Management of household finances Flashcards
outline how the family functions as a financial unit within the economy.
purchasing of food, necessities, accommodation
Contribute taxes
budgeting
savings accumulate money
the family may depend on the state e.g state pension
name four factors that affect household income
age
sex
social class
culture
name 4 sources of household income
wages/salary
pension
social welfare
other incomes e.g investments, work bonus’s
what is gross income?
money earned before deductions
what is net income?
money available after deductions have been made
what are some compulsory deductions?
income tax
PAYE
PRSI
USC
what are some voluntary deductions?
private health insurance
union subscriptions
saving schemes
loan repayments
define the P60
certificate issued by the employer stating the amount of tax paid by the employee at the end of the tax year
define the P45
A certificate stating the end of the employment with a particular employer. Used by new employer to ascertain how much tax they need to pay
Tax credits
tax reliefs are ducted from gross income to reduce the total amount of tax to be paid by a person
name the three types of pensions
personal pension
state pension
occupational pension
name the two types of state pensions
contributory pension
non-contributory pension
whats a state allowance
paid to people who have not made PRSI contributions and have not been working
whats a state benefit
paid to people who have paid PRSI contributions and have been working in the previous year
name some state allowances
- fuel allowance
- medical card
- free electricity
- free tv licence
- over 80 allowance
define household expenditure
the amount of money a family spends on a weekly/monthly basis
what is essential expenditure?
money spent on necessities
fixed expenditure
a set amount of money paid at a set date each week/month/year e.g mortgage, tv licence, electricity bills
irregular expenditure
varies in the amount to be paid and is not always paid on a specific date e.g doctors bills, petrol, clothing
Discretionary expenditure
irregular spending on luxury items or non-essentials
what is a budget
a fully customized weekly or monthly plan for spending money
list advanatges of budeting
provides for unexpected expenses
encourages both short and long term savings
reduced stress
prevents overspending
what does MABS stand for?
Money Advice Budgeting Service
what is mabs
community-based non-profit debt counselling orgabisation
helps develop money management skills
advises with immediate debt problems and can negotiate with creditors
