1. Personal Finance & Economics

2. Managing Your Money

3. Consumer Rights: Income Types
DOLLAR VOTE guides how we spend $
Disposable Income
Money left after taxes are paid
Used for needs
Discretionary Income
Money after necessities are bought
used for wants

4. Consumer Rights: Protections
Caveat Emptor
Let the buyer beware
Consumerism
Educating buyers about products & demanding top quality from manufacturers
Laws passed to protect consumers
Labeling:
Fair Packaging and Labeling Act– contents must be identified
Food, Drug, and Cosmetic Act- list ingredients and amounts
Consumer Health & Safety
Food & Drug Act 1906
Better Business Bureau

5. Consumer Responsibilities: Smart Buying Strategies
Be informed!!
Don’t be easily swayed by advertising
Engage in COMPARISON SHOPPING
Brand name vs. generic
Balance costs & benefits of buying used items, mail order, or alternatives, etc.

6. Consumer Responsibilities: Other
Report faulty products
Keep records of efforts to resolve
Exhibit ethical behavior

7. Consumer Rights: Consumer Bill of Rights
Started under JFK, re-defined under Nixon
5 basic rights:
1) Right to a safe product
2) Right to be informed
3) Right to choose
4) Right to be heard
5) Right to redress

8. Planning & Budgeting

9. Making a Budget: Basic Terms
a plan for making and spending $
Income
$ you earn
Expenses
$ you spend on everything (including saving)

10. Making a Budget: How to Make a Budget
Make a list of expenditures
Record income
Analyze data
Set aside Emergency $
Monitor Spending– tame unnecessary spending

11. Making a Budget: CREDIT: Terms
Borrowing $ to pay now, enjoy now, but repay later
Annual percentage rate (APR)
Annual cost of credit
Credit rating
Evaluation of borrower’s ability to repay
Collateral
Items of value pledged as security on a loan
Interest
$ paid to lender for allowing use of money by borrower

12. Making a Budget: CREDIT: Sources
Credit Cards
Most common
Banks, cc companies, stores
$ limit set on spending allowance
Mortgages
Home loans
Car loans

13. Making a Budget: CREDIT: Benefits & Drawbacks
Can buy now and pay later… helps to satisfy wants
Meeting payment requirements can teach financial discipline
BANKRUPTCY !!

14. SAVING & INVESTING

15. Saving for the Future: Why?
Make major purchases
Emergencies
Luxurious wants: vacations
Economic “circle of life”
Allows others to borrow $
Improves standard of living

16. Saving for the Future: Saving Regularly
Employer withholdings
Employee responsibility
Easy availability of funds
Earns interest

17. Saving for the Future: Deciding About Saving
Trade-off involved
Saving for “tomorrow” eliminates something you can have now

18. Types of Savings Savings & Checking accounts Certificates of Deposit
Money Market Account
US Savings Bonds
See chart on page 556 !!!

20. Investments: Stocks Stocks = ownership in a company
Stock values go up & down
Dividends: payments based on stocks ownership of a company’s profits
Can gain $ or lose it all!!

21. Investments: Bonds
Bond– contract to repay borrowed money with interest in a specified amount of time
No ownership attached
Quick method for raising $
Government bonds
Used to pay for expenses
Savings bonds (safe!!)
Treasury bills

22. Investments: Mutual Funds
Pools of $ from many people who are invested in a selection of individual stocks and bonds chosen by financial experts
Limits loss since it is spread out
Some tracked by a gov’t regulated index
Dow Jones Industrial Average
Standard & Poor’s (S&P)

23. Achieving Your Financial Goals

24. What kind of SPENDER are you?
Impulse buyer
Signs:
Buy things you don’t need
Emotions tied to buying
Out of $ & have to borrow often
Quick loss of satisfaction with purchases
Avoidance Tips
Budget
Make a list
Walk away from temptation
Price shop & delay purchasing