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Money Issues - Making your Money Grow

BlackboardBy the end of this Unit you will be able to:

  • Income & expenses
  • Profit, loss, surplus & shortfall
  • Draw up a budget

Topic 1: Income and expenses

Income refers to all the money we have coming in that we can spend.

Most people who work get the bulk or biggest part of their income from their salaries. What we earn is usually dependent on what job we do. People with better education and qualifications tend to earn higher salaries than people with no qualifications or little education. We use the words “skilled” and “unskilled” to describe different types of workers. Skilled workers are trained to do certain jobs, whereas unskilled workers tend to need less education. Unskilled workers often do work that requires physical labour such as gardening or carrying heavy loads, whereas skilled workers use their minds more, such as teachers and doctors. Society needs both skilled and unskilled workers.

Did you know?

Comparison of Salaries
Look at the difference between people with a Grade 4
education and a Doctor who has studied at University for seven years.

Average Salary per month Category of worker Average level of Education
R 2 500 (Gauteng) Unskilled - labourer Grade 4
R 3 500 Semi-Skilled shop assistant Grade 10
R 4 500 Skilled - Nurse Aide Grade 12
R 7 000 Skilled - Nurse Diploma (4 years)
R14 000 Skilled Doctor Degree  (7 years)

As you can see from the average salaries above (relevant for 2008) level of education makes a big difference as does level of responsibility in terms of what people earn.

Talking Point!

Do you think people should get such different salaries? In South Africa the top person in an organisation, called the Chief Executive Officer gets more than 50 times the salary of the lowest paid worker. In some other countries such as Japan the difference is only about twenty times. Which do you think is fairer? Think of the level of education and how much responsibility these types of workers have.


Word Box:

Skill:   A certain talent or ability to do something, usually implying a certain level of education.
Charity:  An organisation that helps others
Donation:   money that is given for a good cause


Talking Point:

Many charities exist only as a result of donations from the public. Do you think everyone who possibly can, should give to charities? Which would you rather support:-

  • An organisation helping AIDS orphans
  • A home for abused women
  • An organisation that provides hearing aids for deaf children
  • A group teaching township dwellers to grow their own vegetables

What would you base your decision on?


Now we are going to look at another source of income that many people in South Africa depend on for a regular income. These are Government Grants.

Did You Know?

The Social Grant system in South Africa supports 13 million people. As of April 2009, the maximum values of the old age, disability and care dependency grants will rise by R50 to R1 010 a month, while the foster care grant and child support will also increase by R30 to R680 and R10 to R240 a month, respectively.

The spending on social grants is tabled to increase to R80 billion for 2009/10, and will amount to about 12 percent of total government spending making South Africa one of the world’s biggest social grants spenders.

This means that many people in South Africa are living very poverty stricken lives with extremely limited amounts of money available to spend on basic necessities.

However whether you rely on the basic social grant money to get you through a month or are fortunate to earn a reasonable salary; you will have a certain income and certain expenses.  Both income and expenses may vary slightly from month to month but it is important that you always have a clear idea of what your income and expenses are.

Now we are going to look at an Income and Expenses statement. This will help you to understand these ideas more clearly

Expenses refer to the items we have to spend money on. In families and households this amount will vary enormously depending on the number of people in the household, what education costs, and how much accommodation costs amongst other items.

We have already looked at the idea of a budget. A budget is a way of making sure our expenses do not exceed our income.

Income and expenses apply not only to households and families or individuals but also to projects as different as hosting a sport’s tournament or staging a Church outing and building a house.

Topic 2: Profit, Loss, Surplus and Shortfall

The difference between the Income and Expenses of an event that was held to raise money, such as a concert or sporting event, can be referred to as a Profit or a Loss. A Profit means the Income is greater than the Expenses – in other word there is money left over. A Loss is when the Expenses are greater than the Income – this means we do not have enough money to cover the expenses –we have lost money.

When we are not trying to raise money but merely working out the Income and Expenses of a project such as building a house or going on an outing, we refer to the amount of money left over after all our expenses have been paid as a surplus (extra money). When the Expenses are greater than the Income then we have a shortfall – we do not have enough money to meet our expenses.

Activity 1: Working it out...


The Siyamune Literacy Group decide to have a celebration when all their members reach ABET Literacy Level 2. There are 50 members. Each member has saved R10 a month for 10 months so they can each contribute R100. (Total = R5000)

In addition they ask the NGO, “Each One Teach One” that has helped them a great deal to make a contribution. The Director, Ms Lulama Mavela makes a donation of R1000.

In your pairs look at the table below and answer the questions that follow.



