chapter 2. expenditure is money that goes out of the household or business we must plan for what...
TRANSCRIPT
![Page 1: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/1.jpg)
Household Expenditure
Chapter 2
![Page 2: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/2.jpg)
![Page 3: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/3.jpg)
Expenditure is money that goes out of the household or business
We must plan for what money we have to spend to make sure we have enough
What is expenditure?
![Page 4: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/4.jpg)
Fixed Expenditure This is expenditure that stays the same
every month eg. Rent, Mortgage, Loan Repayments, Milk bill
Irregular Expenditure This is expenditure that changes every
month eg. ESB, Telephone, Gas bills.
.
Types of Expenditure
![Page 5: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/5.jpg)
Discretionary Expenditure This is expenditure on once off or luxury
items eg. Holidays, Cd’s, Designer Clothes
Types of Expenditure
![Page 6: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/6.jpg)
State whether the following are Fixed/Irregular/Discretionary
![Page 7: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/7.jpg)
![Page 8: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/8.jpg)
Capital Expenditure This is expenditure on long term
items/assets such as roads, hospitals, schools (things that last a long time)
Categories of Expenditure
![Page 9: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/9.jpg)
Current Expenditure This is expenditure on day-to-day items (ie.
Things that last a short time). Eg. Food, petrol, wages
Categories of Expenditure
![Page 10: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/10.jpg)
This is when you buy goods that you did not plan too. Buy on the spur of the moment
Eg. You go into a shop to buy a paper and come out with a drink and bar of chocolate
Impulse Buying
![Page 11: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/11.jpg)
This is the cost of the item you did not buy. Eg, you have a choice between an apple
and an orange, they both cost €1 each but you only have €1, so you buy the orange. The opportunity cost is the cost of the apple.
Opportunity Cost
VS
![Page 12: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/12.jpg)
This is when you buy something that appears to be better value
Eg. School bag in Pound Shop for €5 V’s Brown Thomas €10. The cheaper bag appears better value but is ‘probably’ poorer quality.
False Economies
![Page 13: Chapter 2. Expenditure is money that goes out of the household or business We must plan for what money we have to spend to make sure we have enough](https://reader036.vdocument.in/reader036/viewer/2022062408/56649edb5503460f94beafba/html5/thumbnails/13.jpg)
This is when you pay for something after you have used it.
Eg, the telephone, you don’t pay for each call after you make it, you get the bill at the end of every two months.
Accruals