Skip to content Skip to navigation Skip to collection information

OpenStax_CNX

You are here: Home » Content » Economic and Management Sciences Grade 5 » Drawing up a budget

Navigation

Lenses

What is a lens?

Definition of a lens

Lenses

A lens is a custom view of the content in the repository. You can think of it as a fancy kind of list that will let you see content through the eyes of organizations and people you trust.

What is in a lens?

Lens makers point to materials (modules and collections), creating a guide that includes their own comments and descriptive tags about the content.

Who can create a lens?

Any individual member, a community, or a respected organization.

What are tags? tag icon

Tags are descriptors added by lens makers to help label content, attaching a vocabulary that is meaningful in the context of the lens.

This content is ...

In these lenses

  • GETIntPhaseEMS display tagshide tags

    This collection is included inLens: Siyavula: Economic and Management Sciences (Gr. 4-6)
    By: Siyavula

    Collection Review Status: In Review

    Click the "GETIntPhaseEMS" link to see all content selected in this lens.

    Click the tag icon tag icon to display tags associated with this content.

Recently Viewed

This feature requires Javascript to be enabled.

Tags

(What is a tag?)

These tags come from the endorsement, affiliation, and other lenses that include this content.
 

Drawing up a budget

Module by: Siyavula Uploaders. E-mail the author

ECONOMIC AND MANAGEMENT SCIENCES

Grade 5

LOOK BEFORE YOU LEAP

Module 11

DRAWING UP A BUDGET

  1. (a) Problem 1: You receive R50, 00 pocket money per month. You feel that it is much too little, as you have to buy stationery, toiletries, gifts for friends and sweets with the money!

Assignment 1

Set up a budget to persuade your parents that your pocket money has to be increased and suggest a more acceptable amount.

BUDGET:

Table 1
      Amount
  Income – pocket money    
  Expenditure    
a) Stationery    
  i)    
  ii)    
  iii)    
  iv)    
b) Toiletriesi)    
  ii)    
  iii)    
c) Gifts    
  i)    
  ii)    
  iii)    
d) Sweets    
  i)    
  ii)    
    Underline Surplus/Shortfall  

[LO 3.4]

Background

If your pocket money is not increased, you will not be able to pay all your accounts. Your debt will therefore exceed your budget. This results in an accumulation of debt. What implications will this have in the business world?

  • Your name might be handed over to the credit bureau (a system that is accessible to all banks or businesses to evaluate your credit-worthiness).
  • You may be handed over to debt collectors and some of your assets may be sold to pay your debts.
  • You may be declared insolvent.
  • Your health may suffer on account of it.

Assignment 2

If your parents cannot afford to give you more than R30, 00 for pocket money per month, which expenditure will you cut back on to balance your budget? Draw up a new budget by leaving out any items that you regard as unnecessary.

Background

To balance your budget means to spend an amount equal to or less than your income.

Table 2
      Amount
  Income – pocket money   30,00
  Expenditure    
a) Stationery    
  i)    
  ii)    
  iii)    
  iv)    
b) Toiletriesi)    
  ii)    
  iii)    
c) Gifts    
  i)    
  ii)    
  iii)    
d) Sweets    
  i)    
  ii)    
    Underline Surplus/Shortfall  

[LO 3.4]

(b) Problem 2: Household budget:

Your parents are working for a living (an income) because they also have expenses that they have to pay. This expenditure can be fixed expenditure (not varying, a fixed monthly amount) or variable expenditure (which increases according to how much is used.)

Assignment 3

Group the following types of expenditure in the appropriate column: instalments to pay for house; telephone rental; water account; domestic worker’s pay; electricity account; clothing account that is being paid off; gardener’s pay; cash groceries; pocket money; expenditure on recreation; fuel.

Table 3
Fixed expenditure Variable expenditure
   
   
   
   
   
   
   
   
   
   
   
   
   

Problem: Are you allowed to work to earn pocket money?

Assignment 4

Read the newspaper article provided below, which was published in Die Rapport of 10 February 2002 (translated).

CHILD LABOURER ‘NOT ANGRY’

She cannot skip rope with her friends after school in the afternoons any longer. She has also had to say farewell to cross country, the sport in which she used to excel. But Waronice van Wyk (13) is not angry any more, just frustrated because she now has to play at home alone every weekend.

“Sometimes I forget that my leg is not there, because I have become used to the artificial leg,” she says.

And the chances that she will allow you to see her artificial leg are nil, because Waronice constantly wears long pants “so that people cannot see what my leg looks like”.

The leg that she refers to is her right leg, which was amputated just below the knee. She lost the leg in an accident on 20 December 1999, while she was working as an eleven-year old on a farm just outside Ceres in the Boland.

This is against the law and this accident has opened the door for the department of labour to commence a test case against the owners.

Waronice’s story hit the headlines and has placed emphasis on child labour on South African farms.

