Home Economics - Money Management

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Home Economics - Money Management
2013-03-15 17:58:18
Money Management

Money Management
Show Answers:

  1. What is money management?
    This is planning our spending wisely so that we have enough for our needs and avoid debts
  2. What is a budget?
    This is a plan for spending and saving
  3. 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
  4. List two common sources of household income
    Earnings from employment

    State benefits
  5. Give two examples of essential household expenditure

  6. What is meant by gross income?
    This is total earnings before deductions
  7. List three statutory deductions that must be paid from income
    Income tax (PAYE)


    Income levy

    Pension levy
  8. 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
  9. What are tax credits?
    Everybody gets a number of tax credits every year and it reduces your gross tax to make your net tax
  10. Name two voluntary deductions a person may decide to take from their income
    Health insurance

    Savings plan

    Pension plan
  11. 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
  12. What are the advantages of saving for an item rather than getting it on credit?
    Earn interest

    No risk of getting into debt
  13. Name three places where you can save money
    Credit union

    Building society

    Post office
  14. 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?
  15. 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
  16. Name different sources of consumer credit
    Credit cards

    Bank loan

    Bank overdraft

    Hire purchase