JSS3 Business Studies Lesson Note on Personal Finance

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TOPIC: PERSONAL FINANCE

CONTENT:

• (a) Meaning of personal finance
• (b) Uses of budget.
• (c) Sources of finance for individuals
• (d) Consumption and choice
• (e) Scale of preference
• (f) Modesty: (1) Meaning of Modesty (2) Attributes of Modesty: (i) Simplicity (i) Honesty (iii) Prudence (iv) Contentment etc.
• (g) Effect of modesty
• (h) Link between modesty and extravagant
• (i) Preparation of personal or individual budget.

Sub topic 1: (A) MEANING OF PERSONAL FINANCE

Personal finance refers to the methods in which an individual manages his money assets and real assets.

Examples of money assets are –cash and money market instruments.

Examples of real assets are – land, buildings, furniture’s, equipment’s etc

(B) USES OF PERSONAL BUDGET

• (I) It makes us live within our income.
• (2) It shows how money is to be spent and being spent.
• (3) It helps to control expenditure and ensure self or financial discipline.
• (4) It guarantees maximum satisfaction.
• (5) It enables families communicates their financial conditions to members.
• (6) it inculcate saving habits
• (7) It enforces lessons learnt from popular financial equation.
• (8) It indicates the need for additional or surplus budget.

(C) SOURCES OF FINANCE FOR INDIVIDUALS

The following are common sources of finance for individuals;

1. Loans from banks, individual, cooperative society and financial institution.
2. Personal savings, profits on business, commission, rents or rates from bank or people
3. Borrowing from friends and relations or family members.
4. Credit facilities from supplier, Producers or marketers.
5. Wages, salaries, award, gift, or promotion from advertising or other agencies.

(D) CONSUMPTION AND CHOICE

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