chapter 2. expenditure is money that goes out of the household or business we must plan for what...
TRANSCRIPT
Household Expenditure
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
What is expenditure?
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
Discretionary Expenditure This is expenditure on once off or luxury
items eg. Holidays, Cd’s, Designer Clothes
Types of Expenditure
State whether the following are Fixed/Irregular/Discretionary
Capital Expenditure This is expenditure on long term
items/assets such as roads, hospitals, schools (things that last a long time)
Categories of Expenditure
Current Expenditure This is expenditure on day-to-day items (ie.
Things that last a short time). Eg. Food, petrol, wages
Categories of Expenditure
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
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
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
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