Managing Your Money 20.1

Consumer Rights Consumer: someone who buys goods or services You can enter any profession or business that you choose You can purchase or reject products and brands that you choose

Two Types of Income Disposable income: money that remains after all taxes have been paid –Usually buy necessities like food, clothing, and housing

Two Types of Income Discretionary income: the money that remains after paying for necessities –Usually spent on luxury items

Protecting Consumers “Let the buyer beware” Consumerism: a movement to educate buyers about the purchases they make and to demand better and safer products

Laws to Protect Consumers Fair Packaging and Labeling Act: every package has to have a label identifying its contents and weight

Laws to Protect Consumers Food, Drug, and Cosmetic Act: requires packages to list their ingredients according to the amount of each.

Laws to Protect Consumers Pure Food and Drug Act: manufacturers of food, cosmetics, and drugs to prove that their product is safe

Who else protects us? The Better Business Bureau: –120 BBBs located in major cities in the U.S. –Business groups run the BBBs –They provide information about local businesses –They warn consumers about dishonest practices –They investigate consumer complaints

Consumer Bill of Rights 1960s JFK and then Nixon emphasized 5 consumer rights:

Consumers have: 1.The right to a safe product One that will not harm their health or lives 2.The right to be informed No misleading advertisements, labels, or other actions 3.The right to choose A variety of products and services available at competitive prices 4.The right to be heard Consumer interests will be listened to when laws are made 5.The right to redress Ability to obtain payment from manufacturer if product causes financial or physical damage

Consumer Responsibilities

Smart buying Strategies Research the product and find out as much information as you can before you buy Use advertisements carefully. Don’t let them appeal to your emotions and buy things you don’t need. Decide where to buy from –Comparison Shopping: compare the same product at many stores to get the best price.

Other Responsibilities Report a faulty product –Report it immediately and don’t try to fix it yourself! –Contact the manufacturer or seller and calmly state your problem –Keep a record of your efforts. ALWAYS get the name of the person you talked to and when you talked to them.

Other Responsibilities Make a fair Complaint –Be ethical, honest, and respect the rights of the seller and producer don’t’ return used items or items that you broke Report unsettled complaints –Contact the proper government agency and help protect other consumers

Making decisions: All decisions will cost you time and income. Time: research and shopping around Opportunity Cost: if you buy one product what will you NOT be able to purchase instead. Is this product worth it??