During the past week, the court has found the company, Daytona Stud Farms (Pty) Ltd, guilty on a count of having employed children younger than fifteen years. The company was handed a fine for R25 000, of which R 10 000 was suspended for four years.

Waronice, who is in grade 8 now, fell between a tractor and a trailer and was dragged along for more than 25 m.

She remembers, “We were tired of working. We then decided to take a lift home on the tractor. Nobody told us that we were not allowed to ride on the tractor.”

She lost her balance when the tractor drove through a pothole.

Waronice was one of a group of children whose parents had asked whether their children could work on the farm for pocket money during the school holidays. All of them earned R6 for a “half day” and R15 for a “whole day” for packing peaches.

Mr Mike Barnard, who appeared on behalf of the company, said during the week in court that although he knew about the law on child labour, he had not been aware of the “broad definition” of it.

Extenuating circumstances put forward by the farm management held that Waronice had been taken to hospital after the accident and that the farm had paid for the artificial leg.

The court further heard that the company had established a Waronice Trust Fund and that this has already reached R20 000.

A civil case could still be instituted against the company.

In the meantime Waronice says that she is not angry with anyone. Although she cannot take part in sport any more, she can still listen to music.

Mr Nicholaas Bezuidenhout, Waronice’s grandfather, says, “ I feel that the law has taken its course. I am not angry with the owners of the farm. We cannot afford to hate the people.”

From: Rapport, 10 February 2002

What is your opinion with regard to child labour / working to earn pocket money?

Although there are laws prohibiting child labour, many in South Africa who are under the age of 15 have to work to earn money to support their families.

Discuss each of the following situations and decide whether they are acceptable or not. Write down your reasons.

Situation A: John delivers newspapers in the early morning. He saves the money that he earns so that he will be able to go to university one day.

Situation B: Carina’s parents cannot afford to keep her at school. She left school and started working in a butchery to help support her family.

[LO 2.2]

  1. (a) Problem 3: What do you do with excess money?

Background

Complete: Excess money that you invest for later use is called ......................

Doing this is good, because it ensures that you have money for emergencies, to provide security and for a living when you are not able to work any longer.

There are two main ways in which to save. You can save your money in a piggy bank at home, or you can open a savings account with a financial institution.

Assignment 5

Which way of saving is the best? Motivate your answer.

Background

Money can be saved in the post office, a bank, a building society and in community based banking facilities.

In these institutions, your money can earn interest and will therefore increase gradually.

Assignment 6

What is interesT?

(Suggestion: Use a dictionary.)

[LO 3.4]

Figure 1
Figure 1 (graphics1.png)

  1. (a) Problem 4:

Your parents are willing to deposit R150, 00 monthly in your savings account at a local bank. You may withdraw R50, 00 of this money as pocket money per month, but the remaining R100,00 must earn interest, so that you will be able to pay the deposit for the scooter that you want to ride to school one day.

Assignment 7

List all the banks in your city / town (five at most). Delegate five learners – one per bank – to find out at which bank your money would earn the highest interest.

Table 4
Name of bank Interest rate Banking costs per transaction
1.    
2.    
3.    
4.    
5.    

[LO 3.3]

When money is deposited in a bank and is withdrawn later, interest is calculated on the daily balance (final amount). Computers are usually used for these calculations.

Instruction to the teacher: Invite representatives from local banks to come and talk to the learners about the different savings or banking facilities that are available from the banks.

Assignment 8

At which bank would you open a savings account? Motivate your decision with at least four sound reasons.

[LO 3.3]

Assignment 9

You have just celebrated your birthday and were given R230, 00 in cash. You want to deposit this in your savings account. Fill in the bank deposit slip correctly and paste it below.

Banks use the money that we save to invest in other businesses or to buy buildings and land. In this way banks “grow “ our money. When you save your money in a bank, you therefore get more money in return.

[LO 3.3]

Assessment

LO 2

SUSTAINABLE GROWTH AND DEVELOPMENT

The learner will be able to demonstrate an understanding of sustainable growth, reconstruction and development, and to reflect on related processes.

We know this when the learner:

2.2 explains the concept of economic growth and development, and its impact on the development of communities and society;

LO 3

MANAGEMENT, CONSUMER AND FINANCIAL KNOWLEDGE AND SKILLS

The learner is able to apply and demonstrate, in a responsible manner, knowledge as well as a range of management, consumer and financial skills.

We know this when the learner:

3.1 participates and demonstrates some management and leadership roles in the classroom and home in the absence of adults;

3.3 finds out and discusses how a savings account is opened at a bank, and completes deposit and withdrawal slips;

3.4 discusses the value of savings and thrift and people’s difficulty in saving if basic needs are not met.

Memorandum

Assignment 1

  • Every learner must draw up a budget for certain expenditures. The different kinds of expenditures must be qualified by examples. They may use pocket calculators.

