QUESTION 1
Read the passage below and answer the questions that follow.
Lindiwe learned that the 50/30/20 budgeting method puts 50% of your income into
essential bills, 30% into "fun" or luxury spending, and 20% into savings or debt. She
then planned her family budget based on this rule. She is an entrepreneur and makes
R30 000.00 per month. Her husband eams R24 000.00. Their family budget includes
lights and water, house bond, school fees, credit card payment, transport, groceries,
insurance and stokvel, 'black tax', dining out and holidays.
[Examiner's extract]
1.1
Calculate Lindiwe's total monthly income.
1.2
Define the term budget.
1.3
Using the 50/30/20 rule above, help Lindiwe to plan her monthly family budget
by using the following table:
Planning category
50% essential bills
Total amount Any TWO Examples of expenses per
category
30% luxury spending
20% savings or debt
1.4
1.5
Identify TWO non-essential expenses from the extract above.
How would you advise Lindiwe to save a portion of her family income for
future use?
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