Personal finance 

Sometimes in a shop they ask you: ‘How do you want to pay?’ 

You can answer: ‘Cash  / By cheque / By credit card.’

In a bank you usually have a current account, which is one where you pay in your salary and then withdraw money to pay your everyday bills. The bank sends you a regular bank statement telling you how much money is in your account. You may also have a savings account where you deposit any extra money that you have and only take money out when you want to spend it on something special. You usually try to avoid an overdraft or you end up paying a lot of interest. If your account is overdrawn, you can be said to be in the red (as opposed to in the black or in credit).

Sometimes the bank may lend you money p this is called a bank loan. If the bank lends you money to buy a house, that money is called a mortgage.

When you buy (or, more formally, purchase) something in a shop, you usually pay for it outright but sometimes you buy on credit. Sometimes you may be offered a discount or a reduction on something you buy at a shop. This means that you get, say, £10 off perhaps because you are a student. You are often offered a discount if you buy in bulk. It is not usual to haggle about prices in a British shop, as is in, say, a Turkish market. If you want to return something which you have bought to a shop, you may be given a refund, i.e. your money will be returned, provided you have a receipt.

The money that you pay for services, e.g. to school or a lawyer, is usually called a fee or fees; the money paid for a journey is a fare.

If you buy something that you feel was very good value, it’s a bargain. If you feel that it is definitely not worth what you paid for it, then you call it a rip-off (very colloquial).

Public finance 

The government collects money from citizens through taxes. Income tax is the tax collected on wages and salaries. Inheritance tax is collected on what people inherit from others. Customs or excise duties have to be paid on goods imported from other countries. VAT or value added tax is a tax paid on most goods and services when they are brought or purchased. Companies pay corporation tax on their profits. If you pay too much tax, you should be given some money back, a tax rebate.

The government also sometimes pays out money to people in need, e.g. unemployment benefit (also known informally as the dole), disability allowances and student grants (to help pay studying). Recipients draw a pension / unemployment benefit or are on the dole or on social security.

Every country has its own special currency. Every day the exchange rates are published and you can discover, for example, how many dollars there are currently to the pound sterling.

A company may sell shares to members of the public who are then said to have invested in that company. They should be said a regular dividend on their investment, depending on the profit or loss made by the company.

1. Answer the following money quiz. 

1. What currencies are used in Japan, Australia, and India?
2. What does the expression, ‘hard currency’ mean?
3. Main two credit cards which are usable world-wide.
4. Give two examples of imports that most countries impose customs duties on.
5. Give three examples of kinds of income that would be classed as unearned.
6. What is Dow Jones index and what are its equivalents in London and Japan?
7. Give an example of something that is priceless and something that is valueless.
8. Name the coins and banknotes used in your country and one other country.

2. Match the words on the left with their definitions on the right. 

1.      interest 2.      mortgage 3.      an overdrawn account 4.      savings account 5.      current account 6.      pension 7.      disability allowance 8.      child benefit 9.      grant

a bank account with minus money in it money paid towards the costs of raising a family money given by the government for education, welfare, etc. an account that is used mainly for keeping money money paid to people after a certain age an account that cheques are drawn on for day-to-day use money chargeable on a loan money paid to people with a handicap a loan to purchase property

3. Is the ordinary ‘person-in-the-street’ pleased to see these newspaper headlines or not? 

4. Complete the sentences. 

1. Money which has to be paid on what you inherit is known as ……………. .
2. If the bank lends you money, you have a bank …………… .
3. If you have some money in your account you are in the …………………… .
4. I paid too much tax last year so I should get a ………………….. .
5. If it’s no good, take it back to the shop and ask for a ……………………. .

5. Fill in the table below for your own country. 

Rate of inflation Exchange rate (against the US dollar) Interest rate Basic level of income tax Rate of VAT Monthly state pension

………………………………………………. ………………………………………………. ………………………………………………. ………………………………………………. ………………………………………………. ……………………………………………….

To improve your financial vocabulary, read articles on business in any English magazine or newspaper. Write down any new words or expressions that you come across. 

(from English Vocabulary in Use)