1. Household Budget

2. What is a budget ?
It is a plan of future income & expenditure.

3. Who needs to budget ?
Households
Students
Government
Business

4. Why are budgets needed ? To ensure the best use of money.
To live within your means
(not overspend)
To highlight areas of overspending.
To see if you will have savings.

5. Budget Surplus Planned Income > Planned Expenditure 500 > 300
>
200 left
Surplus

6. What can be done with a surplus budget?
Pay off loans (debt)
Increase spending
Save

7. Deficit Budget Planned Income < Planned Expenditure 200 < 300
<
0verspent by 100
deficit

8. How can a deficit be reduced
Increase income, work overtime..
Reduce spending especially discretionary.
Spread out payments over the year.
Get a bank overdraft.

9. What is a bank overdraft?
It is a short term loan.
The bank gives you permission to spend more than you have in you account.
You must pay it back within one year.
Interest is charged.

10. What is saving?
It is putting aside income & spending at a future date.

11. Why do people save? For children’s education To go on holiday
To buy a car
For emergencies