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Chapter 03
Household Expenditure
Question | Answer |
---|---|
Expenditure def | The way people spend their income |
Three types of expenditure + definitions | Fixed: same amount spent on regular basis, eg mortgage Irregular: less regular basis, amount Varys, eg groceries Discretionary: spending on non essential items, eg holiday Capital: once off/long term, eg car Current: day-to-day spending, eg rent |
Guidelines to effective spending | Prepare a budget Prioritise expenditure Avoid impulse buying Beware of false economies Opportunity cost |
Solutions to overspending | Cut back on spending Postpone non essential spending Spend large payment over long period of time Extra income Savings/surplus money |
Cash flow def | Day to day money coming into or going out of a household |