- Expenditure is the amount of money spent by an individual or household.
Overspending
An individuals or households expenditure should not be more than their income. This is called overspending.
The consequences of overspending:
- Not being able to pay for your bills.
- Not being able to save for the future.
- You will not have money for unexpected events.
How to Avoid Overspending
- Do not spend more money that you have.
- Shop around to get the best deal.
- Before you purchase an item ask yourself if you really need it.
- Always pay the important bills first.
Types of Expenditure
- Fixed Expenditure: payment on a regular basis. The amount does not vary with usage.
- Irregular Expenditure: payment where the amount and/or when it is depends on usage. For example utility bills such as heating and electricity bills will be different depending on how often they have been used.
- Discretionary Expenditure: payment for things we want nut do not need. For example, a holiday or eating out.