Household Bills and Personal Budget Revision Notes for HSC SSCE Mathematics Standard

Household Bills and Personal Budget

What are household bills?

Household bills represent the various ongoing expenses you need to pay when living in and maintaining a home. These bills make up a large portion of most household budgets, so understanding and managing them is essential for financial planning.

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Household bills are the regular costs you incur for services and utilities needed to run your home. They typically represent one of the largest categories of expenses in any household budget.

Types of household bills

Common household bills include:

Council rates - local government charges for services
Electricity bills - power usage charges
Gas bills - gas usage for cooking and heating
Water and sewerage rates - water supply and waste water services
Telephone bills - landline or mobile phone services
Internet connection - home internet service

These bills are typically charged monthly, quarterly, or annually depending on the service provider.

Reading household bills

Being able to read and understand your bills is an important skill. Most bills contain similar information, though the layout may vary between providers.

Key components of a bill

When reading any household bill, look for these important elements:

Previous account balance - amount outstanding from last bill
New charges - current period's usage and fees
Due date - when payment must be made
GST (Goods and Services Tax) - the 10% tax included in many services
Total amount due - final amount to pay

chatImportant

Always check the due date carefully to avoid late payment fees. Late payments can result in additional charges and may affect your credit rating.

Worked example: Reading a telephone bill

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Worked Example: Understanding a Telephone Bill

Let's look at a telephone account and identify key information.

Question: Using a telephone bill, answer:

a) What was the amount of the previous account?
b) What is the due date?
c) How much GST is charged?

Bill details:

Previous Account: $63.42
Payments and Adjustments: $63.42 CR (credit)
GST Adjustments: $0.00
Balance Forward: $0.00
New charges: $67.40
New charges due: 11 March
Total amount due: $67.40

Summary of charges:

Recurring charges: $52.66
Other charges and credits: $0.58
Usage charges: $15.44
Discounts: $7.41 CR
GST: $6.13
New charges (including GST): $67.40

Solution:

Step 1: Read the 'Previous Account' section

a) Previous account is $63.42

Step 2: Read the box labelled 'New charges due'

b) Due date is 11 March

Step 3: Read the 'GST' line in the summary of charges

c) GST charged is $6.13

What is a personal budget?

A personal budget is a financial plan that helps you manage your money effectively. When you create a budget, you're making sure that what you earn (income) matches up with what you spend (expenses).

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Budgeting means planning how to manage your income by balancing it against your expenses. It's one of the most important financial skills you can develop.

Budgets can be created for different time periods depending on your needs:

Weekly budgets - useful for managing day-to-day spending
Monthly budgets - common for people paid monthly
Yearly budgets - helpful for long-term financial planning

Creating a budget

Follow these four steps to create an effective budget:

1. List all income categories

Identify every source of money you receive, such as:

Salary or wages
Bonuses
Investment returns
Part-time work income
Government benefits

2. List all expense categories

Record all your regular expenses, including:

Housing costs (rent, mortgage, rates)
Utilities (electricity, gas, water, phone, internet)
Food and groceries
Transport (vehicle costs, public transport)
Insurance
Loan repayments
Personal expenses (clothing, recreation, gifts)

chatImportant

Don't forget to include all your expenses, even small ones. Many people underestimate how much they spend on items like coffee, snacks, or entertainment subscriptions. These small expenses can add up significantly over time.

3. Calculate totals

Add up:

Total income: Sum of all income sources
Total expenses: Sum of all expense categories

4. Balance the budget

Calculate your balance to see if you have a surplus or deficit:

$\text{Balance} = \text{Total Income} - \text{Total Expenses}$

If balance is positive: You have a surplus (saving money)
If balance is negative: You have a deficit (spending more than you earn)
If balance is zero: Income exactly matches expenses

Balancing a budget

Let's work through a complete example of creating and balancing a weekly budget.

Worked example: Balancing a weekly budget

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Worked Example: Creating and Balancing a Weekly Budget

Question: Balance the following weekly budget and determine if there is a surplus or deficit.

Budget table:

Income	Amount	Expenses	Amount
Salary	$1726.15	Clothing	$73.08
Bonus	$20.00	Gifts and Christmas	$114.80
Investment	$156.78	Groceries	$467.31
Part-time work	$393.72	Insurance	$171.34
		Loan repayments	$847.55
		Motor vehicle costs	$105.96
		Phone	$38.26
		Power and heating	$51.82
		Rates	$54.82
		Recreation	$216.79
		Work-related costs	$68.76
		Balance
Total		Total

Solution:

Step 1: Add all income sources

$\text{Income} = \$1726.15 + \$20.00 + \$156.78 + \$393.72$

$\text{Income} = \$2296.65$

Step 2: Add all expenses (excluding the balance line)

\text{Expenses} = \$73.08 + \$114.80 + \$467.31 + \$171.34 + \$847.55 + \$105.96

\text{Expenses} = + \$38.26 + \$51.82 + \$54.82 + \$216.79 + \$68.76

$\text{Expenses} = \$2210.49$

Step 3: Calculate the balance

$\text{Balance} = \text{Income} - \text{Expenses}$

$\text{Balance} = \$2296.65 - \$2210.49$

$\text{Balance} = \$86.16$

Step 4: Record the balance in the budget table

The balance is $86.16, which is positive, meaning this budget has a weekly surplus of $86.16 that can be saved or used for additional expenses.

Completed budget:

Income	Amount	Expenses	Amount
Salary	$1726.15	Clothing	$73.08
Bonus	$20.00	Gifts and Christmas	$114.80
Investment	$156.78	Groceries	$467.31
Part-time work	$393.72	Insurance	$171.34
		Loan repayments	$847.55
		Motor vehicle costs	$105.96
		Phone	$38.26
		Power and heating	$51.82
		Rates	$54.82
		Recreation	$216.79
		Work-related costs	$68.76
		Balance	$86.16
Total	$2296.65	Total	$2296.65

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Always check that both totals are equal after adding the balance. This confirms your calculations are correct. If the totals don't match, go back and check your arithmetic.

Remember!

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Key Points to Remember:

Household bills include council rates, utilities (electricity, gas, water), telephone, and internet - they form a large part of household expenses
When reading bills, always check the previous account balance, due date, and GST to understand exactly what you owe
Personal budgets help you plan and manage your income by balancing what you earn against what you spend
To create a budget, follow four steps: list income, list expenses, calculate totals, and find the balance
The key formula is: Balance = Income - Expenses
- A positive balance means you have money left over (surplus)
- A negative balance means you're spending more than you earn (deficit)

Household Bills and Personal Budget (HSC SSCE Mathematics Standard): Revision Notes