Income & expenditure ppt

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Income & expenditure ppt

  1. 1. Household BudgetingIncome & Expenditure Ms O Brien Chanel College
  2. 2. A Budget:is a financial plan that shows expected income and expenditure over a certain time period. Why budget?...... Ms O Brien Chanel College
  3. 3. 1. To ensure money is available to cover costs2. Reduce risk of impulse buying3. Avoid build up of debt4. Money for a ‘rainy day’ Ms O Brien Chanel College
  4. 4. What is Income?It is money or a benefit in kind you receive 1. Regular 2. Irregular (additional) 3. Benefit-in-Kind Ms O Brien Chanel College
  5. 5. 1. Regular Income:Is what you are sure of receivingYou can plan to spend itE.G. Wages/ Salary/Child Benefit Ms O Brien Chanel College
  6. 6. 2. Irregular Income:Is what you are not sure of receivingYou cannot plan to spend itE.G. Bonus / Lotto Win/ Tax Rebate Ms O Brien Chanel College
  7. 7. 3. Benefit- in –Kind:Non money income received for work doneIncentive to work hardBoosts employee morale Ms O Brien Chanel College
  8. 8. Place Incomes under correct headingsRegular Benefit in Kind Irregular Wages Overtime Interest Pension DividendSalary Lotto win Gift Car Social Welfare Benefit MobileBonus Commission Tax refund Club Membership Ms O Brien Chanel College
  9. 9. Wages Is regular income for worked or number of goods produced. E.g. BuilderSalary Is regular income received for doing a job no matter how many hours you spend at it. E.g. Teacher * Min wage €6.06 Ms O Brien Chanel College
  10. 10. Types of Employee Income1. Time Rate: Getting paid per hours worked2. Piece Rate: Getting paid per number of products produced. Which would you prefer?....
  11. 11. CommissionAdditional income calculated as apercentage of sales.ExampleMary works in . She earns5% commission on every euro worth ofclothes she sells.How much does she earn for selling €200worth?
  12. 12. Solution 200 X 5 100 = €10 Commission Ms O Brien Chanel College
  13. 13. Basic WageRegular weekly payment for normal hoursworkedExample: €10 per hour x 30 hrs = €300 I love my job..
  14. 14. OvertimeAdditional payment for working over yournormal hoursExample:Ben gets €10 per hour working in a petrol station. On Saturday he worked two hours overtime on time and a half. How much did he receive for overtime?
  15. 15. Solution:1 hour = € 1010 = € 5 2 € 10 + € 5 = € 15 per hour overtime 2 hours x € 15 = € 30 for overtime
  16. 16. Example• Mary receives €20/hr for a normal 30 hour week and double time for overtime.• How much does she earn for a 32 hour week? Ms O Brien Chanel College
  17. 17. Answer• Basic Pay= 30 hours x € 20 = €600• Overtime = 2 x (€20 x 2) = € 80• Total €680 Ms O Brien Chanel College
  18. 18. Gross Wage Basic Wage + Overtime before deductions Ms O Brien Chanel College
  19. 19. Net Wage(Take Home Pay) Basic pay + overtime after deductions Ms O Brien Chanel College
  20. 20. Deductions: Voluntary Involuntary (Choice) (Compulsory) Pension PAYE Medical Insurance PRSI Savings Universal Social Contribution Trade Union Fees Ms O Brien Chanel College
  21. 21. Statutory Deductions:PAYE – Pay as you Earn- 32800 @ 20%- Anything over @ 41%- Used by government to invest in ServicesExample: Health Care Ms O Brien Chanel College
  22. 22. Statutory Deductions:PRSI: Pay Related Social InsuranceCollected as a contribution by the employee towards social welfare benefitsExample: Old age Pension Unemployment benefit Ms O Brien Chanel College
