stretching	розтягування
mortgage	іпотечна застава, іпотечний кредит

Exercise 2. Read, translate and give the gist of text 1.

Text 1. Financial Literacy

Financial literacy encompasses the knowledge and skills for personal financial planning, the selection of financial services, budgeting and investing, developing an insurance program, credit management, consumer purchases, consumer rights and responsibilities, and decision-making skills for all aspects of life as consumers, workers, and citizens.

Financial literacy affects all aspects of an individual’s planning and spending: income, money management, the use of credit, saving and investing, and decision-making for the wise use of resources. A lifelong process, financial literacy is a critical area of knowledge and skills for all consumers who must make choices about their financial resources. From a child’s earliest spending to a senior citizen’s retirement decisions, individuals apply their knowledge and skills to financial choices. Managing finances has become increasingly complex.

Income

What income is to be managed? This question is a first step in wise management of financial resources. All consumers must manage their finances, but incomes vary.

“Stretching” income to meet needs and wants is a part of financial management; knowing how to develop goals for spending, based on a realistic understanding of income, is a basic part of financial literacy.

Money management

Money management is the process of planning how to get the most from money - how to use money to meet needs and wants. Budgeting, either by a formal or informal plan, is a first step in deciding what needs and wants must be met and what resources are available. Money management includes plans for saving and investing, not just spending.

Too often consumers spend all of their income, which means no money is left for saving.

Saving and investing

Consumers must set goals for saving and investing, because their choices of vehicles for saving and investing depend on those goals. Saving, contrasted to investing, may be thought of as safeguarding money for future use.

Saving may not provide a return on money. Investing, however, may be defined as putting money to use in order to earn a return. Providing for the future can mean short-term savings and long-term investments. If a goal is to provide retirement income, a consumer should consider long-term investment. Buying a new small appliance, on the other hand, may require only short-term saving.

Income, money management, saving and investing, and the use of credit require consumer planning and decision-making skills. Underlying all aspects of financial literacy is the knowledge and skills for wise use of all financial resources a consumer may accumulate over a lifetime.

Use of credit

Knowledge about credit is a major part of financial literacy. Consumers use credit to buy durable and nondurable goods, large and small. Credit provides a convenient way to “buy now, pay later.” Buying on credit enables a consumer to build a credit rating, a necessity for mortgages and loans. All consumers should be aware of the ways in which they can use credit as a convenient way to purchase goods and services, but they should also know the costs of credit and how to avoid the pitfalls of unwise use of credit.

Exercise 3. Translate into English.

Фінансова грамотність, фінансове планування, складання бюджету, інвестування, програма страхування, регулювання кредитів, права та обов’язки споживачів, дохід, заощадження, задовольняти потреби, довгострокові інвестиції, покупка, накопичувати, іпотечний кредит, позика.

Exercise 4. Answer the questions.

1. What does financial literacy encompass? 2. What does financial literacy affect? 3. What is financial literacy? 4. What does money management mean? 5. What is the difference between saving and investment? 6. Why do consumers use credit? 7. What skills do consumers need for wise use of financial resources?

Exercise 5. Complete the sentences according to text 1.

1. Financial literacy is a critical area of … 2. Individuals apply their … to financial choices. 3. Knowing how to develop … is a basic part of financial literacy. 4. … is a first step in deciding what needs and wants must be met and what resources are available. 5. Investing may be defined as … 6. Credit provides a convenient way to ... 7. All consumers should also know the costs of credit and how to ….

Exercise 6. Put 5 types of questions to the sentence.

Credit provides a convenient way to “buy now, pay later.”

Exercise 7. Compose a dialogue on “Financial Literacy”.

Exercise 8. Comment on the proverbs.

1. Money is power.

2. Money has no smell.

3. Money is the root of all evil.

4. Money makes money.

Exercise 9. Learn the following words and word combinations.

take for granted	сприймати як належне
consume	споживати
barter	n. бартер, товарообмін v. міняти, обмінювати
trade for	обмінювати на
cobbler	швець (що займається лагодженням взуття), чоботар
coincidence	збіг, співпадіння
evolve	розвиватися, еволюціонувати
complexity	складність, заплутаність
medium of exchange	засіб обігу, засіб обміну
measure of value	міра вартості
store of value	засіб збереження, засіб нагромадження
proceeds of the sale	виручка від продажу
stocks	акції (амер.), облігації
bond	боргове зобов’язання , облігація
real estate	нерухомість, нерухоме майно
fee	платня, комісія, гонорар
appreciate	зростати в ціні

Exercise 10. Read, translate and give the gist of text 2.