Household Income
1. Define Income
2. Define Employment
1. Money Received by a person or coming into a household
2. Doing work for payment
1. Define Employee
2. Define Employer
1. People who work for employers in return for payments
2. People who pay others to work for them
What do these words have in common?
Company car, Company phone, Free parking at work, free food at work, health insurance which is paid by an employer
These are all examples of BIK - Benefits in Kind!
What is expenditure?
Expenditure refers to the way people spend their income to satisfy various needs and wants
Give 3 examples of Fixed Expenditure
Mortgage Repayments
Rent
TV LicenceInsurance Costs
Give two examples:
1. An example of regular income
2. An example of irregular income
1. Wages, salaries, child benefit, pensions, Jobseeker's Benefit
2. Overtime (for working extra hours), Bonus (reward for meeting work targets), Windfall (unexpected income)
Explain the difference between a salary and a wage
A salary is a fixed annual payment made to an employee for an agreed amount of work. A wage is a payment received for work done based on work completed or on the amount of time spent working.
Name three examples of statutory deductions
PAYE (Pay as you Earn)
PRSI (Pay Related Social Insurance)
USC (Universal Social Charge)
What is discretionary expenditure? Give three examples as a group!
Spending on non-essential items that we choose to buy
--> Entertainment | Holidays | Gifts | Expensive Items e.g. cars, furniture, household electronics
--> Premium sports channels / streaming services
e.g. Netflix / Disney Plus / Hulu
Give three examples of irregular expenditure
Grocercies
Clothing , Light & Heat
Waste & Recycling charges, Repairs
Telephone Bills, Education Costs
Compare and contrast time rate and piece rate
Time rate: wages based on number of hours worked vs piece rate: wages are based on number of items completed
Explain the difference between Gross Pay vs Net Pay
Gross Pay: is the total pay before any deductions
Net Pay: is the amount left after all deductions from gross pay have been made (take-home pay)
Name Three Voluntary Deductions
Pension
Savings
Loan Repayments
Private Health Insurance
Trade Union Membership
Define Current expenditure
Current Expenditure is repeated or ongoing short-term spending
What is impulse buying?
Impulse buying is when we buy things in an unplanned way or in the spur of the moment
Disposable vs discretionary income
Disposable income is income left after all taxes have been paid
Discretionary Income is income left over after taxes and essential spending
What is a payslip?
By law, employers must provide employees with a payslip either electronically or on paper to show how much they have earned and how much money has been deducted.
Fixed vs Irregular Expenditure - Explain!
Fixed Expenditure means that the amount spent does not change with usage
Irregular Expenditure is spending where the amount changes with usage
Define Capital Expenditure
Capital expenditure is once-off or long-term spending
What is a false economy?
A false economy is a purchase that appears to be good value for money but in the long term turns out to be more expensive or poor value for money!
What is the minimum wage?
The minimum wage is the lowest hourly rate an employer must pay an employee by law
What is the living wage?
The living wage is the lowest hourly rate an employee needs to earn in order to have a basic but acceptable standard of living.
Can both income and expenditure be recorded in an analysed cash book?
Yes they can!
Explain opportunity cost
Opportunity cost is measured in terms of the 'next best thing' we could have done with our money. When we decide to use our money for one particular purpose we lose the chance (opportunity) to do something else with that money.
Suggest 3 solutions to overspending!
Cut back on spending | postpone non-essential spending | spread large payments over a longer period of time | use savings or surplus money from previous months | generate extra income | borrow money