Introduction

This is the second session of a course on money management produced by The Open University in collaboration with MoneySavingExpert.com.

In this session on budgeting and taxation you will learn how the income you receive – your net income – is affected by the deductions of income tax and National Insurance Contributions (NICs) from your gross income.

You’ll then explore the characteristics of your spending before you start building your budget.

Understanding how to manage your budget provides the foundation of good financial management and in this session you will learn how to go about this.

After studying this session, you should be able to:

• understand how income tax and National Insurance impact on earnings
• understand household spending
• compile a budget
• understand the key aspects of budget management.