EMS self preparation for grade 7

1. Economics and
Management Science
Grade 7
By: Mr N Mboniswa
Financial literacy: Accounting concepts

2. Module outcomes
Fully understand the following:
 Personal income and expenses.
 Types of personal income
 Budgets.
 Savings.

3. Personal incomes and expenses
 Income is the money coming in and personal income is your own money that
you have earned or have been given.
 For example, some of the learners receive pocket money from their parents
and some learners have part-time jobs to earn money which they can
generally describe it as their personal income.
 Personal expenses are the things on which you spend money such as school
fees, food or rent.

4. Types of personal income
 FIXED INCOME includes the amounts that are received regularly by someone
such as salary.
 VARIABLE INCOME is an uncertain form of income.

5. Expenses
 Expenses is the money that goes out of your income or saving due to personal
use.
 Personal expenses
 These are regarded as things you spend money on for personal use.
 Many people live with debt, a debt basically means you owe someone money.
 Calculate late your personal expense by adding up the cost of everything you
buy.
 It is important for you to know how to control your money and limit your
expenses.
 Many people live in debt due to this (Discussed in SAVINGS)

6. Personal expenses…(continuation)
 Due to the inability to control their finances and end up overspending.
 They end up borrowing money from the bank or money lenders.
 Thus being in debt, this is an expense.

7. Questions
 Why do you think people overspend their money?
 Have you ever overspent money? And did you learn a lesson about it?

8. Savings and investments
 SAVINGS is spending less than you generally earn.
 Put a bit of it aside for rainy days.
 INVESTMENT is earning more income by making your money work for you.
 By this we mean maybe by putting your money in a new concept,
 A new spaza shop to sell snacks, by this you earn profit.
.

9. Three different types of investment.
 Pension: A portion of your monthly earnings is invested and when you retire
the pension fund pays you back in monthly instalments.
 Rentals: This is in form of property which is a good investment as it can be
rented out while earning and repaying the loan.
 It will provide an income once paid off.
 Fixed deposit savings account: This is for when you want to save money for a
fixed given period of time during which you cannot withdraw.
 The longer you wait, the higher the return.

10. Budgets
 It is a written plan that shows anticipated income and estimated expenses.
 For example the national budget (speech).

11. Activity
Column A Column B
1. Money spent for personal use. A. Expenses
2. Money one has saved through a bank/official
scheme
B. Income
3. Costs needed to live. C. Budget
4. Difference between revenue and costs. D. Personal expense
5. Estimate of income and expenditure for a set
time period.
E. Savings