Expenditure

Question 1

Why plan expenditure?

Answer 1

• control cost
• avoid bankruptcy
• avoid getting into debts
• maintain a good credit rating
• counter effects of inflation
• set a financial targets and goals

Question 2

Benefits of planning expenditure

Answer 2

• good credit rating means that you can borrow money to fund a large purchase such as a car or your home
• money not spent on essentials can be saved and earn interest to generate an income

Question 3

Risk of not planning expenditure

Answer 3

• a poor credit rating which will affect your ability to borrow money
• getting into debts because you cannot pays bills
• not being able to save for the future