My Workbook

Name:

Form:

Life Style Finances

Workbook. Page 14 of 39. © Annie Patton.


Income Worksheet 3

Future Income 5

Expenditure Worksheet 7

The need for money 9

Food and Shelter 11

Kate’s Spending Habits 13

Budget Sheet 14

Kate’s Problems 15

My Budget Sheet 16

Budget 1 year after commencing work 17

Credit 1 18

Credit 2 21

Hire Purchase 23

Student or Work 25

Banking 27

Investments 29

Tax 1 31

Effects of Taxation 32

Insurance 1 34

Insurance 2 35

Insurance 3 36

Results 37

Conclusion 38


  1. What is income?
  1. What form of income do you have?
  1. What form of income does an unemployed person have?
  1. What form of income does a millionaire have?
  1. Is overtime an example of an employee’s income? Explain.
  1. What is commission and why would a firm offer this type of reward to an employee?
  1. What are benefits in kind and why do you have to pay tax on them?
  1. What is the difference in regular and irregular income?
  1. Complete the Payslip for an imaginary worker.

Date / Week
Number / Employee
Name / Employee Number / PPS
Number
Gross Pay / Deductions / Total
Deductions
Basic / Overtime / Total / PAYE / PRSI / Union / Pension / Other
Net Pay
  1. What do PAYE and PRSI stand for?
  1. What is the purpose of your PPS number?
  1. What does PPS stand for?
  1. What is the difference in Statutory and Voluntary deductions and give examples?
  1. What are the sources of your present income?
  1. How much does each source generate?
  1. Can you afford everything you want at the moment?
  1. Can you afford everything you need at the moment? (Notice these are not the same words as Question 3.)
  1. List the items you wanted, but did not need?
  1. Image life after school and the career you would like to follow. What will this be?
  1. Now you are going to investigate the income you are likely to have 1 year after commencing work. In order to source this information you will need to go on the Internet and visit www.nicemove.ie and go to wage surveys. Alternatively you may source it from www.monster.ie or the web site of the trade union that represents your chosen occupation. You could go to www.google.ie and type in for example Ireland + nurse + Trade Union, if you are going to become a nurse.

How much should you earn per month. (12 months in the year).

  1. Now imagine you are 10 years in the job, how much will you expect to earn per month?
  1. Record the difference in your pay packet per month.
  1. Does this mean you will have that amount extra to spend? Explain your answer.
  1. What deductions will be taken out of your pay packet before you get paid?
  1. What other deductions could your employer take out of your pay packet?
  1. So if you get an extra €50 per month, 10 years after commencing work does that mean you are €50 better of? Explain.
  1. What are the main points you learned from doing this exercise?

1.  What is expenditure?

2.  What are the differences in fixed, regular and discretionary spending?

3.  Give examples of household spending and categorise them.

4.  How can one control their expenditure?

5.  Is it cheaper or more expensive to buy goods using borrowings? Explain.

6.  What determines how much one can borrow?

7.  How does one calculate the number of ESB units they have used?

8.  If the previous reading of an ESB meter had been 345678 and the present reading was 346210, how many units were used?

9.  Will it be the present or previous reading on an ESB bill that will be the highest?

10.  What is meant by the standing charge on an ESB bill?

11.  What tax has to be paid on the ESB bill?

12.  How often do you have to pay an ESB bill?

13.  What does the E mean beside the units?

14.  What is the purpose of a receipt?

You are about to discover your need for money at the moment and your need in the future.

  1. First make a list of the things you currently spend your money on:
  1. Now estimate how much you spend on average on each item per week.
  1. Now image yourself 1 year after you have left college and started work and make a list of your likely items of expenditure.
  1. Your first big purchase at this stage in life will probably be a car, so pick the kind of car you would like at this stage in life.
  1. Go to www.carzone.ie and find the price of your chosen car.
  1. Chances are you will not have enough savings, but don’t worry you can borrow. Go to www.aib.ie and the car loan section and find out how much the loan cost you per month, if you wish to repay it within 24 months?
  1. Apart from the loan what extra payments would you need to make in connection with the purchase of the car?
  1. Could you afford all this and still live? From the lesson before the last one, what was your projected income per month?
  1. What would the repayments be per month, if you took 48 months to pay back the loan?
  1. Can you afford this?
  1. If not, how about a cheaper car? Repeat exercises 5 – 11.
  1. So in reality what type of car will you start of with?
  1. What were the main points you learned in this exercise?

Image you are going to cook a typical meal for yourself and a friend meal, if you do not have a list of ingredients (You have not done your homework!!!) teacher will supply you with details.

  1. List ingredients.
  1. Go to www.superquinn.ie and get a list of the prices, remember for spices etc you will have to buy a jar or packet.
  1. Total the cost of the meal.
  1. Divide by two if your friend was not invited and you kept the second portion in the fridge for the next day. So what would be the cost of your main meal for a week?
  1. Make a list of the other food items that you would want for a week. For example bread for lunch, cornflakes for breakfast etc. Price these items.
  1. Make a list of the cleaning materials etc you will want for a month. Remember the family will no longer buy your toothpaste.
  1. So from the above calculations, what do you think would be your total cost of groceries for a month, if you were living in a bedsit or an apartment?
  1. Decide what area you would like this bedsit or apartment to be located in?
  1. Go to www.myhome.ie, www.nicemove.ie or www.propertynews.ie and find the cost of renting a bedsit or a one bed apartment in this area.
  1. If you had friends willing to share a rented house, would this be cheaper?
  1. One year after starting to work, will you be able to buy a car and move out of your home?
  1. Any solutions to this problem?


