Financial Management Essay Example for Free

Financial charge EssayIntroductionIn this duty assignment I pass on be researching and discussing how to manage my birth individualised mo clamsary resource. For this I allow stupefy to research sources of income and write ab push through different types of employment and unemployment. The propel these shake up on salaries and takings pass on in addition be investigated. I have as well as been asked to research and summarise allowances and benefits. As part of the management of my personal finances I must produce a personal budget all oer a specific period of cartridge clip, on completion of this I bequeath pair with a partner and discuss my gravel divulgeings. Task 3Why is it central for me to manage my personal finance?* To helper not to run fall out of bullion* Help me with budgeting* Scarce resource* Savings* Paying bills* Living alone* Managing specie is skillTask 4Jobseekers allowanceJobseekers allowance would be paid to me if I am eligible for it a nd looking for (seeking) work. I also would have to be age 16 or over to be equal to(p) to receive line of businessseekers allowance. This source of income is relevant for me because I am over the age of 16, living on my own and I am unaw atomic number 18sly looking for work.Income rewardIncome support caters financial help for populate ages 16 and over, who have low income or no silver coming in at all. This money is for people who be not currently seeking work. This money is to help people with day to day living. Income support is relevant to me because this is the situation I am currently living in and I also receive income support myself.Child benefitChild benefit is p bents that have children under the age of 16 or children under 19 in full cadence education. Child benefit is no longer relevant to me because I do not live will my mother each to a greater extent than. house benefitHousing benefit helps towards paid my rent which would be my local power, but they don t cover all my housing costs. Housing benefit is eligible to people who be renting a elbow room or living in a hostel of sum sort. I passel apply for this by just going worst to my local authority office and filling in a housing benefit form.Working families revenue enhancement CreditWorking Tax Credit is for people who are employed or self-employed, over the aged of 16 and are on the job(p) at to the lowest degree 16 hours a workweek. They also have to have at least(prenominal)(prenominal) one child. In couples, one person has to choose who receives the measure ascribes. The come in of evaluate recognises they receive will depend on their annual income.Tax credits are not relevant for me because I am not accountable for any children and I am not currently working.Task 5When preparing for employment the documents I would need* CV* Covering letter* Application form* subject area insurance policy number* Bank details* competency certificates* P45 (maybe not for me yet)CVI would need a CV so that the employers get a brief summary of my qualifications and experience to-date. It would include the school and college I have attended. It will also include my past work experience. My CV will promptly include that I have recently worked at Superdrug. My CV will also have my references. References are very important as the employers may deprivation to contact the referees to confirm I have the qualifications for the job, and if I am reliable and trustworthy enough for the job.Covering letterA covering letter is necessary because it is a part of the formal requirement. It will show the employer where I heard about the advert and why I feel I would be right(a) for the job.Application formApplication forms are used to help the employer to separate the good candidates from the not so good candidates. They are also used to find out about information and candidates background.National Insurance No.Every one that has the right to work in the UK has the right to a national insurance number once they reach the age of 16. The national insurance number will show what national insurance contributions the worker rights over the course of his/her working life and also the contribution employers have made.Bank detailsBank details are required in order for the employer to give you your wages. Wages are now paid by direct transfer from the employer to the jargon account of the employee.Qualification certificatesProof of GCSEs and past qualifications are important because the employer will expect me to have true right qualification in order to have the job. Superdrug have specific qualifications that are required, these are called essential qualifications.Task 6Types of employmentself-importance employmentBeing self employed is when you do not work for anyone else you have your own business. For example owning your own sweets shop is self employment. The income of the sweets shop will come from the customers who purchase the sweets. The i ncome may also come from the bank if you borrow money.FreelanceFreelancers are a different type of self employment. Instead of owning their own business they sell their services by working for different businesses. For example a freelance hair dresser would not have their own hair oil business they would get to all kinds of other businesses and do hairdressing.EmployeeEmployees are people who work for someone who controls what work they do. The employer is in charge of the employees income and deducts national insurance from the employees wages or salary. As long as they is someone handling your wages before you get them you are an employee.Task 8Key points