Topic 9 Flashcards
What is a budget
A budget is a financial plan that shows a person’s income and expenditure for a defined period of time
What is a cash flow forecast useful for
People can use cash flow forecasting to predict incoming and outgoing over several time periods
When irregular income will be recieved such as from self employment
When unusually large payments must be made
Options for how to finance short term deficits
When they might have surpluses they can use it to save or make larger repayments on debts if possible
Why do people find it difficult to move from renting a home to buying one
Wages are static or failing in real terms
Essential expenses are rising saving interest rates are very low
Prospective home buyers need large deposits before they can borrow money on a mortgage and providers are lending less money than they used to
What are the different types of expenditure
Mandatory essential and discretionary
