Income & Expenditure in SA Families PDF

Incomes and Expenditure of South African Families  Types of income: Watch intro documentary: https://www.youtube.com/watch? v=9vscXNIyf7s Non- financial income: refers to products or services that a household gets by exchanging something other than money. Examples:...

Incomes and Expenditure of South African Families  Types of income: Watch intro documentary: https://www.youtube.com/watch? v=9vscXNIyf7s Non- financial income: refers to products or services that a household gets by exchanging something other than money. Examples: - doing your own work around the house so you don’t to pay for it - any products a household produces itself, like growing your own vegetables - benefits: a household receives - free food, accommodation - promotes good buying practises like buying on special/promotions  Financial income: is the money (in Rands) the a person or household receives within a specific period (like a month/week). Expendit ure patterns of South African househol ds  What influences expenditure patterns? Household spending is an important factor that affects a country’s economic growth and development. Many factors influence SA’s expenditure pattern. The socio-ecomonic position of individuals and households: Low income groups –mostly only spend on basic necessities. Middle income groups– have more money to spend on food, education, housing and a good life style. Middle-high income groups – spend more on luxury goods and services. High income groups – spend even more money on wants and ultra luxury items. Types of households and the stages of the family cycle: Families with children spend a large portion of their income on school fees, coaching, transport, activities Families whose children have left the house, have more money to spend on themselves and their hobbies, travelling Young people who live by themselves have money to spend on entertainment and hobbies.  Age: People in the 20-24 age group may spend more on electronics, home appliances, entertainment. People in the 45-48 age group may spend more on vacations. Peer group pressure & the media – influence how different age groups spend their money. Other factors influencing expenditure patterns: Cultural/ population groups – cultural & religious practices affects the types of products and services people buy. Residential area – you need less money to live in a cheaper residential area than you need to live in a more expensive area. In expensive areas things like property tax, home insurance and maintenance cost more. Inflation – when inflation rises, people have less money. Therefore, spend less on luxury items. Interest rates – when interest rates rise the cost of credit increases and monthly repayments (eg: home loan) could increase a lot. Changing attitudes towards consumption, changes in price, new products, higher expectations and growing brand consciousness and people moving cities all influence expenditure patterns. Household expenditure patterns in South Africa Page 12  Figure 1.2 shows the following: Expenditure was highest in housing, water, electricity, gas and fuel. The second largest expense is transport. Food and non-alcoholic beverages was the 3rd biggest expense group. Other goods and services on which smaller amounts were spent were furnishings, household equipment and routine home maintenance. Even less was spent on clothing, footwear and recreation, cell phones, restaurants, and hotels. Interestingly education and health (excluding medical aid- seen as an insurance) are among the lowest expenditure groups.