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Finance - Essay Example

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Purchases by store card went down from 134 in 1998 to 83 in 2005, thus reflecting a negative trend. However, this cannot be generalized as there was a negligible change in the years from 1998 to 2003, after which there seems to have been a steady downtrend.
The total purchase on plastic cards showed a continuous and consistent growth during the period under study. From a figure of 3094 in 1998, the purchases grew to almost double or 6094 in 2005.There was also an increase in ATM and counter withdrawals, though the rise was not a steep one in the period under observation. For automatic transactions (e.g. direct debits, standing orders) there was a steady increase from 1998 to 2005, with the growth being faster in the period from 2003 to 2005.Payment by cheques , showed a negative growth from 2,988 in 1998 to 1,931 in 2005 i.e a reduction of almost 35%.Thus, there seems to have been a decline in the use of cheques for payments in the given period
In 2005, the use of cash for transactions fell to 23,968 from 25,309 in 1998. Withdrawals from Post Offices also fell drastically in the period under observation. In 2005, it fell to almost 25% of the value as compared to 1998.
While the total value of all transactions remained more or less the same till 2005, for the observation period, it grew marginally from 1998 to 2000, from 37,381 to 40,966.Thus, we can conclude that though there was not much change in the value of transactions from 1998 to 2005, the usage of plastic money, especially debit cards grew phenomenally in the given period. Cash transactions showed a negative trend and Post Office cash withdrawals went down drastically. We can also safely conclude that the group was moving from a credit society to a credit free one. People have realized the value of thrift and do not plunge blindly into credit card obligations. Instead, they spend through debit card, which draws upon the money already available in their account, and is also safer to carry around than cash. Thus, the consumer seems to have become wiser in the given period.

Part B

Briefly describe the financial planning model and outline what it is designed to
achieve. Give an example of how the 'review' stage of financial planning might
need to take into account a change in social and economic context and an
example of how it might need to take into account the individual's life course.

Financial plans are a means of achieving goals. Therefore, being clear about goals helps when working out financial plans. The following table shows how some goals can be achieved by financial planning. In each case, the financial plan provides a means of achieving a goal.

Financial plan
Help the homeless
Adjust pattern of spending
Reduce debt worries
Improve debt management
Have some money to draw on in a crisis
Build up an emergency fund
Have a lump sum for specific projects
Build up short-term savings
Have a comfortable retirement
Build up long-term savings
Buy flat
Save for a deposit
Protect dependants
Make a will

Financial planning can take place in four stages. Stage 1 is to assess the situation, including the relative importance of different goals. Stage 2 is to decide on a financial plan, given goals and constraints. Then, Stage 3 is to act on the financial plan, and Stage 4 is to review the outcome of the ...Show more


This table reflects the typical shifting spending patterns of the group from the years1998 to 2005. The first observation is that purchases by debit card have grown steadily over the years. From 1,736 in 1998 to 4,084 in 2005, there was almost a four fold jump in the use of debit cards…
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Finance essay example
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