Expenditure Money that we spend So we have

Expenditure Money that we spend So we have a choice, what to do with our income Money arrives without instructions. (Eddie Hobbs Short Hands, Long Pockets Page 9) © Annie Patton Next Slide

Aim of the Lesson To enable students to see what is meant by expenditure and to understand the different types of expenditure. Previous Slide © Annie Patton Next Slide

Incomes in Expenditure goes out Previous Slide © Annie Patton Next Slide

Incomes in No problem if Income Is greater than or equal to expenditure Expenditure goes out Previous Slide © Annie Patton Next Slide

3 Types of Expenditure • Fixed. There is no choice but to spend this money, if our circumstances are not to change. Examples are mortgage, rent. • Irregular. We must spend some on these items, but the amount can vary. Examples are food, ESB, telephone bills. • Discretionary. We have a choice to spend or not to spend on these items. Examples are entertainment, holidays, clothes. Previous Slide © Annie Patton Next Slide

Income and Expenditure No Problem if my income covers all these types of expenditure Regular Expenditure Discretionary Expenditure Previous Slide Irregular Expenditure © Annie Patton Next Slide

How to control expenditure: • Never buy just because you want something, you must also need it. • Think before you buy. • Think can you afford it. • Shop around to check, if you can get a better bargain. • Avoid convenience stores. • Avoid the sales mentality. If I buy this item at € 10, I will save € 2, when in reality I did not really need the item and could have saved € 10 BY NOT BUYING IT. I want I need I cannot make up my mind Previous Slide © Annie Patton Next Slide

Debt Control Click to learn how to control debt http: //www. citibank. com/us/cards/cm/cntrol 05. htm Previous Slide © Annie Patton Next Slide

Borrow or Save? ? ? It is always better to save and then spend, but this is not always possible for example with such things as a car or a house. I am 20 and if I start saving, who knows I might or might not be able to afford this when I am 65, but I need a place to live right now. Previous Slide © Annie Patton Next Slide

Expensive to borrow and buy now To buy by cash or cheque, this car costs € 30, 000. Alternatively I can get a loan. Repayments over 3 years at € 250 per week. 52 weeks in the year for 3 years total € 39, 000. Extra expense € 9000, but I will have had the use of the car for the last 3 years. Previous Slide © Annie Patton Next Slide

How much you can borrow is determined by: So I cannot afford this house So this will have to do in the meantime. Previous Slide • Your income. • Do you have a full time job. • The reason for the borrowing. • Your savings record(s). • The number of years you are likely to be in full time employment. © Annie Patton Next Slide

Regular and Irregular expenditure While a household’s monthly mortgage repayment is an example of Regular Expenditure. An example of Irregular expenditure for a household is their ESB bill. Previous Slide © Annie Patton Next Slide

Previous Slide © Annie Patton Next Slide

To have an ESB bill explained Click the following link: ESB Bill explanation http: //www. esb. ie/main/energy_home/your_new_esb_bill. jsp? query=0 Previous Slide © Annie Patton Next Slide

ESB Bill Explanation • The bill is issued every two months • Standing charges. This is the money you have to pay for the privilege of the availability of electricity, even if none is used. • E before the number of units means the meter was not actually read, but estimated based on previous readings. • To calculate the number of units used subtract the previous meter reading from the present meter reading. • Notice one has to pay a tax called VAT on their ESB bill. This is a tax payable on things one purchases. • Notice you pay for the units used after they are used and the standing charge in advance. Previous Slide © Annie Patton Next Slide

Receipt • This is the piece of paper one receives, when they buy goods or services. • It acts as proof that the item or service was bought from that firm. • It acts as proof of purchase when one is seeking after sales service. Previous Slide © Annie Patton Next Slide

Expenditure The End What were the main points of the lesson? ? ? Previous Slide © Annie Patton