Ch. 20 Section 1 Managing Your Money

Consumer Rights With our free enterprise system, consumers have the right to choose any occupation we wish or choose any product we want. We also have the right to reject products that are on the market The thing that we take for granted is that we must be educated about what we consume and the rights that protect us as a consumer.

Consumer Rights (cont.) Consumerism – a movement to educate buyers about the purchases they make and to demand better and safer products from manufacturers Over the years, Congress has passed a number of laws to protect the consumer. The Fair Packaging and Labeling Act requires every package to have a label identifying its contents and how much it weighs

Consumer Rights (cont.) The Pure Food and Drug Act requires manufacturers of foods, cosmetics, and drugs to prove their products are safe Private groups such as the Better Business Bureau protect consumers by providing information about local businesses, warning of dishonest practices, and investigating consumer complaints.

Consumer Rights (cont.) In the 1960’s President John F. Kennedy and later President Richard Nixon emphasized 5 rights of the consumer later billed The Consumer Bill of Rights. Right to a safe product product will not harm health or life Right to be informed people are informed of the facts; protection against fraudulent, deceitful, or misleading information

Consumer Rights (cont.) Right to choose people have a variety of goods and services at competitive prices Right to be heard consumer interests will be listened to when laws are being written Right to redress consumers have the right to obtain adequate payment from manufacturers if financial or physical damage occurs

Consumer Responsibilities With rights come responsibilities If a product is faulty, the consumer is responsible for starting up the problem solving process. State the problem and suggest a fair solution. Keep an accurate record of your efforts to solve the problem; if necessary, contact the manufacturer in writing and keep a copy.

Consumer Responsibilities (cont.) Be familiar with a companies warranty, a promise made by a manufacturer or seller to repair or replace a product within a certain time if it is faulty. Consumers are responsible for exhibiting ethical behavior by respecting the rights of producers and sellers ex. Returning an item because you found it cheaper somewhere else

Consumer Responsibilities (cont.) As a consumer you have to keep 6 things in mind: How to use your income Understanding the decision making process Understanding your goals Saving for the future Saving regularly Deciding about your savings

Consumer Responsibilities (cont.) As a consumer, we must be familiar with our available income and how much of it you choose to spend or save. There are two basic types of income: Disposable income the money a person has left after all the taxes on it have been paid. Use for paying to buy necessities (food, housing, utilities) 2. Discretionary income the money left over after paying for necessities that can be used for satisfying wants, including luxury items and savings accounts

Consumer Responsibilities (cont.) Consumers have to keep in mind that all steps in the decision making process involves an opportunity cost. With any purchase you make, you have to decide if it is worth the next best option you would have to give up

Consumer Responsibilities (cont.) Always consider your goals when making a buying decision. Buying things in the present will make things that much harder to accomplish long term goals

Consumer Responsibilities (cont.) Saving is setting aside income for use later. It is the income that you do not spend. Saving enables you to make major purchases (car, house) Also comes in handy when an emergency presents itself Saving by individuals benefits society as a whole. Provides money for others to invest and spend Allows for business expansion

Consumer Responsibilities (cont.) Saving regularly each week or each month allows individuals to take advantage of the interest they can accumulate on their money through a savings account Interest is the payment people receive when they lend money, or allow someone else to use their money.

Consumer Responsibilities (cont.) Saving your money is a trade-off. You decide to spend less today to increase your ability to spend in the future. To decide how much to save, people need a plan. You would have to consider everyday expenses, the reasons for saving, the interest you could earn, and your potential to earn a higher income in the future.