Kate has some ideas about how she is going to spend her money over the next four weeks and decides to do a budget in advance to see if all this is possible.

  1. At the beginning she has €25 in her possession.
  2. She gets €60 pocket money per week.
  3. Her birthday is in week 3 and she thinks she will get €330 as presents.
  4. She has been asked to act as a babysitter on Week 2 and Week 4 for 3 hours each week at €7 per hour.
  5. She plans to sell an old DVD to a friend in Week 1 for €5.
  6. She has to pay her bus fare to school 50c single fare, but there is no school for 3 days in Week 3.
  7. She plans to spend at least €5 on make-up per week.
  8. She goes out every Friday night with friends to the cinema or a disco costing €8 and spends €7 on food that night.
  9. She normally spends €100 on clothes per month. You can choose which week she buys the clothes.
  10. Everyday she buys a bottle of Coke costing €1.30 and two chocolate bars costing 75c each. (Every day)
  11. She hopes to be able to buy a digital camera costing €325 in Week 3.
  12. She buys a new DVD costing €20 every second week.
  13. She buys a magazine costing €2.50 every week.
  14. She gets her hair cut every month costing €50. Due in Week 2.

Complete the following budget sheet using Kate’s details on page 14:

Week 1 / Week 2 / Week 3 / Week 4 / Total
Income
Pocket Money
Presents
Pay
Other
Total Income
Expenditure
Travel
Make Up
Outings
Clothes
Food
Hair
Equipment
Magazines
Music
Other
Total Expenditure
Opening Cash
Total Income – Total Expenditure
Closing Cash
  1. Do you notice any problems in Kate’s budget, in particular with regard to Week 2 and make suggestions how this could be avoided.
  1. Will she be worse or better of at the end of this month, than she was at the beginning? Why?
  1. Suggest ways she could improve her financial situation.
  1. Why is it recommended you do a budget, before you commence the period of time in question?
  1. How would this budget differ, if she was a boy?
  1. What would happen, if her family only gave her €200 in presents?
  1. Can she effort to go out an extra night this month?

.

Complete the following a budget for yourself at the present day. Be as realistic as possible.

Week 1 / Week 2 / Week 3 / Week 4 / Total
Income
Pocket Money
Presents
Pay
Other
Total Income
Expenditure
Travel
Make Up
Outings
Clothes
Food
Hair
Equipment
Magazines
Music
Other
Total Expenditure
Opening Cash
Total Income – Total Expenditure
Closing Cash

Did you learn anything about your spending habits? Are there any lessons you would like to share with the class, if so write them down and share next class.


Complete the following budget for yourself one year after commencing work. Use the information sourced in the previous lessons. Take Car Tax to be €300 per year and Car Insurance to be €1000 per year. Be as realistic as possible and use the Internet to price items where necessary. Note you should not pretend to own a house, but rather rent at this stage.

Week 1 / Week 2 / Week 3 / Week 4 / Total
Income
Salary
Overtime
Presents
Other
Total Income
Expenditure
Rent
Car Loan
Car Tax
Car Insurance
Food
ESB
Telephone
Make Up
Outings
Clothes
Hair
Equipment
Magazines
Music
Other
Total Expenditure
Opening Cash
Total Income – Total Expenditure
Closing Cash


Aim: To establish a better idea of what credit is and the care that needs to be taken before taking up an offer of credit and during the time one is using credit.

Method:

Go to http://www.citibank.com/us/cards/cm/ntc.htm.

1)  Go to the following link on the webpage ‘Know the Rules’, ‘All About Credit’ and ‘Types of Credit’. See diagram below.

a)  List some uses an individual might have for credit.

b)  With credit comes what? (Clue it begins with R.)

c)  List the types of credit? (Note a credit line linked to a checking account in Ireland is called an overdraft facility and it means you can write cheques for more than you have in your account.)

d)  A loan can be guaranteed by what? C Explain this word.

e)  Give two examples of things that can act as security (collateral) for a loan.

f)  Is it likely that someone who has just been working one year would have a lot of collateral for a loan?

g)  Which of the following would you expect to have more collateral, someone who has been working 1 year or someone who has been working twenty years?

h)  Why would a home be more acceptable than a car as security for a loan?

i)  What is the most popular type of credit used? (More details on how these work later.

j)  What is the difference in a secured and an unsecured loan?

2)  Go to the following link on the webpage ‘Know the Rules’, ‘All About Credit’ and ‘How much Credit can you afford’?

a)  What is the impact of defaulting on a loan?

b)  Why should one not just borrow and borrow?

c)  What is meant by debt ratio?

d)  What is the recommended Debt Ratio?

3)  Go to the following link on the webpage ‘Know the Rules’, ‘All About Credit’ and ‘Top 10 Tips for Good Credit’.

a)  What is meant by being a good consumer of credit?

b)  How can one become a good consumer of credit?

4)  Go to following link on the webpage ‘Know the Rules’, ‘All About Credit’ and ‘Applying for Credit’?

a)  What is meant by your credit scoring?

b)  What information will your creditors be looking for before they give you a loan?

c)  What are the 3’C of good credit and explain each one?

d)  What is another name for credit scoring?

Conclusion / Homework

Outline the main things you have learned about credit in this lesson.

Aim: To continue to establish a better idea of what is credit, the care that needs to be taken with it, plus introduce the Irish Credit Bureau and its purpose.

Method:

Go to http://www.citibank.com/us/cards/cm/ntc.htm.

5)  Go to the following link on the webpage ‘Know the Rules’, ‘All About Credit’ and ‘Maintaining Good Credit’?

a)  Who would use your credit score or credit history?