Finances and Budgeting (Junior Cert Home Economics): Revision Notes
Savings and Credit
Saving and Credit
When you don't have enough money to buy something, you have two options:
- Saving: Putting money aside until you can afford it.
- Buying on credit: Borrowing money and paying it back later.
Saving
Advantages:
✔ You earn interest* (extra money).
✔ The item costs less overall.
✔ No risk of getting into debt.
Disadvantages:
✘ You have to wait for the item.
Where to Save:
- Credit union
- Bank or building society
- Post office 📌 *Interest is the cost of borrowing money or the reward for saving it. When you borrow money from a lender, you will be charged interest as a fee for using their money. On the other hand, when you save money in a bank or other financial institution, they pay you interest as a reward for keeping your money with them.
Credit – Buy Now, Pay Later
Advantages:
✔ You use the item while paying for it.
✔ Helps with large purchases like houses or cars.
Disadvantages:
✘ Encourages overspending.
✘ Interest makes items more expensive.
✘ Risk of getting into debt.
Where to Get Credit:
- Credit cards: Spend now, pay later. High interest if not paid monthly.
- Loans: From banks, credit unions, or building societies. Paid back weekly/monthly with interest.
- Bank overdraft: Spend more than you have, but interest is charged.
- Hire purchase: Pay for items in instalments. You don't own the item until it's fully paid.
Home Filing System
A home filing system keeps all important family paperwork organised, e.g. passports, bills, receipts, school reports, and bank statements.
Advantages of a Home Filing System
✔ Bills are paid on time (not forgotten or lost).
✔ Saves time – everything is in one place.
✔ Guarantees and receipts are ready if you need them.
✔ Compare past and present bills.
✔ Monitor school progress year to year.
