What is a budget?
A budget is a way of managing finances. It is a money plan used to balance income to the house/business (money coming in) and expenditure (money spent). A budget should be reviewed regularly on a weekly, monthly or yearly basis.
What are the consequences of poor budgeting?
A person may fall into debt.
A person may need to use their bank overdraft and so face overdraft charges.
A person may not be able to pay for all of their bills and face fines or late payment fees.
A person may face possible eviction if they have not left enough money to pay their rent.
A person poor credit rating if they are unable to repay credit card debt and this can make it difficult for them to apply for loans in the future.
A person may face bankruptcy.
A person may have what they own, house, car, furniture, repossessed.
A person may experience mental health issues, worrying about not having enough money or not being able to afford basic needs.
A person may experience relationship issues as they struggle with their finances.
A person may find themselves borrowing emergency/short term loans - possibly putting them into more debt.
Check out the CCEA GCSE Learning for Life and Work Second Edition Textbook to find out more or check out: My Revision Notes: CCEA GCSE Learning for Life and Work: Second Edition
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