Chapter 2.  Expenditure is money that goes out of the household or business  We must plan for what money we have to spend to make sure we have enough.

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Presentation transcript:

Chapter 2

 Expenditure is money that goes out of the household or business  We must plan for what money we have to spend to make sure we have enough

 Fixed Expenditure  This is expenditure that stays the same every month eg. Rent, Mortgage, Loan Repayments, Milk bill  Irregular Expenditure  This is expenditure that changes every month eg. ESB, Telephone, Gas bills. .

 Discretionary Expenditure  This is expenditure on once off or luxury items eg. Holidays, Cd’s, Designer Clothes

 Capital Expenditure  This is expenditure on long term items/assets such as roads, hospitals, schools (things that last a long time)

 Current Expenditure  This is expenditure on day-to-day items (ie. Things that last a short time). Eg. Food, petrol, wages

 This is when you buy goods that you did not plan too. Buy on the spur of the moment  Eg. You go into a shop to buy a paper and come out with a drink and bar of chocolate

 This is the cost of the item you did not buy.  Eg, you have a choice between an apple and an orange, they both cost €1 each but you only have €1, so you buy the orange. The opportunity cost is the cost of the apple. VS

 This is when you buy something that appears to be better value  Eg. School bag in Pound Shop for €5 V’s Brown Thomas €10. The cheaper bag appears better value but is ‘probably’ poorer quality.

 This is when you pay for something after you have used it.  Eg, the telephone, you don’t pay for each call after you make it, you get the bill at the end of every two months.