CONSUMER STUDIES: IN-DEPTH STUDY NOTES
THE CONSUMER
Chapter 1: Income and Expenditure of South African Households
1.1 Income:
• Definition: Money received by a household or individual on a regular basis.
• Types of income:
o Data: Information such as statistical data which is given in numbers.
o Statistics: a collection of information that interprets facts.
o Financial income: The money that a person of family receives within
specific period.
o Non-financial income: products and services that a person or family
receives without using money, sometimes by exchanging something
else.
o Expenditure: The total money spent on goods and services.
o Expenditure patterns: the typical ways in which consumers spend
money in goods and services.
o Basic Necessities: water, food, shelter, clothing for survival.
o Formal income: Earned from employment (e.g., salaries, wages).
o Informal income: Earned through informal or unregistered jobs (e.g.,
selling fruit, doing hair).
o Unearned income: Not earned through work (e.g., grants, pension,
interest from savings).
1.2 Factors Influencing Income:
• Level of education
• Skills and work experience
• Type of job or profession
• Location (rural or urban)
1.3 Expenditure:
• Definition: Money spent by a household on goods and services.
• Fixed expenses: Rent, car payments, school fees.
• Variable expenses: Food, clothing, transport.
• Discretionary expenses: Entertainment, gifts.
1.4 Socio-economic issues affecting income and expenditure in South Africa:
• High unemployment rate
,• Poverty and inequality
• Social grants (child support, old age)
• Gender wage gap
, Chapter 2: The Household Budget
2.1 Definition:
• A budget is a financial plan that outlines income and expenses over a specific
period.
• Saving refers to the act of putting money aside instead of spending it, usually
to use it later. It is a key concept in personal finance and household
budgeting.
• Net income is the amount of money a person or household has left after all
deductions have been made from their gross income.
• Fixed expenses are costs that stay the same amount every month (or at
regular intervals). These are regular, predictable payments that you must
pay regardless of how much money you earn or spend that month.
• Variable expenses are costs that change from month to month depending on your
usage, lifestyle, or choices. These are not fixed amounts they can increase or
decrease.
2.2 Purpose of a budget:
• Helps control spending
• Ensures priorities are met
• Encourages savings and debt management
2.3 Steps in drawing up a budget:
1. Record all sources of income
2. List all monthly expenses
3. Differentiate between needs and wants
4. Allocate funds to each category
5. Adjust as necessary
6. Evaluate regularly
2.4 Budgeting tips:
• Use envelopes for different spending categories
• Track your spending
• Set financial goals
• Save for emergencies
THE CONSUMER
Chapter 1: Income and Expenditure of South African Households
1.1 Income:
• Definition: Money received by a household or individual on a regular basis.
• Types of income:
o Data: Information such as statistical data which is given in numbers.
o Statistics: a collection of information that interprets facts.
o Financial income: The money that a person of family receives within
specific period.
o Non-financial income: products and services that a person or family
receives without using money, sometimes by exchanging something
else.
o Expenditure: The total money spent on goods and services.
o Expenditure patterns: the typical ways in which consumers spend
money in goods and services.
o Basic Necessities: water, food, shelter, clothing for survival.
o Formal income: Earned from employment (e.g., salaries, wages).
o Informal income: Earned through informal or unregistered jobs (e.g.,
selling fruit, doing hair).
o Unearned income: Not earned through work (e.g., grants, pension,
interest from savings).
1.2 Factors Influencing Income:
• Level of education
• Skills and work experience
• Type of job or profession
• Location (rural or urban)
1.3 Expenditure:
• Definition: Money spent by a household on goods and services.
• Fixed expenses: Rent, car payments, school fees.
• Variable expenses: Food, clothing, transport.
• Discretionary expenses: Entertainment, gifts.
1.4 Socio-economic issues affecting income and expenditure in South Africa:
• High unemployment rate
,• Poverty and inequality
• Social grants (child support, old age)
• Gender wage gap
, Chapter 2: The Household Budget
2.1 Definition:
• A budget is a financial plan that outlines income and expenses over a specific
period.
• Saving refers to the act of putting money aside instead of spending it, usually
to use it later. It is a key concept in personal finance and household
budgeting.
• Net income is the amount of money a person or household has left after all
deductions have been made from their gross income.
• Fixed expenses are costs that stay the same amount every month (or at
regular intervals). These are regular, predictable payments that you must
pay regardless of how much money you earn or spend that month.
• Variable expenses are costs that change from month to month depending on your
usage, lifestyle, or choices. These are not fixed amounts they can increase or
decrease.
2.2 Purpose of a budget:
• Helps control spending
• Ensures priorities are met
• Encourages savings and debt management
2.3 Steps in drawing up a budget:
1. Record all sources of income
2. List all monthly expenses
3. Differentiate between needs and wants
4. Allocate funds to each category
5. Adjust as necessary
6. Evaluate regularly
2.4 Budgeting tips:
• Use envelopes for different spending categories
• Track your spending
• Set financial goals
• Save for emergencies
