The document discusses different types of expenditures including fixed, irregular, and discretionary expenditures which are necessary versus optional spending. It also defines related financial concepts like opportunity costs, accruals, false economies, and impulse buying which involve trade-offs in personal finance decisions. Types of expenditures are categorized as current versus capital depending on whether they are regular daily costs or long-term investments.

1. Expenditure
Expenditure is money going out of the house. E.g. Food, petrol, telephone & ESB
bill.
Opportunity cost is where you do without something to buy something else.
E.g. If you go into a shop with only €1. You can buy either a bar of chocolate for €1
or an orange for €1. If you buy the bar with the €1 you must do without the orange –
the orange is the opportunity cost.
Accruals are items you pay for after using them. E.g. You use the electricity to
watch T.V. but you don’t pay for it until the end of the following month after the
Airtricity bill arrives.
• A standing charge is a fixed cost you have to pay. E.g. You must pay a standing
charge for having electricity or house phone - even if you don’t use them.
False Economy is where you buy something that appears to save you money but
actually costs you more in the long run. E.g. You go into a shop to buy a packet of
rashers. You can buy one packet for €2 or two packets for €3. You buy the two
packets for €3, but you never use the second packet and throw it out. So instead of
saving money you ended up spending more in the long run.
Impulse Buying is buying something on the spur of the moment – buying something
you didn’t plan to buy. E.g. You go into the shop to buy a magazine but also get a
packet of crisps when you are paying for the magazine.
Types of Expenditure
Fixed Expenditure is money you have to spend. It is spent on bills which have to be
paid regularly (eg. Weekly, monthly, annually) and you usually know the amounts in
advance (before-hand). The amount stays the same. E.g. mortgage repayments and
annual car insurance.
Irregular Expenditure is money you have to spend. It is spent on bills where the
amounts or time of payment varies. E.g. Airtricity bill – you know when you will have
to pay it, but the amount can vary or you know how much phone credit for your
mobile costs but you don’t know when you will have to buy it.
Discretionary Expenditure is money you choose to spend. It is spent on luxuries
like entertainment and holidays. People spend most of their money on necessities
like food and any extra money can be spent on discretionary expenditure.
(Discretionary expenditure is the first to be cut if you haven’t enough money).
Current Expenditure is money spent on day-to-day items. E.g. food and clothes.
Capital Expenditure is money spent on things which will last a long time. E.g. house
or car.

2. Page 17 – Q2
Dr.
Date
Analysed Cash Account
Details Fo. Bank
No.
1st Dec
Balance
b/d
2nd Dec Wages
Date
Details
€
Fo.
No.
70 7th Dec
800 9th Dec
Petrol
Cq. 50
Supermarket ATM
Cr.
Bank Food Car Entertainment
€
30
110
30
110
14th Dec
15th Dec
Petrol
Cq. 52
30
30
Supermarket Cq. 53
120
Petrol
Cq. 54
30
30
29th Dec
Car Service
Cq. 55
120
120
30th Dec
385
30
28th Dec
1st Jan
30
15
23rd Dec
Balance
b/d
Cq. 51
ATM
21st Dec
870
Petrol
Cinema
Balance c/d
15
120
385
870
230
240
15

4. Page 18 – Q3
Dr.
Date
Details
Fo. Bank
No.
1st Jan Balance b/d
3rd Jan Wages
1st Feb Balance b/d
Cash Account
Date
Details
€
80 8th Jan
Train
Supermarke
2000 9th Jan t
13th Jan Train
16th Jan Clothes
22nd
Jan
Train
Supermarke
26th Jan t
29th Jan Train
30th Jan Rent
31st Jan Balance c/d
2080
1045
Fo.
No.
Cr.
Bank Food Travel Other
€
Cq. 59
15
Cq. 60
Cq. 61
ATM
40
15
80
Cq. 62
15
ATM
Cq. 63
ATM
55
15
800
1045
2080
15
40
15
80
15
55
15
800
95
60
880