2. A Budget:
is a financial plan that shows expected
income and expenditure over a
certain time period.
Why budget?......
Ms O' Brien Chanel College
3. 1. To ensure money is available to
cover costs
2. Reduce risk of impulse buying
3. Avoid build up of debt
4. Money for a ‘rainy day’
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4. What is Income?
It is money or a benefit in kind you receive
1. Regular
2. Irregular (additional)
3. Benefit-in-Kind
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5. 1. Regular Income:
Is what you are sure of receiving
You can plan to spend it
E.G. Wages/ Salary/Child Benefit
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6. 2. Irregular Income:
Is what you are not sure of receiving
You cannot plan to spend it
E.G. Bonus / Lotto Win/ Tax Rebate
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7. 3. Benefit- in –Kind:
Non money income received for work done
Incentive to work hard
Boosts employee morale
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8. Place Incomes under correct headings
Regular Benefit in Kind Irregular
Wages Overtime Interest Pension Dividend
Salary Lotto win Gift Car Social Welfare Benefit Mobile
Bonus Commission Tax refund Club Membership
Ms O' Brien Chanel College
9. Wages
Is regular income for worked or number
of goods produced.
E.g. Builder
Salary
Is regular income received for doing a job
no matter how many hours you spend at it.
E.g. Teacher
* Min wage €6.06
Ms O' Brien Chanel College
10. Types of Employee Income
1. Time Rate:
Getting paid per hours worked
2. Piece Rate:
Getting paid per number of products produced.
Which would you prefer?....
11. Commission
Additional income calculated as a
percentage of sales.
Example
Mary works in . She earns
5% commission on every euro worth of
clothes she sells.
How much does she earn for selling €200
worth?
12. Solution
200 X 5
100
= €10 Commission
Ms O' Brien Chanel College
13. Basic Wage
Regular weekly payment for normal hours
worked
Example: €10 per hour x 30 hrs = €300
I love my
job..
14. Overtime
Additional payment for working over your
normal hours
Example:
Ben gets €10 per hour working in a petrol
station. On Saturday he worked two hours
overtime on time and a half. How much did
he receive for overtime?
16. Example
• Mary receives €20/hr for a normal
30 hour week and double time for
overtime.
• How much does she earn for a 32
hour week?
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17. Answer
• Basic Pay= 30 hours x € 20 = €600
• Overtime = 2 x (€20 x 2) = € 80
• Total €680
Ms O' Brien Chanel College
18. Gross Wage
Basic Wage + Overtime before deductions
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19. Net Wage
(Take Home Pay)
Basic pay + overtime after deductions
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20. Deductions:
Voluntary Involuntary
(Choice) (Compulsory)
Pension PAYE
Medical Insurance PRSI
Savings Universal Social
Contribution
Trade Union Fees
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21. Statutory Deductions:
PAYE – Pay as you Earn
- 32800 @ 20%
- Anything over @ 41%
- Used by government to invest in Services
Example: Health Care
Ms O' Brien Chanel College
22. Statutory Deductions:
PRSI: Pay Related Social Insurance
Collected as a contribution by the
employee towards social welfare
benefits
Example: Old age Pension
Unemployment benefit
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23. Wage slip
Basic hourly wage: is what you get for every hour worked
Overtime: is what you receive for any extra hours you work
Basic
Basic hourly wage €10 Per Hour
No of hours worked 6 Hours
Total wages received
Over time
Basic wage plus time and a
half
No of hours worked 3 Hours
Total Overtime wages
received
Gross wage
Ms O' Brien Chanel College
24. Budgets
Workbook pg 2 Q10
Jan Feb Mar April May June Total
Joe 2300 2300 2600 2550 2300 2300
Mary 2800 2800 2800 3600 2800 2800
Child 240 240 240 240 240 240
Ben
Intere - - - - - 560
st
Total
Incom
e
Ms O' Brien Chanel College
25. Expenditure
Fixed: Spending money on goods and services
regularly. Amount does not vary.
Irregular: Spending money on goods and services
regularly But the amount spent varies.
Discretionary: Spending money on things we want
but do not need
26. Expenditure
Fixed Irregular Discretionary
Rent Car running costs Presents
Mortgage Phone bills Holiday
Insurance Groceries Entertainment
Clothes Magazine
Ms O' Brien Chanel College
27. Current Expenditure: Spending money
on day-to-day items
Capital Expenditure: Spending money
on durable items for long term usage
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28. Opportunity Cost
The item we do without when we have
to make a choice between two or
more actions
Ms O' Brien Chanel College
29. Opportunity Cost
You have €50 to spend .
You can buy a ticket to go and see a
or you can buy 5 video games.
What is your decision?
30. Impulse Buying
“Buying without thinking”
Ms O' Brien Chanel College
31. When w
as the
last tim
e you
bought
someth
ing on
impulse
?
32. False Economy
Buying something because it is
cheap but in the long run costs you
more…
Ms O' Brien Chanel College
33. False Economy
She only cost
a euro dad
and she is
going to have
puppies!
Discuss
34. Reading Electricity Bills
Present 6734
Previous 5890
No of units used 844
Rate per unit .20
Sub total 168.80
Standing charge 10.00
Total charge Ms O' Brien Chanel College 178.80
35. E.G. Question ESB Meter Reading
Present 6534
Previous -4850
No of units used
Rate per unit X.30
Sub total
Add Standing charge +15.00
Total charge
Ms O' Brien Chanel College
36. E.G. Question ESB Meter Reading
Present 3436
Previous 2916
No of units used
Rate per unit .15
Sub total
Add Standing charge 16.20
Subtotal
Vat @13.5%
Total owed
Ms O' Brien Chanel College
37. Budgets
Net Cash
Total Income – Total Expenditure
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38. Net Cash
Here’s €10
pocket
money
If I have €10
income and I
spend €7 on
a new
Thanks football I will
have net
cash of €3!
39. Opening Cash
Money available at the start of the
month
(Brought forward from the previous
month)
Money in bank
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40. Net Cash + Opening Cash= Closing Cash
Money left over at the end of the
month
Surplus
Deficit
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42. Workbook page 11 Q2
Jan Feb Mar Apr Total
Total 1850 2280 3170 1740 9040
Expenditure
Net Cash (230) (660) (1550) (120) (2560)
Opening cash 900 900
Closing cash 670
Ms O' Brien Chanel College
43. Workbook page 15 Q4
Jan Feb Mar Apr Total
Total 2850 3960 3690 4470 14970
Expenditure
Net Cash 1130 20 540 (290) 1400
Opening 1000 2130 2150 2690 1000
cash
Closing cash 2130 2150 2690 2400 2400
Ms O' Brien Chanel College
44. Workbook page 17 Q5
Jan Feb Mar Apr Total
Total 4495 2880 2920 4980 15275
Expenditur
e
Net Cash 1655 2270 2530 320 6775
Opening 495+ 2150+ 4420+ 6950+ 495+
cash
Closing cash =2150 =4420 =6950 =7270 = 7270
Ms O' Brien Chanel College