General
- P5: Social Studies File Uploaded 31/07/22, 11:23
UNIT 5:Economy
Key Unit Competence: Make a simple family budget and develop a culture of resource
management.
Attitudes and Values: Use resources properly to meet needs. Understand the importance of making a simple family budget.
5.1 What is economy?
Economy is the financial saving to reduce expenditure. It is a careful management of available resources.
Knowledge of economy helps us to plan well for the resources and income we have, in order to meet our present needs and those of the future.
Needs are the basic things we should have, in order to live a better life.
There are two types of needs. These are:
• Basic needs
• Luxurious needs
Basic needs
These are things that we cannot live without, like food, water, clothing and medical care.When planning for our families, we should consider basic needs first.
Luxurious needs
Luxurious needs are things that people can live without. These are the things which make our life easier and more comfortable.Televisions, cars and telephones are luxuries.
Look at the pictures given below.
Activity 5.1
1. Discuss examples of needs in your province.
2. What are basic needs?
3. Identify basic needs and luxuries in the pictures given above.
5.2 What is a budget?
A budget is an estimate of income and expenditure.
Parts of a budget
There are two main things that need to be considered while budgeting.
These include:
• Income: This is the money we earn.
• Expenditure: This is the money we spend.
The family budget
The family budget is a plan of how the family income is expected to be spent. When making a family budget, we should consider basic needs first and others afterwards. All family members should be involved in making a family budget.
The importance of a family budget
The family budget is important as it
• helps us to avoid overspending.
• provides us with basic needs.
• avoids debt.
• helps us to save.
Activity 5.2
1. Discuss the needs of a family that should be considered while
making a family budget.
2. If you were the head of a family, what would you consider first while budgeting and why?
Making a family budget Mugabo’s monthly salary is 120 000 FRW. Look at his family budget (expenditure) below.
In order to find amount saved you have to add all of items under expenditure and then subtract the total from the total salary.
Therefore Mugabo’s saving is (total salary minus expenditure) Saving = (Salary – Expenditure)
= 120 000FRw – 89 000 FRw= 31 000 FRw
Look at another family budget below
Uwamahoro monthly salary is 100 000 frw look at her expenditure below
Items Price
Rent 20 000 FRw
Food 22 000 FRw
Clothing 15 000 FRw
Medical care 8 000 FRw
Transport 5 500 FRw
Water bill 2 000 FRw
Electric bill 2 500 FRw
Fees 45 000 FRwTotal expenditure 120 000 FRw
Activity
In groups discuss the problems which is faced by Uwamahoro’s family?
What advice can you give to her so that she can reduce on her family expenses?
Savings
Savings are the amount or money not used.
Importance of savings
We save to
• Avoid waste.
• Swap to immediate and future needs.
• Improve our standard of living.• Use savings in future.
5.3 Importance of financial institutions and local markets
Financial institutions in our province
Financial institutions are places which provide financial support, in terms of money. People get money from different financial institutions in order to carry out activities like trade, farming, paying school fees andbuilding houses.
Activity 5.3
1. Discuss other ways in which people use money in our province.
2. Why is money in our daily lives?
Some financial institutions belong to the government and others are
Non-Governmental Organizations (NGOs). Examples of NGOs that provide financial services in the province are:
• IMF – International Monetary Fund
• ILO - International Labour Organisation
• UNICEF- United Nations Children’s Fund.
• WHO- World Health Organisation
Examples of financial institutions in our province are banks, cooperatives and markets.
A bank
A bank is an institution that keeps people’s money safe and provides other financial services.
In our province there are banks like the:
• Bank of Kigali
• Ecobank
• Crane Bank
• National Bank of Rwanda (BNR)
• AB Bank
• Banque Populaire
• I & M bank• GT Bank
Importance of Banks in Our Province
• keep money safe for people
• give loans/ credit to people
• help people to save money
• give interest on money kept in the bank
Activity 5.4
1. Discuss the various types of banks in our province.
2. State two functions of banks.
Co-operatives
A co-operative is a group of people who come together to achieve a common
goal.
Types of co-operative
There are many types of cooperative. Some of them are profit-making
co-operatives and others are service providers. All co-operatives aim for
provide financial support to improve the lives of their members.
Below are some of the types of cooperative in our province.
• Produce marketing society
• Service co-operative society
• Savings and credit co-operative society
Examples of cooperatives are Umwalimu Sacco, Umurenge Sacco, Agaseke,Ocir Café, and Zigama CSS.
Importance of co-operatives in our Province
• They give loans to cooperative members
• Provide tools, seeds and fertilisers to farmers
• Help farmers to sell and market their produce
• Promote unity among the people
• Promote development among people
• Give advice to their members on how to improve the quality of their products
Activity 5.5
1. Discuss other examples of co-operatives in our province.2. Why are cooperatives important in our province?
Markets in our province
The market is a place where people go to buy and sell their products.It is a social service centre as well as a financial institution in our province.
Activity 5.6
1. Name the items people sell and buy in the market.
2. In groups, discuss the types of markets in your province.
Importance of markets in our province
• People buy and sell their products.
• They promote development.
• They are a source of government revenue.• They promote unity, co-operation and friendship among people.
Revision exercise
1. Explain what a budget is.
2. Define is a family budget?
3. State two reasons why it is important to make a family budget.
4 Why should people save money?
5. What are basic needs?
6. List any three examples of a family’s basic needs.
7. Write the following in full.
i) NGOs
ii) UNICEF
iii) IMF
8. Differentiate between a bank and banking.
10. Give any four examples of banks in Rwanda.
11. Which bank is responsible for printing new notes and coins?
12. A co-operative is ...................................................................... .
13. How are co-operatives important to people in our province?
14. Outline any two roles of banks.
15. Give two ways that markets are important in our province.
16. In the table below, make your family budget using 90 000 FRw.
Items to be bought include: food, clothing, medical care, rent, transportand electric bill.
