Expenditure

EXPENDITURE

• the action of spending funds.
• "the expenditure of taxpayers' money"

OPPORTUNITY COST

• This is making a decision/choice based on limited/scarce resources.
• The item not selected is the opportunity cost-
• opportunity foregone.

EXAMPLE OF OPPORTUNITY COST

• Example I have €2.00.
• I can buy ice-cream or
• Pringles.
• I choose ice-cream.
• Opportunity cost = Pringles.
• Financial cost = €2.00

IMPULSE BUYING

• Buying on the spur of the moment
• Without thinking or planning
• example: I go into a shop looking for milk but instead buy a chocolate bar as well as the milk.

FALSE ECONOMY

• Buying something because it is cheap even when you don't need it.
• EXAMPLE
• 2 FOR 1
• Buy 1 get 1 free, etc..

FIXED EXPENDITURE

• Money that is spent at the same time each time, each week, month, year
• This amount is usually the same
• EXAMPLE
• mortgage
• rent
• loan repayments

IRREGULAR EXPENDITURE.

• The amount paid out varies,
• It is paid at different times.
• EXAMPLE
• ESB, clothes, shoes, groceries

DISCRETIONARY EXPENDITURE

• Money spent on things you can live without
• (luxury items)
• The amount varies
• EXAMPLE
• sky tv, playstation, wifi, holiday

PRIORITISING (BUDGETING)

• If you have limited income you must plan to spend
• you must make sure you have enough for
• ~FIXED EXPENDITURE first
• ~Then IRREGULAR EXPENDITURE
• ~Then finally if you have money left you can afford to spend it on DISCRETIONARY EXPENDITURE

If you have a deficit...

• You must reduce discretionary expenditure first.

Current expenditure

• (revenue expenditure)
• Spending money on day to day items,
• EXAMPLE
• food, drink, petrol, phone credit

Capital Expenditure,

• Spending money on durable items
• ~items that last a long time
• EXAMPLE
• car, tv, house, furniture, washing machine.

Calculating an ESB bill,

• ~Subtract present from previous meter reading,
• ~Multiply by the rate per unit
• ~Add the standing charge,
• (rental of equipment)

Slide 14

• Present
• 6734
• Previous
• 5890
• No of units used
• 844
• Rate per unit
• .20
• Sub total
• 168.80
• Standing charge
• 10.00
• Total charge
• 178.00
• Present
• 6734
• Previous
• 5890
• No of units used
• 844
• Rate per unit
• .20
• Sub total
• 168.80
• Standing charge
• 10.00
• Total charge
• 178.00