Income and expenditure

• Sources of income

  • Financial
  • Non-Financial
• Financial income

  • Income from labour
  • Income from produce
  • Income from investment
  • Retirement income
  • SASSA grants
  • Fringe benefits
  • Casual income
• Salaries/wages

  Money paid weekly/monthly in exchange for labour
• Commission

  To sales persons eg. Estate agent on the sale of a house
• Professional fees

  Charges for services such as medical services
• Bonuses

  Usually a percentage of the employee's annual earnings
• Income from produce

  Payment received when farming produce is sold
• Profit

  An item is sold for more than the original cost
• Interest

  Money obtained from savings accounts, 30 day call accounts
• Dividends

  When you have bought shares in companies and the company shows a profit
• Rentals

  Money from real estate leases
• Endowment Policies

  Money payable from a policy that matures (insured sum plus bonuses)
• Pension

  Employees contribute to this each month of work. At retirement, this money is paid out.
• Retirement Annuity

  A private pension scheme that is contributed to whilst working. Paid out at a specified age, generally as a lump sum followed by monthly payments.
• SASSA grants

  Paid out by the government, funded through taxes
• Criteria for Child Support Grant

  • The primary caregiver of a child who also lives with you in South Africa
  • Children must be under the age of 18
  • Children must not be cared for in a state institution
  • You cannot apply for more than six non-biological or legally adopted children
  • Income must not be more than R48,000 per annum (R4,000) per month for single, or R96,000 (R8,000) combined for married
• Fringe benefits

  Extras that employees receive from employer
• Examples of fringe benefits

  • Medical Aid Contributions
  • Pension Contributions
  • Company Car
• Non-financial income

  Products and services that a family gets by exchanging something other than money
• Non-financial income

  • Do it yourself – housework, gardening, home maintenance, cooking
  • Make/grow it yourself - grow your own vegetables, learn how to sew your own clothes
  • Use public services - libraries, clinics
  • Practise good buying habits – checking prices, look for promotions, buy in bulk
  • Free meals & accommodation, or use of facilities
• What influences expenditure

  • Socio economic position
  • Stage in family life cycle
  • Age
  • Cultural group
  • Residential areas
  • Inflation
  • Interest rates
• Low income group

  Money spent on basic necessities
• Middle income group

  Basic needs, education & children's future, lifestyle goods (sports equipment, brand name clothing etc)
• High income group

  Luxury goods and services (designer clothes, spa treatments, cars, jewellery & holidays)
• Families with school going children

  Spend on school fees, sports equipment, transport
• Empty nest (children left home)

  More can be spent on personal interests, travelling etc.
• Young adults (eg.students)

  More money spent on entertainment and social activities
• 20-24 years old

  Spend on household appliances and electronics, also entertainment
• 44-48 years old

  Spend on going on holiday
• People influenced by peer pressure and by how their age group is targeted by the media
• Cultural group = cultural norms influence what you buy
• Residential areas – more expensive areas have higher rates & taxes etc
• When inflation rises people spend less on luxury items
• When interest rates rise, the cost of credit rises. People have less money to spend on non-essential items
• How SA families spend their money

  • Housing/water/electricity
  • Transport
  • Miscellaneous (household equip, furnishings, home maintenance)
  • Food