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‘The average gross weekly household income in 2016 was £1,100 which is 7% higher than the figure recorded for 2010.’ (Household Budget Survey, 2016) (a) Analyse the factors that affect household income - Leaving Cert Home Economics - Question 4 - 2019
Question 4
‘The average gross weekly household income in 2016 was £1,100 which is 7% higher than the figure recorded for 2010.’ (Household Budget Survey, 2016) (a) Analyse the... show full transcript
Worked Solution & Example Answer:‘The average gross weekly household income in 2016 was £1,100 which is 7% higher than the figure recorded for 2010.’ (Household Budget Survey, 2016) (a) Analyse the factors that affect household income - Leaving Cert Home Economics - Question 4 - 2019
Step 1
Analyse the factors that affect household income.
Answer
Household income can be influenced by several key factors:
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Age: As individuals age, their income tends to increase due to experience and career progression. However, income may decrease upon retirement depending on pension arrangements.
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Gender: Gender disparities in income persist, with women often earning less due to factors such as career interruptions for family care or lack of representation in high-paying fields.
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Socio-economic status: Those from lower socio-economic backgrounds may face greater challenges, including limited access to quality education and employment opportunities, which in turn affects their earning potential.
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Employment factors: Those with full-time employment generally enjoy higher incomes compared to part-time workers. Job security and the type of employment (e.g., temporary vs. permanent) also play significant roles.
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Cultural influences: Different cultural expectations can shape career choices and income levels. For example, in some cultures, there may be expectations for certain family members to support the household financially.
Step 2
Suggest strategies that should be followed when planning a family budget to ensure the effective management of financial resources.
Answer
When planning a family budget, it's critical to:
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List all sources of income: Ensure that all potential income streams are accounted for, including salaries, benefits, and any alternative income.
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Identify planned expenditure: Break down expenses into categories: fixed (rent, mortgage) and discretionary (entertainment, dining out).
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Calculate weekly/monthly expenditures: Be realistic regarding the expenses and periodically review them to accommodate for any changes in circumstances.
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Set aside savings: Allocate a portion of the budget to savings, aiming for at least 5%-10% of income to build an emergency fund.
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Monitor and adjust: Regularly review the budget to ensure adherence, making adjustments as necessary to avoid overspending.
Step 3
Outline the role of the Money Advice and Budgeting Service (MABS) for families who are experiencing financial difficulties.
Answer
The Money Advice and Budgeting Service (MABS) plays a crucial role in supporting families with financial issues:
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Provide independent advice: MABS offers confidential advice to help families understand and manage their financial problems.
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Debt management solutions: They assist in resolving debt problems by developing customized repayment plans that consider the family's circumstances and needs.
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Education and planning: MABS educates families on budgeting techniques and helps them set financial goals, enhancing their overall financial literacy.
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Negotiations with creditors: MABS can negotiate with lenders on behalf of families to achieve more favorable debt repayment terms.
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Emotional support: They also provide emotional support, helping families to cope with the stress associated with financial difficulties.