of each jobJob titleRetail handlerTasks to be carried outRetail music directors are responsible for day to day running of incision stores, chain stores, supermarkets and supreme shops.They look after staff management, including taking on and training new staff, maintaining a good standard of customer care and increasing sale s and profitability.Their duties commonly include* Making sure premises and displays are well maintained* Organising stock checking and re-ordering as necessary, through com regularizeerised or manual systems* Making sure targets are reached and all opportunities are taken to increase sales and profitability* Organising sales promotions* Recruiting, interviewing and training staff* Dealing with queries or complaints from customersSkills requiredA retail manager should* Know the companys products and procedures well* Be committed to providing a high standard of customer service* Be able to lead and motivate a squad* Have good knowledge of legal an d security issues* Have relevant commercial skills for businessQualifications requiredThere are no set academic requirements to work in retail, although employers may prefer employees to have at list five GCSEs grades A-C and have some working experience in retail. reusable qualifications would include* BTEC national reward in retail* OCR certificate in retail* BTEC Higher National Diploma in retail management* detail in retail managementIndividual qualities required* Be confident, energetic and quick thinking* Have excellent spoken English and written colloquy skills* Be able to take responsibility and stain decisions* Have a smart demeanor* Be organised* Be able to deal effectively with problems and complaintsWage/salaryStarting salaries are usually from around 12,000Experienced managers may score from around 15,000 to 26,000Managers of large stores may earn up to 65,000 or more.Job titleRetail assistantTasks to be carried outA retail assistant is responsible for making customers feel at ease when obtain and browsing around the store, directing them towards products and accepting payments. This job generally includes* Restocking shelves and making sure merchandise is presented neatly* Greeting customers and answering enquiries about products* Operating computerised tills and barcode readers to cream items* Accepting payments for goods and wrap stickg them* Checking for stock items and ordering goodsSkills required* To be accurate and thorough, even under pressure* To be trustworthy- they may be dealing with high-priced products and large nitty-grittys of cash* To understand and follow companys policies for health and safety and hygiene* Stamina, in order to serve on the shop floor for long periodsQualification requiredEmployers set their own qualification requirements. But usually look for good communication skills, a pleasant personality and look for at least to two to four GCSE grades.Individual qualities required* Have an approachable, polite manner* Have good communication skills* Have a smart personal appearance* Enjoy providing a good level of customer serviceWage/salaryStarting salaries for a retail assistant is around 9,000 a yearAn experienced retail assistant may earn around 11,500 a year.Task 9Why I think I am adapted for each jobRetail assistantI think that I am suitabl e to work as a retail assistant because I have relevant experience within the retail industry. I have recently completed a 2 week work billet at Superdrug which is in the retail sector. During this period I was privileged to be responsible for replenishing stock, providing customer advice and keeping the shop floor tidy. This placement enabled me to develop vital skills such as team working, numeracy and customer service skills which are all needed in order to become a successful retail assistant.This work placement was a part of my BTEC introductory business coarse this qualification will also enable me to suffice to work as retail assistant.Retail managerI am qualified to work in the retail sector as a retail assistant but in order to qualify as a retail manager I would have to finish my BTEC introductory coarse and then go on to study for three more years to receive a BTEC national certificate in business. After this I would then need to go and study a degree in retail managem ent in order to qualify for this job. I have good interpersonal and communication skills and while on my work experience I enjoyed providing good customer service these skills would help me with working toward becoming a retail manager. Retail managers are responsible for day to day running of department stores, chain stores, supermarkets and independent shops this may include Organising sales promotions and recruiting, interviewing and training staff.Task 10Wage/salary deductionsGross payGross pay the amount of money an employee earns before any deductions are made such as tax or national insurance.Net payNet pay is the money employees real get for them to spend.National insurance contributionsNational insurance contributions is an amount of money that the employee has to pay towards in that location employers this is deducted by the employer from the employees wages. If you are self employed you also have to pay national insurance contribution, this is a small monthly payment an d then a lump sum at the end of the year.National insurance codeNational insurance codes indicate an employees marital status and how long an employee has been working.Income taxThere is a certain amount of money that both body is allowed to earn before they have to pay income tax, this is called personal tax allowances