Chapter 3 - Household Budgeting Flashcards
1
Q
What is a budget?
A
A budget is a plan of our expected income and expenditure for a particular period
2
Q
What is budgeting?
A
Budgeting is the process of matching our expected income with our expected expenditure
3
Q
What are the reasons for budgeting?
A
- make sure we can pay our bills
- show us how much money we have for discretionary spending
- show us the months in which we will have a lot of bills
4
Q
What is our net cash?
A
Net cash = total income - total expenditure
5
Q
How can we deal with a budget deficit?
A
- work overtime
- spread annual bills over months
- pay certain bills in different months
- cut unnecessary bills e.g. Entertainment
- find cheaper alternatives e.g. Unbranded food
6
Q
What does unbranded mean?
A
Goods that arent made by a well known manufacturer are said to be unbranded
7
Q
What is a budget surplus?
A
When expected income is greater than expected expenditure
8
Q
What is a budget deficit?
A
A budget deficit is when our expected income is less than our expected expenditure
