Reasons for creating a budget Flashcards
What type of skills does a budget help individuals develop?
Good money management skills
How does a budget help individuals develop their money management skills?
By helping to identify total income and focusing spending on priority expenses
How does a budget make areas of overspending apparent?
As a budget requires the listing of all expenditure and the reviewing of receipts or bills
How does a budget avoid debt?
By making areas of overspending apparent
What can be avoided if areas of overspending are made apparent by a budget?
Debt can be avoided
What does budgeting reduce reliance on in order to pay for goods and services?
Credit cards
What is the affect of a reduced reliance on credit cards to pay for goods and services?
It helps to avoid debt
How does a reduced reliance on credit cards help to avoid debt?
As credit can incur high interest rates and repayment
What does a budget provide for individuals and families?
Provides financial security
How does a budget provide financial security?
As expenses such as bills will be paid which alleviates stress and worry
What does the saving element of a budget ensure?
It ensures that money is available to cover unplanned eventualities such as the loss of a job
How does a budget allow for unplanned eventualities?
Savings are made as part of a budget which cover unplanned eventualities
What does regular saving teach children?
It teaches children the value of money and money management skills
Outline the advantages for creating a budget
6 points
Money management skills
Areas of overspending become apparent
Reduced reliance on credit cards
Financial security
Allows for unplanned eventualities
Teaches children value of money and money management
