HOUSEHOLDS

BY AEHREN SALUJA , KABIR PANDEY

SPENDING

• INFULENCES ON SPENDING – THE MAIN INFLUENCE ON THE

AMOUNT SPENT BY A PERSON OR HOUSEHOLD IS DISPOSABLE
INCOME. AS INCOME RISES , PEOPLE USUALLY SPEND MORE IN
TOTAL , BUT LESS PERCENTAGE OF THEIR INCOME . OTHER
FACTORS INFLUENCES THE AMOUNT OF EXPENDITURE ARE
WEALTH , CONFIDENCE , THE RATE OF INTEREST , AND
ADVANCES IN TECHNOLOGY .
SPENDING

INCOME AND CONSUMPTION – PEOPLE EATHER SPEND OR SAVE

THEIR DISPOSABLE INCOME . WHEN PEOPLE ARE VERY POOR ,
THEY CANNOT AFFORD TO SAVE . WHEN PEOPLE SPEND MORE
THAN THEIR INCOME , THEY ARE SAID TO BE DISSAVING . AS
INCOME RISES PEOPLE ARE ABLE TO SPEND AND SAVE MORE .
APC

THE AVERAGE PROPENSITY TO CONSUME IS THE PROPORTION OF

INCOME PEOPLE SPEND. IT IS CALCULATED BY THE CONSUMPTION
DIVIDED BY THE DISPOSABLE INCOME.
DISPOSABLE INCOME AND CONSUMTION
SAVING

• REASIONS FOR SAVING – PEOPLE WHO SAVE MONEY ARE

CALLED TARGET SAVERS. THIS MEANS THAT THEY SAVE TO GAIN
A PARTICULAR SUM OF MONEY FOR DIFFERENT PURPOSES.
PEOPLE SAVE MONEY FOR MANY REASONS SUCH AS SAVING FOR
A CAR, HOUSE, THEIR RETIREMENT, CHILDREN’S FUTURE ETC.
SAVING

INFLUENCES ON SAVING –
• INCOME (SAVINGS RATIO)
• WEALTH
• RATE OF INTEREST
• TAX TREATMENT OF SAVINGS
• AGE STRUCTURE
• SOCIAL ATTITUDES
APS

THE AVERAGE PROPENSITY TO SAVE IS THE PROPORTION OF

HOUSEHOLD DISPOSABLE INCOME THAT IS SAVED. IT IS
CALCULATED BY DIVIDING THE SAVINGS BY THE DISPOSABLE
INCOME.
DISPOSABLE INCOME AND SAVING
BORROWING

• BORROWING MOVES INCOME FROM PEOPLE WHO DO NOT WANT

TO SPEND IT NOW TO THOSE WHO NEED MORE MONEY THAN
THEY CURRENTLY HAVE .
• AFFECTS ON BORROWING – THE AVAILABILITY OF LOANS AND
OVERDRAFTS , THE RATE INTEREST , CONFIDENCE AND SOCIAL
ATTITUDES
SCHEDULE
THANK YOU