Home Economics - Money Management
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What is money management?
This is planning our spending wisely so that we have enough for our needs and avoid debts
What is a budget?
This is a plan for spending and saving
Describe the money management process
1. Identify goal or aim
2. Identify resources eg. money, energy, time
3. Plan - draw up a budget by balancing income and spending
4. Action - put your budget into action
5. Evaluate the budget
List two common sources of household income
Earnings from employment
Give two examples of essential household expenditure
What is meant by gross income?
This is total earnings before deductions
List three statutory deductions that must be paid from income
Income tax (PAYE)
What is pay related social insurance (PRSI)?
This is a percentage of your gross income that pays for benefits when you are ill or out of work
What are tax credits?
Everybody gets a number of tax credits every year and it reduces your gross tax to make your net tax
Name two voluntary deductions a person may decide to take from their income
List the advantages of budgeting
1. Less financial worry
2. Less likely to overspend
3. Sets good example for children
4. Money can be set aside for major bills
What are the advantages of saving for an item rather than getting it on credit?
No risk of getting into debt
Name three places where you can save money
List the factors that you would consider before deciding on a place to save your money
Who offers the highest rate of interest?
Do they offfer no bank charges?
How easy is it to lodge and withdraw money?
What is the difference between a deposit and current account?
A deposit account will earn interest whereas current account does not
Bills can be paid by direct debit from current account but not from a deposit account
Name different sources of consumer credit
What would you like to do?
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