Personal finance:
Money matters
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1. How to pay (6 points)
Diane makes most of the family payments. There are different ways to do so. The terms in bold are not where they should be. Put them in the right place.
In the supermarket, Diane usually pays online (A) , that is to say, with coins and banknotes. She uses bitcoins
(B) only for larger amounts.
She remembers that many years ago, when they bought their first car, she issued a bank transfer (C) to pay for it. And to pay invoices, she used to go to the bank, fill in a form and make the payment by cash
(D) . Now, she makes all kinds of payments cheque (E) . And she believes that some day, people will pay for everything digitally, for example, by using credit cards (F) .
2. Making your living (10 points)
Every month, Diane checks all the items on Robert’s and her pay slips to make sure that the correct amounts have been deducted. A German friend helps her to do this. Fill in the missing vowels in the words in bold.
The first amount that is shown on their pay slips is the (A) gr ss
s l ry. It would be nice if this sum were the money that the family could spend! However, from this amount, several deductions are made. A certain percentage of their income goes to (B) n mpl ym nt ns r nc and to the (C) p ns n ns r nc f nd. As a result, if they should one day lose their jobs, they would receive (D) n mpl ym nt bn f ts. And when they retire, they will get paid a (E) p ns n. Another deduction is for (F) h lth ns r nc .
As Diane and Robert are employees, all these deductions are split into the (G) mpl y r and the (H) mpl y contributions. And, of course, Diane and Robert have to pay (I) nc m t x. The last figure on the pay slips is the most important one: the (J) n t
s l ry — the amount of money available to them to spend or save.
3. Easy come,... (7 points)
Apart from their salaries, Diane and Robert have other sources of income. Choose the right option from the words in bold.
⋅
The two couple children. receives (A) child benefit/income for each of their ⋅
Diane emergency has (B) service additional/added of a dental clinic, income where from she a works job in one the weekend per month. ⋅
They also earn (C) rental/housing income from their house in Oxford. ⋅
Robert holds shares in his company and gets paid an (D) annual dividend/deposit. ⋅
They also receive the (E) proceeds/processes from their capital investments. ⋅
And one day, when they are retired, they will both receive a
(F) state pension/rent. Robert will also receive money from his company’s (G) occupational/operational pension scheme.
4. ...easy go (6 points)
Diane keeps a careful record of the family’s expenditure. A lot of money is spent on fixed costs every month. Match the terms to their definitions.
A. rent B. additional/ancillary costs C. subscriptions
D. insurance E. instalments F. membership fees
1. the regular payments that you make for something that you
bought but have not yet paid for in full
2. payments made for media, either print or digital, that you receive regularly
3. the money you pay, usually on a monthly basis, to live in a flat
or house that you do not own
4. payments made to an association or organization to which you
belong
5. the extra money (apart from rent) that you pay for living in a house or flat — such as for waste disposal, water, the cleaning of the staircase, etc.
6. payments made for policies taken out to protect you against
certain risks
5. Money in the bank (8 points)
Diane and Robert have had a look at their monthly bank statement. It shows an overview of all the transactions carried out during that month. Unscramble the words in bold.
Diane: Robert, I’ve downloaded this month’s statement for our (A) centrur acntcou
. Could we have a look at it together?
Robert: Sure. I don’t think there have been any changes to our regular commitments, have there?
Diane: No. There are the (B) kanb gesharc
for the account, payments for our
(C) gaortgem on the house in Oxford and all the usual (D) singndta dorser
for our subscriptions, the children’s tennis and ballet classes, etc.
Robert: What about the phone and internet?
Diane: The provider takes the money each month by (E) cdirte tebid
. Also, we overdrew the account twice last month, so the bank charged us interest on the (F) veroftdra
.
Robert: But why is the interest so high? I thought it was much lower.
Diane: Yes, but only up to our
(G) fovertard itlmi
. And we went over this last month.
Robert: Ouch. Oh, well. At least the
(H) ceanlab is still positive, so that’s OK.
6. Where to invest your money (7 points)
Diane and Robert do not spend all the money they earn. An adviser at the bank gives them tips on how best to invest their surplus funds. Choose the right definition of each type of investment.
A. “First of all, there is the traditional savings account. This is…
1. a deposit account in which you save money that you do not need at the moment.
2. an account free of charge from which you do all your banking transactions to save fees.
The interest is very low at the moment, but you have the money available immediately when you need it.”
B. “An alternative is a fixed-term deposit account. This is…
1. an account into which you regularly
pay an amount of money.
2. an account that is set up for a specific period of time and that provides you with a higher rate of interest than a regular savings account.
A fixed-term deposit account is a safe form of investment and, therefore, preferred by people who want to avoid any risk.”
C. “To get a higher yield, a lot of our customers like to invest their money in an investment fund. This is…
1. a fund that invests in different companies.
2. a fund that invests in developing countries.
The level of risk of investment funds ranges from low to very high. ”
D. “You could also invest your money in the commodities market. This involves… 1. investing in goods such as agricultural
products or natural resources. 2. investing in firms that distribute products worldwide.
However, this type of investment can be very volatile. Depending on the market, you may enjoy big gains but also suffer considerable losses.”
E. “Corporate bonds are another option. These are bonds…
1. issued by private companies in order to finance their activities, such as building a new factory.
2. issued by the government to raise money for supporting companies that have gone bankrupt.
Here, the level of risk depends on the companies involved.”
F. “We can also offer investments in real- estate investment trusts. This means that…
1. you buy buildings from a real- estate
agency and rent them out.
2. you invest money in a company that does business on the real- estate market — buying, selling or managing buildings.
This tends to be a longer-term investment and is not suitable if you will need quick access to your money.”
G. “Finally, have you ever considered microcredits as a form of investment? These are…
1. small loans provided to individuals in developing countries by a lending company — usually an NGO — to start their own business, for example. 2. small loans given to the municipal administration to improve the infrastructure in your town.
Many people like the idea of microcredits because they feel they are doing something good as well as earning a return on their investment.”
7. Not always bad news (6 points)
Once a year, the public utilities companies send bills for electricity and gas. Fill in the gaps with the appropriate expression from the list below.
additional payment advance payments basic charge debited refund set off
Diane: Robert, look at this bill. This is really good news!
Robert: You mean we won’t have to make another high (A) this year?
Diane: Much better! We’re going to get a
(B) .
Robert: Really? Wow! So we consumed less electricity and gas, I assume.
Diane: Yes, because we installed energy- saving bulbs, and both the new dishwasher and the new washing machine are energy- efficient.
Robert: But didn’t they increase the cost of gas for the heating?
Diane: Only the (C) . But at the same time, they offered special lower rates for those who installed a new heating system, like we did. So, all in all, we paid more for electricity and gas in our (D) than we actually used.
Robert: And how will we get our money back? Diane: The payments are automatically
(E) from our account, so I think they will (F) the surplus against our next payment. Robert: Great!