The Consumer
Chapter 1: Income and Expenditure of South African Households
Income Sources:
o Earned Income: Salaries, wages, bonuses, overtime pay.
o Unearned Income: Interest from savings, dividends, pensions,
rental income.
o Government Grants: Social grants, child support grants, disability
grants.
o Other Sources: Freelance work, gifts, inheritances.
Types of Expenses:
o Fixed Expenses: Rent, insurance, school fees (do not change
month to month).
o Variable Expenses: Groceries, entertainment, transport (can
fluctuate).
o Discretionary Spending: Non-essential purchases like luxury
items, dining out.
Factors Affecting Household Spending:
o Inflation increases prices, reducing purchasing power.
o Interest rates affect loan repayments and savings growth.
o Employment status determines income stability.
o Family size affects food, education, and utility costs.
Chapter 2: The Household Budget
Steps in Budgeting:
1. Identify income sources.
2. List all expenses (fixed, variable, discretionary).
3. Allocate money for savings and emergency funds.
4. Track spending and adjust as needed.
Savings and Investments:
o Emergency funds should cover 3-6 months of expenses.
o Investments in stocks, bonds, and retirement funds grow wealth
over time.
Managing Debt:
o Pay off high-interest debt first.
o Avoid unnecessary loans and credit card debt.
Chapter 1: Income and Expenditure of South African Households
Income Sources:
o Earned Income: Salaries, wages, bonuses, overtime pay.
o Unearned Income: Interest from savings, dividends, pensions,
rental income.
o Government Grants: Social grants, child support grants, disability
grants.
o Other Sources: Freelance work, gifts, inheritances.
Types of Expenses:
o Fixed Expenses: Rent, insurance, school fees (do not change
month to month).
o Variable Expenses: Groceries, entertainment, transport (can
fluctuate).
o Discretionary Spending: Non-essential purchases like luxury
items, dining out.
Factors Affecting Household Spending:
o Inflation increases prices, reducing purchasing power.
o Interest rates affect loan repayments and savings growth.
o Employment status determines income stability.
o Family size affects food, education, and utility costs.
Chapter 2: The Household Budget
Steps in Budgeting:
1. Identify income sources.
2. List all expenses (fixed, variable, discretionary).
3. Allocate money for savings and emergency funds.
4. Track spending and adjust as needed.
Savings and Investments:
o Emergency funds should cover 3-6 months of expenses.
o Investments in stocks, bonds, and retirement funds grow wealth
over time.
Managing Debt:
o Pay off high-interest debt first.
o Avoid unnecessary loans and credit card debt.
