1.4.3 Increase your financial literacy

This online activity is designed to increase your financial literacy level
through a single practical activity. After doing the activity you can expect to be able
to draw up a household budget in a (more) responsible way.

Go through Marie-Elise’ spending list and break them into two groups: essential and non-essential. Identify ways of moving items from the essential list into the non-essential list. Can you identify additional categories of expense not covered by this list or which might be added to the list in the future?

Attempt to answer questions 2 & 3. In so doing, can you identify ways of moving items from the essential list into the non-essential list?

Share your answers with your peers or with a fellow parent, preferably via the blog/ comments section set up for this course.

Questions

1. Marie-Elise overspends each month and she is concerned that her debts are increasing
   significantly.
2. Suggest four changes that Marie-Elise could make to her essential spending to help to
   improve his financial situation.
3. Suggest four changes that Marie-Elise could make to her non-essential spending to help to
   improve her financial situation.
4. Explain how improvements in Marie-Elise’s financial situation would benefit her immediately
   and her long-term financial planning.

Marie- Elise’s Spending List

• Marie-Elise is 25 years old and lives alone in a two-bedroomed house
• She earns a monthly salary working in a full-time job.
• Her typical monthly spending includes:
• Rent for her house
• Council Tax
• Gas & electricity
• Cigarettes
• Designer label clothes
• Food
• Fuel for her car, mainly to get to work and back
• Cafes, pubs & clubs
• Savings for foreign holidays
• Bank overdraft charge