Rent of Community Hall


Total Food






Sound System


Total Drinks


  • What is the total of the Expenses?
  • What is the total of the Income? (Draw a small Table showing this).
  • What is the total amount spent on Food and Drinks?
  • Which total is larger – the Income or the Expenses?
  • Did the event have a surplus or a shortfall?
  • How big was the surplus or shortfall? 
  • In your pairs decide what charity you would give any money left over to. Give reasons for your choice.
  • Make a poster advertising the event. Make it as colourful and attractive as possible.

We have so far learnt quite a few new words that have to do with money. Let’s have a quick Quiz to see how well you understand all these words.

Activity 2: What is the correct word?

Fill in the correct word from the list below in the sentences that follow:

profit  loss surplus
budget  total  expenses
income  shortfall donation
  1. Suraya collected R45 to give as a a charity that helped babies who were born HIV Positive.
  2. Ma Unathi asked her daughter to save what she could and cut down on her monthly ................ so that they could afford to send Thabo to a crèche.
  3. Mr Jabulani started a business selling computers that made R5000 the first month.
  4. The Solilo family decided to draw up a ............showing what they could spend for their child’s naming ceremony.
  5. Ms Zondi had an amount of R250 000 to build her new house but it cost R300 000 so she had a ........of R50 000. 
  6. The Wembezi fruit seller’s had a small stall where their ......... were R1000 and they sold fruit for R1200 so they had a surplus of R200 left over.
  7. The .......cost of school fees in the Guzuba household is R550 per month.
  8. The Kick Harder Soccer club sold 200 tickets at R50 a ticket for one match and their expenses came to R800 so they made a ......of R200.
  9. Anele spent R650 on items to make sandwiches to sell at the Eat Some More Tuck-shop, He only sold 60 sandwiches at R10 each so he made a ..... of R50.
  10. Jane had to leave school in Grade 2 so she has to work as an.............labourer and does not earn very much money.

Topic 3: Drawing up a Budget for an outing

In this section we are going to look at how you would draw up a budget for a Self Help Group outing. Often when an event like a group outing is being planned, a smaller group of people might be asked to form a committee to investigate different aspects such as where to go, what to eat, what transport to use, how much to spend and so on. In a committee like this the person responsible for all the money aspects is usually known as the Treasurer. Such a person would be responsible for drawing up an Income and Expenses Statement and for collecting all the money. In the activities that follow you will all get a chance to work out the budget and make financial decisions.

Activity 3.1: The Outing: Planning
Small Groups

Imagine you are a group of women who belong to a Self Help Group who meet at Mpumalanga Methodist Church Hall in rural Kwa Zulu Natal. Your facilitator suggests an outing as a way of celebrating the group’s third year anniversary..

In your small groups, brainstorm some ideas for where you want to go and what sort of outing you want. Put down all your ideas and discuss the pros and cons of each one. Finally you need to decide on one idea. Write this down.
Now compare your idea with that of the other groups and make a decision as a group. 

Let us imagine that you have decided that you want to go to picnic site, twenty five kilometres way where you will all have a Braai.  There are 40 women in your group and you will be accompanied by two facilitators.  Below is a list of prices for a variety of items and expenses you will need to meet.

List of Prices:

Transport: - 20 seater Minibus; R500 per 50 kilometres
Food: - Braai packs; R40 per pack
Rolls: - R20 per 20 -  will need two per person for the day
Fruit: R15 per one bag of 40 oranges; R20 per one bag of 40 apples
Drinks: - R3.50 per 350 ml Juice – will need three per person for the day
Hire of picnic site and Braai stands: - R250

Donation by a bookseller, Vivlia Publishers: R250
Donation by retired facilitator, Ms Sithole: R350
Contribution by each learner: - R30
Contribution by each facilitator: R100

Activity 3.2: The Group Outing: What will it cost?
Small Groups

In your small groups work out the following:-Write down the answer to each question.

  • What is the total amount needed for transport?
  • What is the total amount needed for food?
  • What is the total amount needed for drinks?
  • What is the total amount needed for the day? (Remember to include the price for the Picnic site and Braai stands).
  • What is your total income?
  • Do you have a surplus or a shortfall?
  • What is the amount of this surplus or shortfall?
  • If it is a shortfall, discuss how you might get extra money.
  • If it is a surplus, discuss what you would do with the extra money.


Self Assessment Checklist

  • I can now understand the difference between income and expenses
  • I can now describe the difference between profit and loss; surplus and shortfall
  • I can now draw up a budget for a group outing
  • What did you enjoy most about this Unit?
  • What did you enjoy the least about this Unit?