currently for people under the age of 65 this is 5,225 a year. If you earn any more than this you will have to pay income tax, how much you pay will depend on how much money you earn.Pensions/superannuationPensions are long time investments that are designed to provide you with money in your old age when you are not able to work any more. The earlier you start your pension the more you get when you retire.Employees are usually offered a pension scheme when the start there job. The employer pays a contribution to your pension fund and so does the employee this is deducted out of the employees wages before it get to them.Union subscriptionsA union is a large group of workers in a particular industry or profession. Unions provide benefits such as legal advice and can also provide support in cases of unfair treatment or dismissal. To subscribe employees would have to pay fees this is sometimes deducted from the employees wages before it is received or the employee can pay the fees themselves but it is not compulsory.Task 11Allowances and BenefitsHousing benefitHousing benefit helps towards gainful my rent which would be my local authority, but they dont cover all my housing costs. Housing benefit is eligible to people who are renting a room or living in a hostel of sum sort. I can apply for this by just going down to my local authority office and filling in a housing benefit form. This benefits me because its helps me to unbosom money gives me more money to spend on more important things.Council taxCouncil tax is an amount of money you pay if you are renting out a council property or of you have you own property with a certain amount of people living in there. Council tax paid to pay the council for giving you their service of letting you live in their property and council tax also pay for things like people cleaning the streets.Interest from savingsInterest from savings is when you put money into the bank or a financial founding and earn extra money on top. This is called come to. When you get interest you have to pay income tax on that interest, the bank usually deducts the tax before pay the interest. This benefits me because I regularly put savings into my bank account.Inherited moneyMost people decide to leave money to their relatives when they die, this is called inheritance. Inheritance could be a small or large amount of money and it may be necessary to pay inheritance tax on it.Borrowed moneyBorrowed money is anything from a loan to a bank overdraft. Money can also be borrowed from a relative or close friend in this case the money you have borrowed is the money you pay back. If you take out a loan or overdraft which is quit a large amount of money this usually involves paying back the money monthly and each month interest is added on top of the money that you are paying. This result in you paying more that you actually took in the first place, it is much wiser that you save your money for whatever you want to get therefore you will earn interest on your money or else that earning it.Working Families Tax CreditWorking families tax credits is for people who have at least one child under the age of 16 or 19 in full time education and earn an income which is below a certain level. The person has to be working at least 16 hours a week and must have savings below 8000. this does not apply to me as I am not eligible for this because I have no children.Task 14Explanation of how I planned my personal financesSpend or saveAs soon as I receive my money I spend it on things that I need such as nutrition shopping and rent. Any money left(p) over would get spent on the gym and my mobile phone then t he rest would get put aside as my savings. maneuverGambling is when you pay money hoping for a chance of winning more money. Doing this is dangerous because you are not guaranteed your money. Gambling is very addictive and if done regularly this could put you into debt that why I choose not to go down this road.Spending habitsWhen I receive my money on a weekly basis I try and spend as little as possible on food shopping so that I have money left over for myself to spend on small luxuries for example a meal out with my friends. I sometimes tend to spend too much on luxuries and this sometimes gets me into problems but I always have someone at hand to help me.Money and life styleAt the moment the amount of money I receive doesnt allow me to have the best of lifestyles but it is enough to put clothes on my back and to buy me shopping any week. To achieve the lifestyle I want I would need to find at least a part time job so I can earn more money than Im getting now.My expectations o f work and moneyAs long as I have enough money to buy me some food and to pay the rent I am ok for the moment. But I would like a bit more than that for example going on holidays and purchasing the latest clothing. To do this I would need to find a job and also make sure that I handle my personal finances correctly and do some budgeting for these luxuries.Short term accountsEvery week I receive my income support into my bank account. I am currently using a current account all my bills are paid out of this account and all my Ema payment come into this account.I also have a short term savings account which I put money into every week. I use this account when I run out of money or need to pay for something important e.g. phone bill.Long term accountsA long term savings account is an account that allows you to build up interest on money that you are saving over a number of years. An example could be an ISA, this is an individual savings account because it is tax free