budgets introduction © donal enright 2008 in association with teachnet

Budgets IntroductionBudgets Introduction

© Donal Enright 2008 in association with Teachnet

BudgetsBudgetsBudgets are a financial plan for the future

Budgets can be divided into two main sections:

•Income – Money that comes in•Expenditure – Money we spend

IncomeIncomeSamples of Household Income:

Wages or payChild BenefitSocial WelfareInterest from investmentsPrize money

ExpenditureExpenditureThere are three types of expenditure:

Fixed ExpenditureIrregular ExpenditureDiscretionary Expenditure

FixedFixedExpenditureExpenditure

Fixed Expenditure is money a household must payMortgageHouse Insurance/ Car InsuranceLoans/ BorrowingsCar TaxCrèche Fees

IrregularIrregularExpenditureExpenditure

Similar to Fixed but the amount changes each monthFoodLight/ HeatingSchool ExpensesPetrol/ DieselTravelClothes

DiscretionaryDiscretionaryExpenditureExpenditure

One has a choice about these expenses (wants not needs)HolidaysEntertainmentDecoratingTV – Cable etcNew Clothes (fashion items)