Future TalentEd Summer Term 2020 Summer 2020 | Page 15

YOUNG ENTERPRISE FINANCIAL RESOURCE
STUDENT RESOURCE
Gatsby Benchmarks 1 2 3 4 5 6 7 8
Demystifying
Financial
Jargon
AGES 14-19: ACTIVITY FOR HOME
(WITH PARENTS) OR SCHOOL
TIME: 50 MINUTES
MATERIALS: FINANCIAL JARGON CARDS
Financial Education Secondary
Planning Framework links
I know some of the financial terminology that I need to understand
to calculate value for money, including APR/AER and payment
terms, some used in financial contracts, and some places I can
go for financial advice. (14-16)
I understand that I am responsible for working out which financial
products are best for my situation, or seeking appropriate financial
advice to do so. (16-19)
Activity
This activity will help students to appreciate the impact
our understanding of financial terminology can have on
our ability to make informed spending and saving decisions.
Explain that, in order to make spending and saving decisions that
suit our specific needs, we need to have clear, accessible
information about the benefits and risks of a product. Sometimes
the information provided is confusing and difficult to understand.
This can lead us to make uninformed money decisions.
To demonstrate how confusing financial terminology can be,
task the student (in groups, if within a classroom) to try to match
the financial jargon cards (below) with their corresponding
definitions. Explain that this is not an easy task and many adults
wouldn’t be able to do it. Once the students have matched their
cards, share the correct answers.
Ask the student/s whether they’ve seen these terms before and
where they’ve seen them. They’ll probably recognise them from
advertising and possibly from small print in contracts. Ask them
whether they find any of the terms confusing.
Challenge the student/s to choose a few terms and create
definitions that are more accessible for young people.
Ask students to share their new ‘young-people friendly’ definitions.
In a classroom situation, they could test them out on the rest of
the class. Are the terms clearer with these new explanations?
Students could refer to the glossary in
Your Money Matters, pages 141-150.
Discussion opportunity
What are the consequences of not understanding financial
terminology when making spending and saving decisions?
Find out more:
www.young-enterprise.org.uk/MMW
Financial Jargon Cards
APR
(annual percentage
rate)
AER
(annual equivalent
rate)
Statement
Depreciation
Assets
Profit
Reserves
Accrued interest
Arrears
Cashback
Credit score
Equity
ISA
(individual savings
account)
PPI (payment
protection insurance)
Variable rate
interest
The total cost of a loan,
taking into account the
interest you pay, any
other charges and
when the payments
are due.
Used as a way of
comparing different
borrowing products;
the higher this rate, the
more expensive the
loan.
Takes into account the
charges and the
interest paid on
savings and shows it
as an overall
percentage rate.
Used as a way of
comparing different
savings products; the
higher this rate, the
better the return on
your savings.
A document from the
bank or building
society that shows all
your recent payments
into, and withdrawals
from, your account.
You should check it
with your own records.
A reduction in the value
of an asset over time.
An item of property
owned by a person or
company that has a
monetary value.
The amount of money
left after all costs and
expenses have been
deducted from income.
Retaining or saving
for future use.
The interest on a loan
or a bond that has
accumulated from the
time the principal
investment was made.
Money that is owed
and should already
have been paid.
A system in which
banks or businesses
encourage people to
buy something by giving
them money after they
have bought it.
OR
An amount of money
that a shop, usually a
supermarket, allows
you to take from your
bank account when you
pay for something with
a bank card.
A score given by a
credit agency based on
your credit history,
personal and financial
circumstances. It
reflects the level of risk
in lending to you and
the likelihood of you
paying credit back and
helps them to decide
whether you are likely
to repay the loan you
are asking for.
The value of a property
after you have paid any
mortgage or other
charges relating to it.
OR
The value of a
company, divided into
many equal parts
owned by the
shareholders, or one of
the equal parts into
which the value of a
company is divided.
An account where you
don’t pay tax on
interest earned.
An insurance policy
that helps you keep up
loan repayments if you
can’t pay them
because of
redundancy, accident
or illness.
When the interest rate
you are charged is not
fixed, so interest
payments may change
if the lender changes
their rate.