Household budgets

Household budgets

1. What is a budget?

   • It is a plan for future expenditure

2. Who needs to budget?

   • Households
   • Students
   • Government
   • Business

3. Why are budgets needed?

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

4. What can be done with a budget surplus?

   • pay off loans
   • increase spending
   • save

5. How can a budget deficit be reduced?

   • Increase income (work overtime)
   • reduce spending (discretionary
   • spread out payments over the year
   • get a bank overdraft

6. What is a bank overdraft?

   • It is a short term loan
   • the bank gives you permission to spend more than whats in your account
   • you must pay it back within on year
   • interest is charged

7. What is saving?

   • putting aside income and spending at a future date

8. Why do people save?

   • for childrens education
   • to go on holiday
   • to buy a car
   • for emergencies