Why plan expenditure/ why budget Flashcards
1
Q
Avoid
A
to avoid overspending/ getting into debt
2
Q
credit
A
it can affect your credit score
3
Q
declare
A
you may have to declare bankruptcy if debts aren’t paid
4
Q
generate
A
savings can generate future income from interest payments (compound interest)
5
Q
net
A
savings help to provide a safety net
6
Q
fund
A
savings can be used to fund future purchasing
7
Q
counter
A
counter the effects of inflation
8
Q
set
A
set financial targets and goals
9
Q
remain
A
remain solvent
10
Q
legal
A
avoid legal action and/or repossession
11
Q
maintain
A
maintain a good credit rating
12
Q
what are the benefits of planning expenditure
A
- it helps you to get rid/payoff your debt faster
- helps to start planning for retirement
- It gives you peace of mind as you see how much you are spending and how much is coming in
13
Q
what are the drawbacks of planning expenditure
A
- Time consuming
- Could be difficult to tell what plan is right for your income and future plans
- Reduces the amount of money that you can spend now
