Money Management Flashcards
Planning a budget
Work out weekly or monthly income in one column
Make a list of expenditures and savings
Add totals and balance
If expenditure is greater you’re overspending
If income in bigger you can make savings
What is a budget
A plan for spending money
Budget system
Goal: to balance expenditure and income Resources: what you need to do something time money Plan: made to achieve goal Action: put plan into action Evaluation: was goal reached?
What is gross income
Total amount of money earned before deductions
What deductions are there
Income tax (PAYE pay as you earn)
Pay related social insurance (PRSI)- pays for be offs if employer gets sick or unable to work
Voluntary deductions eg health insurance
What is net income
Take home pay after deductions are made
What are tax credits
Taken from gross tax
Examples of expenses and saving
Rent or mortgage Food Travel Fuel and electricity Entertainment Clothes Toiletries Savings Extras like dentist
Why should a budget be flexible
As family situation might change
Advantages of budgeting
Maximum use is made of income
Overspending is highlighted
More security is provided so fewer financial worries
Good example set for children
Allowance is made for large bills and seasonal spending
What is buying on credit
Buy now, pay later
What shod you consider when choosing somewhere or save
Interest rates
Security
Ease of withdrawal
Incentives (attractive offers)
Forms of credit
Credit card
Loan from bank
Bank over draft
Hire purchase
Where can you save
Credit union
Bank
Post office
Advantages of saving
Interest is earned
Cheaper than buying in credit
No debt
Advantages of credit
Consumer can use item before its fully paid for
Larger item HAVE to be bought on credit eg house
Disadvantages of credit
Cost more because of interest
Encourages people to buy more than they can afford leading to debt
What is home filling
A home system useful for storing important documents such as recipe pets and guarantees
Advantages of home filing
Important document are stored saftely and found easily
Unpaid bills are easily found and paid on time
Spending patterns can be examined
Receipts and guarantees can are readily available if a problem should arise
