Household Budget

1

• Household Budget

2
What is a budget ?

• It is a plan of future income expenditure.

3
Who needs to budget ?

• Households
• Students
• Government
• Business

4
Why are budgets needed ?

• To ensure the best use of money.
• To live within your means
• (not overspend)
• To highlight areas of overspending.
• To see if you will have savings.

5
Budget Surplus

• Planned Income gt Planned Expenditure
• 500 gt 300
• 200 left
• Surplus

6
What can be done with a surplus budget?

• Pay off loans (debt)
• Increase spending
• Save

7
Deficit Budget

• Planned Income lt Planned Expenditure
• 200 lt 300
• 0verspent by 100
• deficit

8
How can a deficit be reduced

• Increase income, work overtime..
• Reduce spending especially discretionary.
• Spread out payments over the year.
• Get a bank overdraft.

9
What is a bank overdraft?

• It is a short term loan.
• The bank gives you permission to spend more than
  you have in you account.
• You must pay it back within one year.
• Interest is charged.

10
What is saving?

• It is putting aside income spending at a future
  date.

11
Why do people save?

• For childrens education
• To go on holiday
• To buy a car
• For emergencies