  23. 23. Wage slipBasic hourly wage: is what you get for every hour workedOvertime: is what you receive for any extra hours you work Basic  Basic hourly wage €10 Per HourNo of hours worked 6 HoursTotal wages receivedOver time  Basic wage plus time and ahalfNo of hours worked 3 HoursTotal Overtime wagesreceivedGross wage Ms O Brien Chanel College
  24. 24. Budgets Workbook pg 2 Q10 Jan Feb Mar April May June TotalJoe 2300 2300 2600 2550 2300 2300Mary 2800 2800 2800 3600 2800 2800Child 240 240 240 240 240 240BenIntere - - - - - 560stTotalIncome Ms O Brien Chanel College
  25. 25. ExpenditureFixed: Spending money on goods and servicesregularly. Amount does not vary.Irregular: Spending money on goods and servicesregularly But the amount spent varies.Discretionary: Spending money on things we wantbut do not need
  26. 26. ExpenditureFixed Irregular DiscretionaryRent Car running costs PresentsMortgage Phone bills HolidayInsurance Groceries Entertainment Clothes Magazine Ms O Brien Chanel College
  27. 27. Current Expenditure: Spending moneyon day-to-day itemsCapital Expenditure: Spending moneyon durable items for long term usage Ms O Brien Chanel College
  28. 28. Opportunity Cost The item we do without when we have to make a choice between two or more actions Ms O Brien Chanel College
  29. 29. Opportunity CostYou have €50 to spend .You can buy a ticket to go and see aor you can buy 5 video games.What is your decision?
  30. 30. Impulse Buying “Buying without thinking” Ms O Brien Chanel College
  31. 31. When w as the last tim e you boughtsometh ing on impulse ?
  32. 32. False Economy Buying something because it ischeap but in the long run costs you more… Ms O Brien Chanel College
  33. 33. False Economy She only cost a euro dad and she is going to have puppies! Discuss
  34. 34. Reading Electricity Bills Present 6734 Previous 5890 No of units used 844 Rate per unit .20 Sub total 168.80 Standing charge 10.00 Total charge Ms O Brien Chanel College 178.80
  35. 35. E.G. Question ESB Meter Reading Present 6534 Previous -4850 No of units used Rate per unit X.30 Sub total Add Standing charge +15.00 Total charge Ms O Brien Chanel College
  36. 36. E.G. Question ESB Meter ReadingPresent 3436Previous 2916No of units usedRate per unit .15Sub totalAdd Standing charge 16.20SubtotalVat @13.5%Total owed Ms O Brien Chanel College
  37. 37. Budgets Net CashTotal Income – Total Expenditure Ms O Brien Chanel College
  38. 38. Net Cash Here’s €10 pocket money If I have €10 income and I spend €7 on a newThanks football I will have net cash of €3!
  39. 39. Opening CashMoney available at the start of themonth(Brought forward from the previousmonth)Money in bank Ms O Brien Chanel College
  40. 40. Net Cash + Opening Cash= Closing CashMoney left over at the end of themonth Surplus Deficit Ms O Brien Chanel College
  41. 41. ActivityBudgeting Tool
  42. 42. Workbook page 11 Q2 Jan Feb Mar Apr TotalTotal 1850 2280 3170 1740 9040ExpenditureNet Cash (230) (660) (1550) (120) (2560)Opening cash 900 900Closing cash 670 Ms O Brien Chanel College
  43. 43. Workbook page 15 Q4 Jan Feb Mar Apr TotalTotal 2850 3960 3690 4470 14970ExpenditureNet Cash 1130 20 540 (290) 1400Opening 1000 2130 2150 2690 1000cashClosing cash 2130 2150 2690 2400 2400 Ms O Brien Chanel College
  44. 44. Workbook page 17 Q5 Jan Feb Mar Apr TotalTotal 4495 2880 2920 4980 15275ExpenditureNet Cash 1655 2270 2530 320 6775Opening 495+ 2150+ 4420+ 6950+ 495+cashClosing cash =2150 =4420 =6950 =7270 = 7270 Ms O Brien Chanel College

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