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Flashcards in Money Management Deck (15)
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System when planning a budget

Balance income and expenditure
Use a management system
Decide on your needs and wants
Give priority to needs
Evaluate the needs and wants
Take note of changes to be made


Steps on planning a budget

Work out your weekly or monthly income In one column
Make a list of your weekly or monthly expenditures and savings in another column
Add the totals in each columnand balance your budget
If expenditure is greater than income you're overspending
If income is greater than expenditure extra savings may be made


Income tax PAYE

This is taken automatically by your employer from gross income tax is used to pay for state services


PRSI(Pay Related Social Insurance)

This pays for benefits if you become unemployed or unabled to work due to an illness or injury


Voluntary deductions

These include health insurance pension schemes and savings


Tax credits

This is part of a person's income that is not taxed by the government gross tax is calculated and then the tax credits are deducted from this to give the net tax


Advantages of budgeting

Maximum use is made of income
Overspending is highlighted
More security is provided - fewer financial worries
Good example is set for kids
Allowance is made for large bills and seasonal spending


Points to consider when saving

Interest rates
Ease of withdrawal


Where to save

Credit unions
Post office


Advantages of saving

Interest earned
It is often cheaper to pay for an item with money saved rather than buying on credit
There is no debt


Advantages of credit

Consumer has the use of the item before it is fully paid for
Some large items cannot be bought without credit as it would take too long to save for them e.g houses, cars



A plan for spending money


Disadvantages of credit

Credit costs more as interest is charged
Credit encourages consumers to buy more than they can afford which can lead to serious debt


The household filing system

Is useful for organising, storing, checking and monitoring important documents


Advantages of the household filing

Important documents are stored safely and can be found easily
Unpaid bills are easily found and can be paid in time
Spending patterns can be examined
Receipts and guarantees are readily available if a problem should arise
School progress can be monitored