Grade 11 Consumer Studies - Household Budgets

Flashcards about household budgets, consumer rights and managing money.

What is a budget?

A spending plan based on income and expenditure; helps exercise financial control.

Name four aims of budgeting.

Accept income limitations, eliminate wasteful spending, plan for the future, pinpoint spending faults.

What does SMART theory stand for in the context of budgeting?

Specific, Measurable, Achievable, Relevant, and Time Related.

List three principles of budgeting.

Involve all household members, be specific to the family, be realistic, and be flexible.

What is net income?

Total amount earned after deductions.

What are the three categories of expenses?

Fixed, variable, and non-essential/luxury expenses.

What are quintiles in the context of income and expenditure?

Fifths into which data is divided to represent income distribution.

What do lower income households spend most of their income on?

Food and travel.

What do higher income households spend a larger percentage of their income on?

Housing, transport, and education.

Name three factors that influence a family’s spending patterns.

Socio-economic position, family life-cycle stages, culture and religion, inflation, interest, and location.

How does inflation affect spending?

It reduces purchasing power, meaning less can be bought with the same amount of money.

What is the Consumer Price Index (CPI)?

A tool used to calculate the annual inflation rate by reflecting changes in the price of a basket of goods and services.

What is the purpose of savings?

Preserving and growing your money, often suited for short term goals.

What is the purpose of insurance?

Protection against possible future events.

Why is it important to start saving for retirement early?

Starting early means investing less monthly with better investment growth over the long term.

What is the approximate old age grant amount in South Africa (January 2025)?

R2180.00 for pensioners younger than 75 years old and R2200.00 for those over 75.

What is a financial advisor?

A professional that can help you to reach your financial goals as efficiently as possible.

Give two examples of tools that can be used for financial planning.

Employers Pension Fund, Retirement Annuity, Endowment Policy, Life Insurance, Disability and Dreaded disease Insurance.

What is the Financial Intelligence Centre Act (FICA) designed to prevent?

Fraud and money laundering.

Give three types of bank accounts

Savings account, Current/Cheque account, Money Market account.

What is an EFT?

Electronic Funds Transfer, this is an internet payment.

What is a CVV number used for?

To make a payment using a card for online purchases.

What is phishing?

An email is sent to you requesting account details.

What is credit card?

This is issued by the bank that pays the store and charges a fee for the facility. It is interest free if you pay within a specified period.

What is lay-by?

Unlike other types of credit, this form of credit does not cost extra.

What is consumer education?

Providing skills and information which consumers need to make informed wise choices when purchasing goods and services.

What is The Consumer Protection Act (68 of 2008)?

This act was signed into law on 24 April 2009 and came into effect on 31 March 2011 to protect South African Consumers.

What is Credit Counselling?

This is a service provided for in the National Credit Act to assist over-indebted consumers who are struggling with debt.

What is The National Consumer Tribunal?

This is a credit court- an independent body whose aim is fairness and justice for all in the credit and consumer market.

What is one importance of consumer information by a credit bureau?

If your information reflects that you are a responsible consumer, your interest rate could be lowered.

What is National Consumer Commission (NCC)?

The NCC works within the framework of the Department of Trade and Industry. It is the chief regulator of consumer-business interaction in South Africa and it is responsible for ensuring that the Consumer Protection Act is enforced.

What is a Rental Housing Tribunal?

Rental Housing Tribunals were established under the Rental Housing Act in order to resolve disputes between landlords and tenants.

What is the Advertising Standards Authority of South Africa?

The Advertising Standards Authority of South Africa (ASSAS) is an independent body that aims to ensure that advertising in South Africa is trustworthy.

What is the first tip you should do when making a consumer complaint?

Act as soon as possible.

What is a contract?

A legally valid agreement between two or more parties where an offer is made and terms and conditions are accepted.

What does it mean to breach a contract?

When one of the parties fails to fulfil the obligation that party breaches the contract.

What is a cooling off period?

A period of time in which a consumer can change their mind without penalties.

What are Exclusion clauses?

This is a condition in the contract that indemnifies, alters or limits one or both parties if conditions are not met.