Can differ, but the expenditure must just exceed the income and a deficit must be shown. Hint: Use rounded off amounts.

  • √ more than R50,00Expenditures: Total amount R75,00

(a) Stationery

(i) pencil R3,00

(ii) eraser R4,00

(b) Toiletries

(i) deodorant R8,00

(ii) shampoo R14,00

(c) Birthday presents

(i) Elisma R15,00

(ii) Adri R15,00

(d) Sweets

(i) Tuck shop R16,00

  • Deficit R25,00

  • 10Neatness

Assignment 2

  • The consequences of accumulation of debt and the fact that one’s expenditures exceed one’s income, are discussed with the class. The importance of drawing up a budget so that debt will not accumulate, is brought to the learners’ attention. Thereafter the learners can solve the problem. A pocket calculator may be used.

Same as Assignment 1, Total amount R28,00 (less than R30)

At least three items, but not more than five.

Totals rounded off

10Surplus R2,00

Neatness

Assignment 3

The difference between fixed and variable expenditure is explained to the learners. They complete Assignment 3 individually thereafter.

Table 5
Fixed Variable
Home instalment (do together as class) Water account
Telephone Electricity account
Domestic worker’s wage Cash groceries
Pocket money Recreational expenditures
Clothing account that you arepaying off Fuel consumption
   

Assignment 4

The problems surrounding child labour can spark a lively debate and each learner’s point of view can be taken into account. The acceptability or otherwise of certain situations can then be considered.

Opinions can differ.

Situation 1 – acceptable

Situation 2 – unacceptable

Assignment 5

The importance of saving, as well as different ways of saving one’s money, is emphasised. Then the best way of saving can be deduced.

Savings account: advantage – money earns interest

disadvantage – must pay banking charges

Money box: disadvantage – can be stolen; easy access to money

Assignment 6

The concept interest can be explained to the learners before they do the assignment.

Return on loaned or invested money, compensation by bank because they may use your money for their investments.

Assignment 7

A delegation of learners can be sent to different banks to gather information on interest rates and banking charges. Only one learner per grade group should go to one bank to source the information. He/she can then pass the information on to the other grade groups. Answers can differ.

Assignment 8

Learners must only deduce that different banks offer different interest rates, and that banking charges differ. As long s a learner can justify with good reasons why he/she has chosen a specific bank, all answers are acceptable. Answers can differ.

Assignment 9

  • Learners have the opportunity to fill in a bank deposit slip. The teacher can explain how it is done to the class beforehand. Deposit slips of various banks can be filled in, so that learners can deduce the basic information that is required by each bank (and that needs to be filled in on the slips). Example of deposit slips and mark allocation

Collection Navigation

Content actions

Download:

Collection as:

PDF | EPUB (?)

What is an EPUB file?

EPUB is an electronic book format that can be read on a variety of mobile devices.

Downloading to a reading device

For detailed instructions on how to download this content's EPUB to your specific device, click the "(?)" link.

| More downloads ...

Module as:

PDF | EPUB (?)

What is an EPUB file?

EPUB is an electronic book format that can be read on a variety of mobile devices.

Downloading to a reading device

For detailed instructions on how to download this content's EPUB to your specific device, click the "(?)" link.

| More downloads ...

Add:

Collection to:

My Favorites (?)

'My Favorites' is a special kind of lens which you can use to bookmark modules and collections. 'My Favorites' can only be seen by you, and collections saved in 'My Favorites' can remember the last module you were on. You need an account to use 'My Favorites'.

| A lens I own (?)

Definition of a lens

Lenses

A lens is a custom view of the content in the repository. You can think of it as a fancy kind of list that will let you see content through the eyes of organizations and people you trust.

What is in a lens?

Lens makers point to materials (modules and collections), creating a guide that includes their own comments and descriptive tags about the content.

Who can create a lens?

Any individual member, a community, or a respected organization.

What are tags? tag icon

Tags are descriptors added by lens makers to help label content, attaching a vocabulary that is meaningful in the context of the lens.

| External bookmarks

Module to:

My Favorites (?)

'My Favorites' is a special kind of lens which you can use to bookmark modules and collections. 'My Favorites' can only be seen by you, and collections saved in 'My Favorites' can remember the last module you were on. You need an account to use 'My Favorites'.

| A lens I own (?)

Definition of a lens

Lenses

A lens is a custom view of the content in the repository. You can think of it as a fancy kind of list that will let you see content through the eyes of organizations and people you trust.

What is in a lens?

Lens makers point to materials (modules and collections), creating a guide that includes their own comments and descriptive tags about the content.

Who can create a lens?

Any individual member, a community, or a respected organization.

What are tags? tag icon

Tags are descriptors added by lens makers to help label content, attaching a vocabulary that is meaningful in the context of the lens.

| External bookmarks