Planning expenditure

Question 1

Whys it impotent to plan expenditure?

Answer 1

To avoid getting into financial difficulty’s such as.

• Debt
• Bankruptcy
• Good credit score
• Remain solvent

Question 2

Benafits of planning.

Answer 2

• A good credit score, means you will be able to borrow money for a car or mortgage.
• Money not spent on essentials can be saved and earn interest to generate an income.
• Savings can be used to fund purchases or be able to pay for unexpected expenses.

Question 3

Risks of not planning.

Answer 3

• Getting into debt because you cannot pay bills
• Having insufficient funds to pay loan repayments.
• Having legal action taken against you for non-payment of loans or loosing goods that you are unable to pay for.
• Poor credit rating, lowing chances of borrowing money.
• Not being able to save for the future.