Test 2 Flashcards
What is income
Income is money received by a person or household
What is expenditure
Expenditure refers to money a person spends
What is a household budget
A statement of income and expenditure for a period of time
What is deficit
When your planned income is less than your planned expenditure
What is surplus
When your planned income is grater than you planned expenditure
What is fixed expenditure
Money that you pay every month/year and is a fixed amount example mortgage and rent
What is irregular expenditure
Money that you received less regular and the money you spend changes each time example petrol and groceries
What is discretionary expenditure
Money spent on things you want and don’t need example holidays and sky TV
What is regular income
It’s money that you receive often and is the same amount each time example wages and child benefit
What is irregular income
Money that you receive less often and it’s a different amount each time example overtime and bonus
Name 3 examples of regular income for a household.
Wages, pension, child benefit
Name 3 examples of irregular income for a household
Overtime, bonus, windfall
Define the term benefit in kind
Non-money income in the form of benefits in kind,also known as ‘perks, may be received when the household is provided with goods or services that have a money value. For example,a company car
Define the term discretionary income
The income left over after taxes and essential spending on items such as the mortgage/rent is called discretionary income. You can choose how to spend it. Spending of discretionary income could be a family holiday or a trip to the cinema.
What is net pay
Net pay, also called take-home pay, is the amount left after all deductions from
gross pay have been made.
