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In relation to household budgeting, explain essential expenditure and discretionary expenditure - Leaving Cert Home Economics - Question 12 - 2013
Question 12
In relation to household budgeting, explain essential expenditure and discretionary expenditure. Give one example of each. Essential expenditure ___________________... show full transcript
Worked Solution & Example Answer:In relation to household budgeting, explain essential expenditure and discretionary expenditure - Leaving Cert Home Economics - Question 12 - 2013
Step 1
Essential expenditure
Answer
Essential expenditure refers to the money that must be spent to manage family life effectively. This includes spending on necessities such as food, shelter, and healthcare. This type of expenditure can be categorized into fixed and irregular costs. Fixed costs are consistent amounts that occur regularly, such as rent or mortgage payments. In contrast, irregular costs might fluctuate, such as utility bills or school expenses.
Step 2
Step 3
Discretionary expenditure
Answer
Discretionary expenditure, on the other hand, refers to spending on non-essential items. This occurs after all essential expenditures and savings have been accounted for. Discretionary spending includes luxuries and activities that are not necessary for basic living.
Step 4