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CHAPTER 1 BUDGETS: HOUSEHOLD INCOME

CHAPTER 1 BUDGETS: HOUSEHOLD INCOME. A budget is a plan that matches expected spending with expected income over a period of time. 2. Budgets. Importance of Budgets. Budgets balance expected income with expected spending Budgets reduce the risk of impulse buying (unplanned spending)

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CHAPTER 1 BUDGETS: HOUSEHOLD INCOME

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  1. CHAPTER 1 BUDGETS: HOUSEHOLD INCOME

  2. A budget is a plan that matches expected spending with expected income over a period of time. 2 Budgets

  3. Importance of Budgets Budgets balance expected income with expected spending Budgets reduce the risk of impulse buying (unplanned spending) Budgets help to avoid unaffordable debt Budgets allow us to set aside money for a rainy day, i.e. to have money available for any unforeseen expenses that may arise

  4. Income Income is the money, goods or services a household receives This can be regular income that is received every week or month, e.g. wages or pension It can be irregular income, i.e. extra occasional income that may be received, e.g. overtime It can be Benefit-In-Kind, i.e. non-money income

  5. GROSS PAY AND NET PAY Gross pay is the total income earned. Example: You work 40 hours in a week at €10 per hour. Your gross pay is €400. You don’t receive all of this as some money is deducted from it by the employer. Net pay is the gross pay minus the deductions.

  6. DEDUCTIONS FROM WAGES Statutory deductions are deductions that must, by law, be taken from gross wages, e.g. PAYE and PRSI (USC) Voluntary deductions are sums of money taken from the gross wage at the instruction of the employee, e.g. health insurance and trade union membership fees

  7. Wage Slip A wage slip (or pay slip) is a written explanation of the calculation of an employee’s net pay. 22/10/2010 WAGE SLIP MARY MURPHY WEEK 42 Pay € Deductions € Basic 800 PAYE 125 Overtime 300 PRSI (USC) 52 VHI 30 Savings plan 23 Net Pay Gross pay 1,100 Total deductions 230 870

  8. Filing Filing is a method of storing documents so that they can be easy to find in future. The documents can be sorted alphabetically, numerically, in date order or by address. Documents are stored in a file. This can be a folder, drawer, cabinet or manila expanding file with different compartments. and

  9. SIMPLE RECORDING OF INCOME A record should be kept of all income received. Each source of income is added together for the six months to give the total for January to June. One line only demonstrated here All sources of income are added together each month to show the total income for that month. One line only demonstrated here Curran family regular and irregular income for six months Total Jan- June Income Jan Feb March April May June J. Curran -- Salary €2,500 €2,500 €2,500 €2,500 €2,500 €2,500 €15,000 B. Curran -- Salary €1,600 €1,600 €1,600 €1,600 €1,600 €1,600 €9,600 Child benefit €270 €270 €270 €270 €270 €270 €1,620 Overtime €300 €200 €500 TOTAL INCOME €4,370 €4,670 €4,370 €4,370 €4,570 €4,370 €28,220

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