Money Management - Leaving Cert Home Economics

Terms in this set (20)

Budget
A plan for spending money.
Income
Money received.
Expenditure
Money paid out.
Gross Income
Total amount earned before deductions.
PAYE
Pay As You Earn. Income Tax. Paid to State.
PRSI
Pay Related Social Insurance. Pays for benefits if and when needed.
Net Income
Total amount earned after deductions. Take home pay.
Statutory Deductions
PAYE and PRSI
Voluntary Deductions
Optional, e.g. health insurance.
Household Expenses
Accommodation (rent/mortgage). Food. Clothing. Medical expenses. Travel. Electricity. Heating (gas/oil/etc.). Entertainment. Savings.
Tax Credit
System used to calculate the amount of tax a worker will pay.
Net Tax
= Gross Tax - Tax Credits
Advantages of Budgeting
1. Security.
2. Highlights overspending.
3. Minimises waste.
4. Good example.
Considerations when choosing where to SAVE
1. Interest Rate.
2. Security.
3. Ease of withdrawal.
Places to Save
1. Credit Union.
2. Post Office.
3. Bank.
4. Building Soceity.
Advantages of Saving
1. Earn interest.
2. Cheaper to buy with saved money than on credit.
3. No debt.
Credit
Buy now, pay later.
Forms of Credit
1. Credit Card
2. Loan
3. Bank Overdraft
4. Hire Purchase
Advantages of Credit
1. Use of item before it's paid for.
2. Takes to long to save for some items, e.g. houses.
Disadvantages of Credit
1. Interest charged so costs more.
2. Encourages spending.
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