(Eddie Hobbs Short Hands, Long Pockets Page 9) Expenditure So we have a choice, what to do with our income Money that we spend Money arrives without instructions. (Eddie Hobbs Short Hands, Long Pockets Page 9) Next Slide © Annie Patton

Aim of the Lesson To enable students to see what is meant by expenditure and to understand the different types of expenditure. Next Slide © Annie Patton Previous Slide

Income comes in Expenditure goes out Next Slide Previous Slide © Annie Patton Previous Slide

Is greater than or equal to Income comes in No problem if Income Is greater than or equal to expenditure Expenditure goes out Next Slide © Annie Patton Previous Slide

3 Types of Expenditure Fixed. There is no choice but to spend this money, if our circumstances are not to change. Examples are mortgage, rent. Irregular. We must spend some on these items, but the amount can vary. Examples are food, ESB, telephone bills. Discretionary. We have a choice to spend or not to spend on these items. Examples are entertainment, holidays, clothes. Next Slide © Annie Patton Previous Slide

Income and Expenditure No Problem if my income covers all these types of expenditure Next Slide © Annie Patton Previous Slide

How to control expenditure: Never buy just because you want something, you must also need it. Think before you buy. Think can you afford it. Shop around to check, if you can get a better bargain. Avoid convenience stores. Avoid the sales mentality. If I buy this item at €10, I will save €2, when in reality I did not really need the item and could have saved €10 BY NOT BUYING IT. I want I need I cannot make up my mind Next Slide © Annie Patton Previous Slide

Debt Control Click to learn how to control debt http://www.citibank.com/us/cards/cm/cntrol05.htm Next Slide © Annie Patton Previous Slide

Borrow or Save??? It is always better to save and then spend, but this is not always possible for example with such things as a car or a house. I am 20 and if I start saving, who knows I might or might not be able to afford this when I am 65, but I need a place to live right now. Next Slide © Annie Patton Previous Slide

Expensive to borrow and buy now To buy by cash or cheque, this car costs €30,000. Alternatively I can get a loan. Repayments over 3 years at €250 per week. 52 weeks in the year for 3 years total €39,000. Extra expense €9000, but I will have had the use of the car for the last 3 years. © Annie Patton Next Slide Previous Slide

How much you can borrow is determined by: So I cannot afford this house Your income. Do you have a full time job. The reason for the borrowing. Your savings record(s). The number of years you are likely to be in full time employment. So this will have to do in the meantime. Next Slide © Annie Patton Previous Slide

Regular and Irregular expenditure While a household’s monthly mortgage repayment is an example of Regular Expenditure. An example of Irregular expenditure for a household is their ESB bill. Next Slide © Annie Patton Previous Slide

Next Slide © Annie Patton Previous Slide

To have an ESB bill explained Click the following link: ESB Bill explanation http://www.esb.ie/main/energy_home/your_new_esb_bill.jsp?query=0 Next Slide © Annie Patton Previous Slide

ESB Bill Explanation The bill is issued every two months Standing charges. This is the money you have to pay for the privilege of the availability of electricity, even if none is used. E before the number of units means the meter was not actually read, but estimated based on previous readings. To calculate the number of units used subtract the previous meter reading from the present meter reading. Notice one has to pay a tax called VAT on their ESB bill. This is a tax payable on things one purchases. Notice you pay for the units used after they are used and the standing charge in advance. Next Slide © Annie Patton Previous Slide

Receipt This is the piece of paper one receives, when they buy goods or services. It acts as proof that the item or service was bought from that firm. It acts as proof of purchase when one is seeking after sales service. Next Slide © Annie Patton Previous Slide

What were the main points of the lesson??? Expenditure The End What were the main points of the lesson??? © Annie Patton Previous Slide