Winning Teams in Education Blog

Retailers continue to lend recklessly

Moneyweb provides us with a well illustrated case of a SA retailer still lending recklessly, even following the new provisions of the National Credit Act. Entitled “Money or morals - you choose?", the article shows clearly how retailers, are still loading borrowers with additional “handling charges”, “insurance”, and “maintenance agreements”, even though the Act specifically excludes these types of charges, and allows borrows the freedom to choose their own insurance provider.

Take a look at the specifics of the case, which is a good example of how debt imprisonment occurs, and why you need to be very careful in taking on debt.

Sample financial planning questions – Grade 11

In this post, we look at the kinds of questions that you can expect to answer in the financial planning section. Personal financial planning starts with setting financial goals, and then putting together a balanced and realistic plan to meet those goals. In this section, we look at one of the most important tools to manage your finances – a budget – and introduce some of the issues that are important in financial planning, including savings, investing, and the use of debt.

Here is an example of the kind of question you will need to be able to answer on budgeting.

1. If Tumelo spends R100 per month on rent, R200 per month on groceries, and R500 on transport, what is his total monthly expense budget?

This next question is fairly straightforward. It explores the difference between short-term goals, and longer-term savings goals.

2. Which of the following is another example of a short-term saving goal?
(a) Saving for your annual holiday.
(b) Saving for children's education.
(c) Saving for retirement.

This question tests your understanding of an important financial planning principle.

3. Do you know what term is used to describe the reason that simply setting money aside will cause it to lose its value over time?

Answers:
1. R800.
2. (a) Saving for your annual holiday.
3 Inflation.

Sample banking questions - Grade 10

We begin our series of sample questions for learners and educators, by taking a look at banking. South African banking is dominated by the big four banks - Absa, Standard Bank, First National Bank, Nedbank, - and Postbank, which is a division of the South African Post Office.

According to wikipedia, First National Bank is South Africa’s oldest bank, which started in 1838. Today, South Africa has an impressive banking sector that compares favorably with that of developed countries, and is growing strongly.

To start your study of banking, you will need to be able to describe what a bank does. Here is an example question.

1. What is a bank?

To understand how to choose a bank account, you will need to understand some common banking terminology. Here is an example question to test your understanding of common terms.

2. What is meant by a 'minimum opening balance'?

Here is another slightly harder question to test your understanding of common banking terms.

3 What is meant by 'qualifying criteria'?

Answers:

1. A bank is an institution that deals in money, and provides financial services.

2. The minimum amount that an account holder must have in order to open an account.

3. The minimum requirements that a customer must meet before a financial institution will consider opening an account.

Winning Teams in Education launches new website

On the 29th of June 2007, Winning Teams launched its new “Winning Teams in Education” website at www.wteams.org. The new website provides background information on the “Winning Teams in Education programme, the programme sponsors, and Winning Teams. The new website is designed for educators and learners who are involved in the programme, and for other interested parties. The website is closely linked to the "Winning Teams in Education Blog", which has been running for some time now, and which provides useful personal financial resources and advice for educators and learners.

Worldwide unemployment map

This is the CIA's map of worldwide unemployment.

These are SA's financial services watchdogs

These are South Africa's financial services watchdogs. They help consumers with problems and complaints.

• The National Credit Regulator is responsible for the regulation of the South African credit industry.
• The Ombudsman for Banking Services resolves individual complaints about banking services and products.
• The Ombudsman for Long-Term Insurance mediates between insurers and policy holders.
• The Ombudsman for Short-Term Insurance resolves short-term insurance complaints.
• The Ombud for Financial Services Providers deals with complaints about brokers and insurance companies.
• The Financial Services Board oversees South Africa's non-banking financial services industry, including pension funds.

Solve your problems with these financial calculators

Today I scoured the web to find some effective South African online financial calculators that can help with common financial challenges, from working out how much tax to pay, to buying a home. These calculators come from reputable sites, but as always, use with care.

• Equinox provides an online retirement calculator to determine whether you have enough assets and/or are saving and investing enough to meet your retirement needs.
• SARS has a quick tax assessment calculator, which is bit tricky to get working.
• Old Mutual's income tax calculator for 2007.
• Bankmonitor has several financial product comparision calculators.
• Wesbank provides a vehicle finance calculator.
• Standard Bank's home loan calculator.
• Mortgage SA's home loan calculator.

Links of the day: Banking

Sites that focus on “Banking”.

• Australian Bankers’ Association financial literacy program - fact sheets, managing your money booklets, and other useful stuff.
• Practical Money Skills - American-based resources for teachers, students, and parents.
• Bank Monitor - A free South African site that allows you to compare products across banks, and also has a useful “Assistance Centre” for various products.
• FIDO - Financial tips and safety checks from the Australian Securities & Investments Commission.
• Money Made Clear - The UK Financial Services Authority’s guide to banking and money management.

South African banking websites

• Standard Bank
• PostBank
• Absa
• FNB
• Nedbank

Webapps to help manage your money

There are literally thousands of software programs to help manage money. Here’s a list of online web applications to help you. Most are free. I can’t say that I have used all of them, so proceed with caution.

• Plan 2 Spend - http://budget.10try.com/. Free online financial tool to help you track and organize your expenses.
• mo.neytrack.in - http://moneytrackin.com/. Free online webapp that allows you to track all your expenses and income easily and without effort, thus allowing you to have a clear view of your financial situation.
• Wesabe - http://www.wesabe.com/. Makes it easy to better understand how you spend your money and links you to a community of people dedicated to helping each other make better financial decisions.
• Billster - http://www.billster.net/. Free online webapp designed to help you organise your personal and shared expenses. Great site if you share a house, and need to keep track of shared expenses.

Take this financial literacy quiz

See if you can correctly answer the following questions. These have been designed to test basic financial literacy at school-leaver level.

1. Inflation can place financial pressure on people. Which group would have the greatest pressure during periods of high inflation that last several years?

• a) Young couples with no children who both work.
• b) Young working couples with children.
• c) Older, working couples saving for retirement.
• d) Older people living on fixed retirement income.

2. Which of the following is true about VAT?

• a) You don't have to pay VAT if your income is very low.
• b) It makes things more expensive for you to buy.
• c) The VAT rate is 6%.
• d) SARS will deduct it from your pay cheque.

3. Under which of the following circumstances would it be financially beneficial to you to borrow money to buy something now and repay it with future income?

• a) When some clothes you like go on sale.
• b) When the interest on the loan is greater than the interest you get on your savings.
• c) When you need to buy a car to get a much better paying job.
• d) When you really need a holiday.

4. Tom just found a job earning R2,000 per month. He must pay R800 for rent and R200 for groceries each month. He also spends R200 per month on transport. If he budgets R100 each month for clothing, R150 for restaurants and R250 for everything else, how long will it take him to accumulate savings of R900.

• a) 1 month
• b) 2 months
• c) 3 months
• d) 4 months

5. Jack and John work together in the finance department of the same company and earn the same pay. Jack spends his free time studying to improve his computer skills; while John spends his free time socializing with friends. After five years, what is likely to be true?

• a) Jack will make more money because he is more valuable to his company.
• b) Jack and John will make the same money.
• c) John will make more because he is more social.
• d) John will make more because Jack is likely to be fired.

These questions are based on the annual Jump$tart financial literacy survey in the US. The Jump$tart Coalition for Personal Financial Literacy is a non-profit organisation dedicated to raising the level of financial knowledge in the United States.