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Money management skills are vital to running the house as a financial unit - Leaving Cert Home Economics - Question 4 - 2015
Question 4
Money management skills are vital to running the house as a financial unit. (a) Analyse three social factors that affect household income. (b) Design a family bu... show full transcript
Worked Solution & Example Answer:Money management skills are vital to running the house as a financial unit - Leaving Cert Home Economics - Question 4 - 2015
Step 1
Analyse three social factors that affect household income.
Answer
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Age: As people age, they generally become more experienced and may move up the pay scale. However, income can decrease during retirement when pension benefits become the main source of income.
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Gender: Gender disparities in the workforce contribute significantly to household income. For example, women may still encounter barriers that affect their income potential compared to men.
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Socio-economic background: Individuals from low socio-economic backgrounds may have limited educational opportunities, impacting their employment prospects and earning capabilities.
Step 2
Design a family budget (two adults and two young children) where the net weekly income is €650. Give a reason for the proposed allocation of income for each area of expenditure.
Answer
Family Budget Breakdown:
- Housing: 25% - €162.50
*Reason: This covers rent and necessary housing expenses. - Food: 25% - €162.50
*Reason: Essential for daily living; includes meals at home. - Household Expenses: 15% - €97.50
*Reason: Covers utilities like electricity and water. - Education: 5% - €32.50
*Reason: Necessary for children's schooling and related costs. - Childcare: 5% - €32.50
*Reason: Essential for looking after young children while parents work. - Travel: 5% - €32.50
*Reason: Transportation costs for school and work. - Clothing: 5% - €32.50
*Reason: Needed for school and leisure wear. - Savings: 5% - €32.50
*Reason: For emergencies and future planning. - Entertainment: 5% - €32.50
*Reason: To ensure quality family time.
Step 3
Recommend one type of savings scheme suitable for a family.
Answer
Savings Scheme Recommendation:
- Name of Institution: Post Office
- Type of Savings Scheme: Deposit account
- Interest Paid: 0.25%
- Ease of Access to Funds: Funds can be withdrawn easily at any Post Office with ID.
- Tax Payable: Interest is subject to DIRT (41%).