Budgets, Financial Lifecycle And Banking

Question 1

Define regular income and give examples

Answer 1

Regular income is money received every week or month

E.G. Wages, salaries, child benefit, pensions.

Question 2

Define irregular income and give examples

Answer 2

Irregular income is money received from time to time

E.G. Overtime payments, commission, bonus payments, gifts

Question 3

Give examples of Benefit-in-kind

Answer 3

Health insurance, company cars, discounted travel

Question 4

What is BIK?

Answer 4

Benefit In Kind

Question 5

Name the three types of expenditure

Answer 5

Fixed
Irregular
Discretionary

Question 6

Describe fixed, irregular and discretionary expenditure

Answer 6

Fixed: a set amount on a regular basis
Irregular: amount and timing changes on a regular basis
Discretionary: non-essential items

Question 7

What is current expenditure?

Answer 7

Money spent on day-to-day items that only provide a benefit for a small period of time

Question 8

Define capital expenditure

Answer 8

Spending money on items that will provide benefit for more than one year

Question 9

Define opportunity cost

Answer 9

Item or service that you can forgo in order to buy another item or service

Question 10

Define financial cost

Answer 10

The price of the item

Question 11

What is gross and net pay?

Answer 11

Gross pay is the pay an employee earns before other deductions
Net pay is pay after deductions

Question 12

What does PAYE stand for?

Answer 12

Pay As You Earn

Question 13

What’s does PRSI stand for?

Answer 13

Pay Related Social Insurance

Question 14

What does USC stand for?

Answer 14

Universal Social Charge

Question 15

What are voluntary deductions?

Answer 15

Deductions that you volunteer for such as charity, pension etc

Question 16

What’s disposable income?

Answer 16

Money you have to spend on discretionary items

Question 17

Identify the difference between needs and wants

Answer 17

Needs are things we cannot survive without and wants are items we would like to have but are not essential

Question 18

Name all five stages in the financial lifecycle

Answer 18

Childhood 0-12
Teen/young adult 13-20
Setting up a home 25-35
Growing career and family 30-65
Retirement 65 onwards

Question 19

Define a current account

Answer 19

allows you to lodge and withdraw money. For day-to-day transactions

Question 20

What does lodge and withdraw mean

Answer 20

Lodge means to put money into a bank account

Withdraw means to take money out of a bank account

Question 21

What does ATM stand for

Answer 21

Automated Teller Machine

Question 22

What services are provided by an ATM

Answer 22

Withdraw money, check your balance, pay bills and get credit

Question 23

What’s a debit card

Answer 23

Allows money to be transferred electronically from the customer’s bank account to the retailer’s bank account.

Buy now Pay now

Question 24

What’s a credit card

Answer 24

Allows you to get the item that is desired instantly but when the full bill comes, you have to pay

Buy now Pay later

Question 25

What does PIN stand for

Answer 25

Personal Identification Number

Question 26

What is a check

Answer 26

A written instruction to a bank to pay a stated sum of money from their bank account to a named person’s bank account.

Question 27

What happens if the person who gave you a check doesn’t have enough money to supply you with?

Answer 27

It will bounce

Question 28

What does CT stand for and what does it mean

Answer 28

Credit Transfer: allows you to transfer money from your bank bank account to another bank account

Question 29

What’s Paypath

Answer 29

An electronic way of transferring an employee’s wages to from an employer’s bank account to an employee’s bank account

Question 30

Name advantages of paypath for the employee and the employer

Answer 30

Safer for employer because they don’t have to carry large amounts of money on pay-day and saves employee time because the money is already in the bank account

Question 31

What is overdraft?

Answer 31

Permission to withdraw money for more than the balance for a limited time up to a certain limit

Question 32

What is standing order

Answer 32

Planned automatic payment to a stated persons account on a fixed time

Question 33

What is direct debit

Answer 33

Planned automatic payment to pay a variable amount to a stated persons account on a fixed time.