Finance Fundamentals: Managing the Household Balance Sheet
Discover how to effectively manage household assets and liabilities in order to improve your household financial health.
53,849 enrolled on this course
Duration
4 weeksWeekly study
3 hours100% online
How it works
Finance Fundamentals: Managing the Household Balance Sheet
Prepare for the future through the effective management of household finances
Each household is its own miniature financial world, with a balance sheet comprised of assets (property, investments, pensions) and liabilities (household debts). Prudent management is essential to ensure these finances deliver the best returns.
On this course, you will learn to effectively manage your household wealth. You’ll learn about different types of borrowing and the associated debts, different types of mortgage, and different ways to invest your money.
By gaining a stronger grasp of household finance, you can best prepare for the future, and ultimately for a comfortable retirement.
Syllabus
Week 1
Debt and borrowing
Debt, interest and inflation
The UK’s mountain of personal debt. Are there ‘good’ and ‘bad’ debts? How the Bank of England sets interest rates. Interest calculations – simple and compound. How does inflation affect the cost of borrowing?
Credit scoring and the interest rates you pay
More on interest – the choices for borrowers. Take the credit scoring test. Find what opens and closes the door to getting a loan. Explore the links between credit quality and interest rates on debt.
Lenders and making good borrowing decisions
Meet the lenders and their debt products. Use the financial planning model to guide your borrowing decisions for those ‘big ticket’ purchases. What are the best tips for making sure that the pitfalls of borrowing are side-stepped?
Week 2
Savings and investments
Savings
Why do people save? Link savings to events in the life course. Understand savings rates and savings products. The choice between fixed and variable rate savings. See how the internet has changed the savings market.
Investing in shares
How do savings and investments differ? The risk–return relationship. Understanding share investments and the returns they offer. Why are some shares riskier investments than others?
Investing in bonds and funds
Look at bonds – the risks and the returns. Explore investment funds – the most popular way to invest in shares and bonds. Which is the best long-term performer? See how the taxman takes a cut from your investment earnings.
Week 3
Housing and the household balance sheet
Buying property
Property as a home and as an investment. Buying a property – mortgage products. What are the total costs of buying? How do you repay your mortgage? Freehold and leasehold properties – what’s the difference?
Selling property, the risks of home ownership and ‘buy-to-let’
How do you sell your property? What are the risks of home ownership? Apply the financial planning model to property purchase. When should you take action to remortgage? Look at ‘buy-to-let’ – property as an investment.
The household balance sheet
Build the household balance sheet, calculate net worth, the current asset ratio and gearing – key measures of financial health. Then link the balance sheet to the household budget.
Week 4
Pensions
State and occupational pensions
Learn about the pensions crisis in the UK – state pensions (but at what age?), occupational pensions and now ‘workplace’ pensions. Calculate your pension income.
Personal pensions and planning your pension
Personal pensions and the pensions revolution unveiled by the government in 2014. The move from final to average salary pensions. How does spending in retirement change? Apply the financial planning model to pensions.
Pension planning – can you afford to retire?
Completing the plan for your pension. Deciding, acting and reviewing your plan. How well are you preparing for retirement? Are you sure you can afford to retire with your current pension plan?
Who is this accredited by?
This course is accredited by EOCCS, the first international quality benchmark for online courses in business and management education.
When would you like to start?
Start straight away and join a global classroom of learners. If the course hasn’t started yet you’ll see the future date listed below.
Available now
Learning on this course
On every step of the course you can meet other learners, share your ideas and join in with active discussions in the comments.
What will you achieve?
By the end of the course, you‘ll be able to...
- Identify and understand the different forms of borrowing and the cost of debt
- Explore the different ways to invest and the returns provided by different investments
- Identify and understand how to buy and sell property
- Explore the ways to plan for a pension income
- Identify and understand how to compile a household balance sheet and to measure the risks associated with it
Who is the course for?
This household finance course would be useful to anyone looking to more effectively manage their own household wealth and debts, with a view to preparing for the future. If you want to better understand the buying and selling of property, personal investment vehicles, and different forms of borrowing then you could benefit.
This course might also be of interest to current or aspiring business and management, finance, accounting, or actuarial science students, or financial advisors.
For further information about registration, the final assessment course, your eligibility and the BA in Business Management, visit The Open University’s website.
Who will you learn with?
I am Director of the True Potential Centre for the Public Understanding of Finance (PUFin) at the OU Business School. Previously I was Treasurer of Nationwide Building Society.
Who developed the course?
The Open University
As the UK’s largest university, The Open University (OU) supports thousands of students to achieve their goals and ambitions via supported distance learning, helping to fit learning around professional and personal life commitments.
Established
1969Location
Milton Keynes, UKWorld ranking
Top 510Source: Times Higher Education World University Rankings 2020
The Open University Business School
A pioneer in flexible learning for over 30 years, The Open University Business School delivers transformational, high quality business and management education which is quality assured.
Ways to learn | Buy this course | Subscribe & save | Limited access |
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| Choose the best way to learn for you! | $109/one-off payment | $244.99 for a whole year Automatically renews | Free |
| Fulfill your current learning need | Develop skills to further your career | Sample the course materials | |
| Access to this course | tick | tick | Access expires 10 Feb 2025 |
| Access to 1,000+ courses | cross | tick | cross |
| Learn at your own pace | tick | tick | cross |
| Discuss your learning in comments | tick | tick | tick |
| Tests to check your learning | tick | tick | cross |
| Certificate when you're eligible | Printed and digital | Digital only | cross |
Cancel for free anytime |
Ways to learn
Choose the best way to learn for you!
Subscribe & save
$244.99 for a whole year
Automatically renews
Develop skills to further your career
- Access to this course
- Access to 1,000+ courses
- Learn at your own pace
- Discuss your learning in comments
- Tests to boost your learning
- Digital certificate when you're eligible
Cancel for free anytime
Buy this course
$109/one-off payment
Fulfill your current learning need
- Access to this course
- Learn at your own pace
- Discuss your learning in comments
- Tests to boost your learning
- Printed and digital certificate when you’re eligible
Limited access
Free
Sample the course materials
- Access expires 10 Feb 2025
Find out more about certificates, Unlimited or buying a course (Upgrades) Sale price available until 3 March 2025 at 23:59 (UTC). T&Cs apply. | |||
Find out more about certificates, Unlimited or buying a course (Upgrades)
Sale price available until 3 March 2025 at 23:59 (UTC). T&Cs apply.
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