Chapter 3 - Household Expenditure

Question 1

What is fixed expenditure?

Answer 1

Money spent on a regular basis , the amount does not depend on how often we use the item e.g. mortgage

Question 2

What is irregular expenditure ?

Answer 2

Money spent on a regular basis the amount of which does vary and depends on the amount of the item we use e.g. electricity bill

Question 3

What is discretionary expenditure ?

Answer 3

Money spent on non-essential items , only buys of we have money left over after we have set aside enough money to pay all our important bills e.g. holidays

Question 4

What is impulse buying?

Answer 4

Buying something on the spur of the moment without thinking of the consequences

Question 5

What is false economy ?

Answer 5

Buying something that coast less but turns out to be more expensive in the long run (e.g. buying a cheap battery that cost 50c and only last for 3 hours instead of a better brand of battery that costs 1euro and lasts 10 hours)

Question 7

What do you do if you are dealing with overspending/budget deficits ?

Answer 7

-try to earn some additional income by working overtime
- reduce or cut out some of the discretionary expenditure, such as entertainment, holidays
- find cheaper alternatives to our current bills, e.g use unbranded food products instead of well known brand names (reduce irregular expenditure)

Question 8

What does current expenditure mean?

Answer 8

Spending that is continuous and regular e.g. groceries

Question 9

What does capital expenditure mean?

Answer 9

Spending on items that will last a long time or once-off spending e.g.a new car