Personal Finance or

Managing Your Money The consumer or someone who buys a product or service, has responsibilities: Income Types: Disposable- money after all taxes have been paid Discretionary- money after paying for all necessities; can be used on wants

Protecting Consumers caveat emptor- “let the buyer beware” Consumerism- movement to educate buyers about the purchases they make and demand better and safer products from manufacturers

Consumer Bill of Rights Right to a safe product- cause no harm Right to be informed-no fraud or misleading information Right to choose-variety of products Right to be heard-listened to when laws are being written Right to redress- payment of product caused damage or financial strain

Smart Buying Strategies Gather information-use consumer magazines etc. Use advertising but be careful Comparison shop- visit stores, check flyers, magazines, ads, etc. Look for brand name and identical generic products Think about used products VS.

Other Responsibilities Report a faulty product: Report immediately Use the warranty- promise of repair or replacement Contact the seller or manufacturer and suggest a fair solution

Other Responsibilities Keep accurate records of efforts to solve the problem Allow reasonable time to solve the problem Always contact the manufacturer personally by phone, e-mail or typed letter Keep your composure!

Make a Budget- Stick to it! The best way to handle your money is with a budget-careful record of all the money your ear and spend. Your income is the money your earn Your expenses are the money your spend on everything

How to make a budget Make a list of everything you spend for a couple of weeks Record everything you earn and it’s source Analyze your data- do you need to cut expenses and work more? Keep a surplus for emergencies Monitor your spending

Credit Borrowing money to pay for something now while promising to pay it later is credit

Credit Terms Lender- person who loans the money Borrower- receives the loaned money Interest- cost for the use of the money Annual percentage rate (APR)-the annual cost of credit expressed as a percentage of the amount borrowed

Credit Terms Credit rating- evaluation of the likelihood a borrower will default, not pay, a loan- use past payment history Collateral- property, house, car or other valuable items that a borrower pledges as security for a loan

Credit sources Banks Credit unions Finance companies Stores Credit cards- be careful!!!!!! ex.- $2,000 with 18% interest will take you 10 years to pay it off with minimum payments! $1,142 in interest! Some purchases require a down payment or part of the purchase price; usually large purchases like homes or cars

Credit Benefits and Drawbacks Allows you to buy now Teach financial discipline Helps the economy Can borrow too much Bankruptcy- inability to pay debts (stays on your credit for 7-10 years)

Why Save……. Saving gives other individuals and businesses borrowing power –place $ in bank- bank loans $ Save regularly- gets you use to it Have access when needed Earn interest-payment bank gives you for using your money

Savings Types Savings account- banks, savings and loans, credit unions can earn money on your principal, or amount initially deposited Checking account- some banks pay interest write checks from the account- don’t over spend or “bounce a check” Money Market Account-require a high balance CD- Certificate of Deposit long term US Savings Bond- loan money to US government

Investments Stocks- partial ownership Bond- lending money to a company or government Mutual fund- pools of money from groups of people

What kind of spender are you? Don’t be an impulse buyer- emotional purchase “on the spot”

One Million------------00/100 Can you write a check? 3-23- 2011 Tina Bartlett 1,000,000 One Million------------00/100 Bill Gates Gift