household finances Flashcards
role of household as financial unit in economy
- pay statuatory taxes, provide revenue to maintain state services
- spend wages on goods and services generating wealth and employment
- mortgages and loans contribute to profits of financial institutions
- money management skills teach kids to budget etc to prevent reliance on social welfare
- many self sufficient but if many rely on social welfare, economy is under pressure
social factors affecting income
age
gender
socioeconomic status
culture
tax credits
reduce the amount of tax a person must pay
calculated on number of factors
what is prsi? name 2 prsi benefits
pay related social insurance
compulsory tax taken from a persons gross pay by employer before payment of wages/salry and given to the revenue commissioners. used to pay for social welfare payments eg jobseekers benefit and maternity benefit. min of 39 payments a year must be paid to claim these benefits
P60
end of year
details of pay, and income tax, prsi and usc deducted by employer and revenue
P45
given if a person leaves employment
statement of pay
used by new employer to help work out how much tax individual must pay
state pension
weekly payment to individuals over 66 who have paid min number of prsi contributions
widows/surviving partners pension
weekly payment to wife or husband or partner of a deceased person who have paid min number of prso contributions
jobseekers benefit
weekly payment to those who have paid min number of prso contributions
to qualify:
be fully unemployed or unemployed for at least 4 out 7 days
be capable, available and actively searching for work
maternity benefit
weekly payment to women on maternity leave who have paid min number of prso contributions
state pension (non contributory)
weekly payment to those over 66 who dont qualify for contributory state pension
widows pension (non contributory)
weekly payment to husband, wife or civil partner of deceased who dont qualify for contributiry state pension and has no dependent children
jobseekers allowance
weekly payment to those who dont qualify or have used up their entitlement for jobseekers benefit
family income supplement (FIS)
weekly payment available to low income families with children
receive 60% of difference between their income and income limit for family size
to qualify:
must be working min 19 hrs
have at least one dependent child
have income that falls below certain limit for their family size
supplementary welfare allowance
weekly payment by Department pf Social protection to those whose means dont meet their or their dependents needs
- must satisfy means test
- must be waiting on social welfare payments to be processd
- have registered for work with their local intreo office
child benefit
monthly payment to the parents or guardians of children under 16 or under 18 if in full time education, youthreach or has a disability
difference between social assistance payments (contributory and non contributory) an universal payments
- to someone who has paid minimum of 39 weeks of PRSI contributions-not means tested
- payments to those who have insufficent PRSI contributions, means tested
- payment to every individual regardless of prsi contributions, nont means tested
factors contributing to different patterns of household expenditure
socio economic status
family (size, ages etc)
location - urban more expensive to live, rural- travel expenses
beliefs and values
ways to reduce household expenditure
food shopping - discount stores, own brand, non perishables when on offer
household bills-turn down thermostat, compare cost of various utility providers, use eco setting on washing machines, dishwashers etc-fill up.
clothing- buy second hand, or during sales
travel- walk or cycle,carpool, buy yearly passes
advantages of budgeting
- helps develop good money management skills
- areas of overspending will become apparent and debt can be avoided
- alleviates stress and worry
- reduces reliance on credit
- provides financial security
- has savings element therefore can help cover unplanned events
guidelines to follow when budgeting
- estimate total income
- list all expenditure
- allocate percentages of income
- allocate savings
5 review and reevaluate
how does mabs assist families experiencing financial difficulties
- provide free, confidential, independent money advice service to those at risk of/in debt
- provide confidential money advice and budgeting service
- facilitates clients to develop the knowledge they need to avoid getting into debt and to deal effectively with debt situations if it arises
- identify sources of credit that best meet needs of client to pay back debt
credit
involves borrowing money to purchase goods or services and repaying it at a later date
discuss hire purchase referring to description, issued by, interest and agreement conditions
combination of hiring and buying goods, do not fully own good until last instalment paid- goods may be repossessed
- lending institutions and retailers eg garages and furniture shops
- interest about 8%
- must sign written agreement containing:
- description of goods
- cash price and hire purchase price
- number of payment instalments
- amount of each instalment
- names , signatures and addresses of all parties involved
- statement saying individual has right to withdraw within ten days - cooling off period
- rights of parties involved
- fees and penalties that apply
