Planning expenditure

• why is planning expenditure important?

  • helps to avoid getting into debt
  • controls costs
  • helps avoid legal action or repossession
  • helps to remain solvent
  • provides a good credit rating
  • helps to avoid bankruptcy
  • helps to manage money to fund purchases
  • helps to generate income and savings
  • provides insurance against loss or illness
• why does planning expenditures help avoid getting into debt?

  1. helps avoid unexpected expenses
  2. ensures you are not over spending and are keeping track of how much money is coming in and out of your account
• why does planning expenditures control costs?

  helps you to adjust your finances
• why does planning expenditures help you to avoid legal action and repossession?

  because without it, finances could be over stretched meaning bills wont be paid and items that are not paid for will be taken from you.
• why does planning expenditures help to remain solvent?

  allows you to meet financial obligations
• why does planning expenditures help give you a good credit rating?

  shows how trust worthy you are to pay your debts which allows you to borrow money easily
• why does planning expenditures help avoid bankruptcy?

  bankruptcy means that you cannot pay off your debts which makes it hard to borrow money again
• why does planning expenditures help you to manage your money to fund purchases?

  allows you to save instead of borrowing money to fund your purchases
• why does planning expenditures help generate income and savings?

  investing helps to generate more income, allowing financial goals and targets to be met.
• why does planning expenditures help provide insurance against loss or illness?

  helps to protect you form unforeseen circumstances. e.g. being made redundant or extreme illness.
• Benefits of planning expenditure

  • Improves credit rating and avoid Debt
  • The savings can help to provide Financial security
• Risks of not planning finances

  • You can get into debt and your credit rating will be poor
  • You will be unable to pay bills and will have no savings