Expenditure Opportunity Cost n n Is making

Expenditure

Opportunity Cost n n Is making a decision/choice based on limited/scarce resources. The item not selected is the opportunity cost- opportunity foregone.

n n n Example I have € 2. 00. I can buy ice-cream or Pringles. I choose ice-cream. Opportunity cost = Pringles. Financial cost = € 2. 00

Impulse Buying n n n Buying on the spur of the moment. Without thinking or planning. Eg. We’re so cute! Buy us

False Economy n n n Buying something because it is cheap even when you don’t need it. Eg 2 for 1 BOGOF…. .

Fixed Expenditure n n Is money that is spent at the same time each week, month, year. The amount is usually the same.

Eg. n n n Mortgage Rent Loan repayments n n Insurance TV licence

Irregular Expenditure n n n § § The amount paid out varies. It is paid at different times. Eg. ESB, heating, petrol, phone Groceries School uniform & supplies Shoes & clothes………

Discretionary Expenditure n n n Is money you spend on things you can live without (luxuries) The amount varies. Eg. Sky tv, playstation, Wii, brand name clothes, holidays, Presents, entertainment, alcohol, cigs. .

Prioritising n n n If you have a limited income you must plan to spend. You must make sure you have enough for: Fixed expenditure first, Then irregular expenditure And finally only if you have money left can you afford discretionary expenditure.

If you have a deficit n n You must reduce Discretionary expenditure first.

Current Expenditure Revenue Expenditure Is spending money on day to day items. Eg. Food, drink, petrol, phone credit, n

Capital Expenditure n n n Is spending on durable items. Items that last a long time. Eg. Car, TV, house, furniture, Washing machine……

Calculating and ESB Bill Subtract present from previous meter reading. n Multiply by the rate per unit. n Add the standing charge (rental of equipment) n

ESB Meter Reading Present 6734 Previous 5890 No of units used Rate per unit Sub total Standing charge Total charge 844. 20 168. 80 10. 00 178. 00

ESB Meter Reading Present Previous No of units used Rate per unit 6534 -4850 X. 30 Sub total Add Standing charge Total charge +15. 00