Download Budgets!

BUDGETS!
WHAT IS A BUDGET ANYWAY?
A budget is a record of our planned income and our planned expenditure.
It is a good way to see if we will have enough money throughout the month for
our discretionary treats!
A budget helps us to see how much money we receive and it helps make sure we
don’t spend more than we earn.
INCOME
 We record our income at the top of a budget.
Like This
 There are many different type of income, such
as……
Wages
Pension
Child Benefit
 Only add money you know you will receive to the
table. This will make for a more accurate budget!
We receive our money on a pay slip
EXPENDITURE
 Fixed- This is spending the same amount on a particular thing
at a certain time such as every year/month. You MUST pay
this!! E.g. Mortgage, Television Licence
 Irregular- This is spending a varied amount on goods and
services. It is called irregular because the amount varies
each month, e.g. your electricity bill will increase in amount
during the winter months. You also have to pay this.
 Discretionary- This is spending money on goods we want but
do not need. We should only buy these goods if we have
money left over at the end of the month.
 We record our expenditure directly under our Total income
like this
IS YOUR BUDGET A SURPLUS OR DEFICIT???
Surplus
If your planned income
is more than your
planned expenditure.
Surplus
Income
Expenditure
Deficit
If your planned income
is less than your
planned expenditure.
Deficit
Expenditure
Income
Ways to deal with a deficit
budget!
 Cut down on discretionary
expenditure- such as,
holidays, new clothes,
presents etc.
 Shop around for cheaper
purchases . E.g. cheaper
brands of food
 Spread bills out over the
year so that you don’t
have to pay the full
amount altogether and
therefore you will be able
to pay for necessary
items monthly
NET CASH, OPENING CASH, CLOSING
CASH
 Net cash is produced when we take the total expenditure away from
the total income. This is the amount of money we have left over after
all deductions(PAYE, USC, PRSI) are taken out and all of our
expenditure is subtracted. This is the money we are left with.
 Opening cash is the money left over from the previous month. You bring
forward the closing cash from the month before to get your opening
cash
 Closing cash is Net Cash + Opening Cash. This is the money you have
left over at the end of preparing your budget.
BUDGET 2015
 In the 2015 Budget, the water charge was introduced.
 This will have a massive change in peoples monthly household budgets.
 This will increase the odds of people having a low amount of money at
the end of the month or even worse, left with a deficit at the end of
the month.
 In 2014, statistics showed that people where spending more money on
housing (rent or mortgage repayments which have increased from come
12% to 18.2%) instead of food ( which has dropped to 16.2%).
 Also there has been a sharp increase in fuel and light due to increased
energy prices. The average weekly expenditure is €35.35, an increase
of 15.3 %
 The amount spent on alcohol and cigarettes has fell by more than 16%.
 Transport decreased by 5%.
2015 IMPACTS
• In 2015 the biggest impacts to household budgets show the cost of
housing and rent to be on the increase while energy costs are showing a
large reduction.
• Two major impacts in household budgets is the increased costs of
mortgages/rent, driven by the combination of LPT (Local Property Tax)
and Water Charges.
• The second major change is more positive, this is driven by a reduction
in fuel and energy.
• Unfortunately the cost savings in fuel and energy are less than the
increase in mortgage and rent.
FUTURE IMPACTS
 Future household budgets appear to be on the increase
again due to several factors.
 The factor of income will also be required to increase to
meet increase costs.
 As Ireland’s Economy recovers household budgets will
drive the need for increased wages.
O'Callaghan Family
July
August
Sept
October
Total
Planned Income
Salary - Mark
1700
1700
1700
1700
6800
Salary - Sally
1350
1350
1350
1350
5400
Total Income
3050
3050
3050
3050
12200
House Mortgage
650
650
650
650
2600
Car Insurance
450
Planned Expenditure
Fixed
108
TV Licence
This is what a budget looks
like!
Can you see where the net
cash, opening cash and closing
cash are placed?
450
108
1100
758
650
650
3158
Groceries
350
350
350
350
1400
Telephone
100
Motor Expenses
65
65
185
65
380
Subtotal
515
415
685
415
2030
80
80
80
80
320
Subtotal
Irregular
150
250
Discretionary
Entertainment
1800
Holiday
1800
Subtotal
80
1880
80
80
2120
Total Expenditure
1695
3053
1415
1145
7308
Net Cash
1355
-3
1635
1905
4892
Opening Cash
200
1555
1552
3187
200
Closing Cash
1555
1552
3187
5092
5092
THANKS FOR WATCHING
 Now you’re able to create your own budget!
 We hope you enjoyed our presentation and trust
that you now have a clear understanding for
Budgets.
 By Sinead Donavan and Rachael Hughes