Expense refers to the cost incurred or money spent by an individual, business, or organization to obtain goods or services. In Class 9, expenses are explained as the outflow of money used to meet daily needs, run a business, or maintain assets. Expenses can be recurring, like rent and salaries, or occasional, like repairs and purchases.
What is Expense Class 9 Notes
Money Going Out
The Money ‘Going out’ refers to the expenses which we spend for the needs and wants. The money going out is otherwisecalled expenses. These expenses are categorised into two types: fixed and variable.
Fixed expenses: There are some expenses which you are spending every month, like house rent, mobile recharge, etc. These monthly expenses are fixed and do not change based on usage. This helps to plan their budget because we know exactly how much money we have to spend every month.
Variable expenses: There are some expenses which may change depending on how much you use something. For example, if you stay out for 10 days, then your electricity bill charges will be lower. These expenses can give you more control because you can reduce them by changing your habits. Some examples of variable expenses are going to the movies or eating out with friends.
Cash Management
Cash management means how you are handling the money you have earned or spent; this cash management is also known as cash flow. There are some tools available to help you to manage your money. One of the best tools is a budget tool.
A budget is a statement indicating income on one hand and how the income is allocated to various fixed and variable expenses. It indicates the ‘money coming in’ and the ‘money going out’ in detail so that you are aware of how your income is being spent and how you may control your expenses if needed.
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Building Your Own Budget
Budgeting is your roadmap to achieving your goals. When you manage your spending wisely, you can make smart and planned decisions about how to use your money. If your income is limited in that condition, a budget is important. It helps to think carefully about how to spend your money.
P.Y.F. (“Pay Yourself First”)
P.Y.F. stands for “pay yourself first”. P.Y.F. means saving money before spending it. Just like how you are paying a bill. P.Y.F. is helpful for reaching your goals faster and builds discipline and good money habits.
How to do it?
Every month or every time you earn money, first keep a fixed amount aside for saving. Don’t wait till the end of the month; use a simple motto: save first and spend later. There are many business leaders like Tata, Birla and Ambani who became successful by planning and managing their money wisely.
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