provided the amou nt saved each year doesnt exceed 3,000. The interest is cumulative which means the amount of interest plus capital will increase year on year.Another example of a long term account is a bank loan. A bank loan is usually drawn over a long period. This is a lump sum of money that I borrowed from the bank and paid off over a long period of time. For example a mortgage is paid over a period of 25 years.Cheque bookA confirmation is a promise to pay someone in place of cash. When you are writing a hinderance you write down exactly how much you are going to pay the person. The person then takes the cheque to the bank and waits for it to clear this takes between 3-5 days. It is important to make sure that you have the right amount of money in your bank so you dont go into debt. It is also important to keep a record of any cheques that have been written, this can be done by using stubs which are left in the cheque book after you tear it out to pay someone. The stubs are there so that you c an note down the details of the cheque and will help keep track of your money.Credit pestersA credit card is a card that you can use to pay for items of clothing or products. This card however gives you money on it but you have to pay it back you are also given a credit limit. To avoid spending more money than you actually have you should usually pay back the money within a month if the money is paid after this you will be charged interest. If you go over the limit that the company has given you interest will also be added. Also you can check how much money you are spending by checking a mini statement that you can get from a cash point.Debit cardsDebit cards are cards that have your own money that you put on to the card. You can use this card to purchase virtually anything but instead of having a credit limit of borrowed money you are actually using your own money to purchase goods. A calculate card allows you to take cash out of ATMs if you have enough money in your account. To see how much funds you have in your account through an ATM you are given a pin number by your bank to memorise this then allows you to draw cash from the machines and purchase items in shops.To check that no-one is stealing from you or to make sure you are not spending more money than your supposed to it is good to check your bank statement each month these are sent to you by your bank. The bank statement show how much money you had in your account originally, then show all payments that were taken out of that money. You can then check if there are any payments that you are unsure of or if any mistakes were made in you transactions.Paying billsBills can be paid using direct debit or standing orders. This is when you money is taken out of you account and paid to a business for example, BT telephone company at the same time every month. This can help with budgeting, as you will know how much money is going out every month. To check that you are not paying out more than youre supposed to you can check the phone bill you receive every month.Remaining in creditIt is important to manage your account guardedly to ensure you stay in credit. You must make sure that when you making payments such as cheques and debit cards you have enough money to make those payments. If not you account will go in to debt and you will be charged fines for doing this, it will also build up a bad credit rating which will make it hard for you to get a mortgage or a credit card in the future.Task 16 epitome of holiday budget activityWhy do you think it is important to manage your personal finances?I think it is important for me to manage my finances because it helps me to pay all my bills on time without getting into to debt. It also allows me to put money aside for unexpected emergencies. Managing my personal finances is a very important skill. This skill is extremely important if I would like to start my own business or borrow money from a bank. Managing my money correctly will enable me to live quiet a prosperous life in the long run.Did you find it easy or difficult to manage the finances given in exercises? give reasonsI found managing finances quiet hard because you have to keep track of the money coming out of my income every week and there were a lot of different bills to pay and they were all different amounts. I also had to keep track of my spending at the same time to make sure that I didnt get into debt this was really difficult because you can get carried away when your sending your money on luxuries. After all that I have to calculate the total regular expenditure and then work out if I had any money left over to put aside as savings, overall this task was very challenging but it taught me a lot about how to manage my own finances.What did you learn from the exercise on budgeting over a period of time?From doing the budgeting exercise I learnt that saving the little scraps of money here and there builds up into to something big. Also cutting down on lu xuries also helps in the long run because the money you have saved enables you to get those luxuries if you just give time. This budgeting exercise also taught me how to calculate my net cash flow which I previously did not know how to do. I also learnt that budgeting is important for everyone because it stop many people from getting into to debt and also helps them to save considerable amount of money.BibliographyBTEC introduction business-published by Heinemann in 2005Heinemann Educational PublishersHalley Court, Jordan Hill, Oxford OX2 8EJISBN 978 0 435401 21 4John Ruskin college intranet siteUnit 6 Financial Management