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Saoirse is a 1st year college student living away from home and sharing a house with two other students - Leaving Cert Home Economics - Question 4 - 2016
Question 4
Saoirse is a 1st year college student living away from home and sharing a house with two other students. She has a weekly allowance of €220, for all her college expe... show full transcript
Worked Solution & Example Answer:Saoirse is a 1st year college student living away from home and sharing a house with two other students - Leaving Cert Home Economics - Question 4 - 2016
Step 1
Discuss four reasons why Saoirse should set out a budget.
Answer
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Prevents Overspending: A budget helps Saoirse keep track of her expenses, ensuring that she spends within her allocated allowance of €220. This encourages responsible spending and prevents her from running out of money.
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Reduces Stress: Knowing her financial situation enables Saoirse to manage her expenses better, alleviating stress related to uncertain finances. A clear budget helps her anticipate and plan for bills, which promotes peace of mind.
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Provides for Emergencies: By allocating a portion of her budget for emergencies, Saoirse can set aside money for unexpected expenses, such as repairs or health-related costs. This proactive approach ensures she is prepared for unforeseen circumstances.
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Develops Money Management Skills: Creating and adhering to a budget cultivates Saoirse's financial management abilities. This skill is valuable both during her college years and in her future personal and professional life, fostering fiscal responsibility.
Step 2
Set out a weekly budget plan showing how Saoirse should allocate her money to ensure her needs and wants are met.
Answer
Here is a proposed weekly budget for Saoirse:
- Rent: €55 (25% of allowance)
- Household Bills: €33 (15% of allowance)
- Health/Insurance: €22 (10% of allowance)
- Education Expenses: €22 (10% of allowance)
- Photocopying and Study Materials: €10 (5% of allowance)
- Books: €20 (9% of allowance)
- Clothing: €11 (5% of allowance)
- Leisure/Entertainment: €11 (5% of allowance)
- Savings: €11 (5% of allowance)
- Discretionary Spending: €15 (5% of allowance)
Total: €220
This budget ensures that Saoirse covers her essential expenses while also allowing room for leisure and savings.
Step 3
Suggest one suitable savings account that you would recommend for Saoirse. Give one reason for your choice.
Answer
I recommend the An Post Deposit Account because it offers ease of access through local branches and is secure. Saoirse can visit the post office to manage her savings conveniently, receive interest on her savings, and withdraw funds when needed, giving her flexibility as a student.