Household income + Expenditure Flashcards
What is income?
The money received by a person or household.
What are the 2 types of income?
Regular and irregular income.
What is regular income?
Income received every week or every month. (Wages)
What is irregular income?
Income received now and again. (Overtime)
What is benefit in kind?
A non-cash form of income. (Salesperson receiving company car)
What is expenditure?
The amount of money we spend during a particular period of time.
What are the 3 types of expenditure?
Fixed, Irregular and Discretionary expenditure.
What is Fixed expenditure?
Items of expenditure where the amount we spend is not related to how much of the item we use. (Mortgage or TV licence)
What is Irregular expenditure?
Items of expenditure where the amount we spend changes depenging on how much of the item we use. (Electricity bill or Household grocery bill)
What is Discretionary expenditure?
Any non-essential items of expenditure. (Cinema trip or Netflix subscription)
What are the other 2 types of expenditure?
Capital or current expenditure.
What is Capital expenditure?
Once-off or long-term items of expenditure. (House or car)
What is Current expenditure?
Day-to-day or short-term items of expenditure. (Groceries or car fuel)
What is Impulse buying?
Buying something on the spur of the moment without thinking of the consequences. (Buying something at the shop till that isn’t needed)
What is Opportunity cost?
The item we had to do without in order to afford another item. (Buying shoes instead of clothes)
