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Buying the Necessities

Buying the Necessities

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Buying the Necessities

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  1. Buying the Necessities Chapter 5

  2. Learning Objective • I can identify a variety of ways to save money when shopping for food.

  3. Shopping for Food • Comparison Shopping • Compare Brand Names and • Remember: Time is an

  4. Trade-Offs in Stores • Grocery Stores • Carries largest variety of food brands, foods, and services • Club Warehouse Stores • Limited in Brand Choice and Items • Sold in • Opportunity Cost: • Must have • Money saved up in • Often a membership fee • Convenience Stores • Open 16-24 hours a day • More expensive than grocery stores

  5. Other Food Decisions to Make • Brand-Name • Well known throughout the country or region • Private-Labeled • Produced specifically • Food Club, Great Value, Kroger • Manufacturer? • Bulk Foods • Typically: Larger quantity = Lower price/unit

  6. Cents-Off Coupons • Offered by • Can save you large amounts of money HOWEVER • Opportunity Cost: Money Saved vs. Time Spent collecting • Often requires to buy more than needed • Makes consumer buy brand name products

  7. Store Discount Cards • Advantage Card/Loyalty Card • Lower prices if used • Criticisms • Customers paying actual price / non-cardholders paying higher prices • Tracking spending habits

  8. Learning Objective • I can identify a variety of ways to save money when shopping for food.

  9. Learning Objective • I can identify methods to help make wise consumer choices when shopping for clothes

  10. Comparing Clothing Value • Price not the only factor in determination • Changes with recent trends • Name brand vs. Store brand (cheaper) • Purchasing for Service Flow (amt of time you are able to use the item and value placed on use) • Certain fabrics last longer • Dry Cleaning (more costly) • Hand Wash Only? • Opportunity Cost

  11. How to Save on Clothes • Clothing costs gone down over the years BUT can still save money • Used Clothing Lower Prices • Holiday Shopping Sales • Seasonal Sales • Shop Online • Avoid Designer Labels • Avoids Impulse Buying

  12. Learning Objective • I can identify methods to help make wise consumer choices when shopping for clothes

  13. Learning Objective • I understand the advantages and disadvantages to both renting and buying a home

  14. Advantages/Disadvantages of Renting • Advantages: • Don’t pay Maintenance Costs or Property Taxes • Disadvantages: • Nothing when decide to leave • Often cannot

  15. Advantages/Disadvantages of Buying a Home • Advantages: • Can make look as you choose • Disadvantages: • Property Taxes, Home Owners Insurance, Possibly Mortgage Insurance • Housing Market (value, selling, etc.)

  16. Learning Objective • I understand the advantages and disadvantages to both renting and buying a home

  17. Learning Objective • I know and understand rights and responsibilities as a rentor

  18. Renter Rights and Responsibilities • Agreement (usually) between 1 to 3 years • Money kept by landlord in case of skipped rent or damage to the rental • Tennant Rights: • Privacy • Tennant Responsibilities: • Take care of property • Landlord Responsibilities: • Apartments must have minimum services • Obey building safety laws • Tenant can make repairs and withhold rent of repairs not made quickly

  19. Clauses in Leases • Avoid These Clauses: • Landlords lawyer can plead in a court case FOR YOU if owner feels their rights been violated • Give up your right to sue owner for negligence • Arbitrary Clauses • Owners right to cancel lease for any reasons • Try to Have Added These Clauses: • List of what comes with rental • List of community facilities you get to use • Other promises made by owner (painting, etc.) • Right to cancel lease for emergency (payment stated in lease) • Right to change rental to suit you (ceiling fan, shelves, pics, etc.)

  20. Learning Objective • I know and understand rights and responsibilities as a rentor

  21. Learning Objective • I can go through the process of purchasing a home

  22. Purchasing a House • No more than 33% towards Housing • Comparison Shop, Pre-Qualify, and sign a Mortgage • Long term installment debt (Principle + Interest) • Escrow Accounts • Pay for Homeowners Insurance (required), Property Taxes in Mortgage Payment (Mortgage Insurance) • Closing Costs • Extra Fees to Buy a House • Check on Title, Appraisal, Loan App, Credit Check, Inspection, Taxes, etc. • Points? • Fees paid to lender when don’t feel interest is enough to make profits. • Each point equals 1% of purchase cost of home • EX. 1 point on a $100,000 mortgage = $1,000 • Must be paid up front

  23. Learning Objective • I can go through the process of purchasing a home

  24. Learning Objective • I know and understand the important things to consider when purchasing a car

  25. Buying a Car • New cost more but less repairs • Used • Get the Car Facts – Look at the history or maintenance, accidents, etc. • Have looked at by independent mechanic • http://www.kbb.com • Usually annually, sometimes biannually (by state) • Varies based on type, weight, age, and value • Additional money to extend • Lemon Laws also provide protection

  26. Operating a Car • Normal Maintenance and Major Repairs • Depends on how much driven and how well taken care of • Decline in value over time • All durable goods deteriorate over time and lose value • Technology makes depreciation occur • Wear and tear • General rule is about 20% a year first 2 years • REQUIREMENT IN STATE OF OHIO FOR LIABILITY • Pays any bodily or property damage you cause if in accident • Based on demographic statistics • States have Price Limits that can be charged

  27. Learning Objective • I know and understand the important things to consider when purchasing a car

  28. Learning Objective • I can identify the factors that could lead to higher insurance rates

  29. Factors Affecting Automobile Insurance Rates • Type of Car • Safety record of car, costs to repair, etc. • Where you Drive • Theft rate, population, etc. • Uses of the Car • How many miles a day do you drive the car • Marital Status • Married have lower accident rates than single • Safety Record • Your driving history • Grades • Most companies offer good student discounts. EVEN THROUGH COLLEGE!! • Number of Drivers • How many drivers use the car • Age • Younger drivers in more accidents = higher insurance rates

  30. Auto Insurance • Liability • Collision • Comprehensive • Uninsured/underinsured motorist • Bodily Injury • Rental/Towing

  31. Learning Objective • I can identify the factors that could lead to higher insurance rates