1. Buying the Necessities
Chapter 5

2. Shopping for Food
Section One

3. Introduction Americans consume a great variety of foods.
They can choose from thousands of different food products and buy them at thousands of stores.
American consumers spend hundreds of billions of dollars a year on food.

4. Comparison Shopping
Involves making comparisons to help decide what to shop for and where to shop
Only comparison shop as necessary by weighing time and transportation costs.
Advertisements and coupons can help save time and money.

5. Trade-Offs in Food Stores
Club warehouse stores generally offer the lowest prices, but their items are only sold in large quantities.
Convenience stores carry few items, have highest prices, but are open more hours.
Brand names are well known nationally or regionally.
Some supermarkets or wholesale stores have their own brand names known as private labels or store brands.
Generic products have no brand name.

6. Clothing Choices
Section 2

7. Introduction
Americans spend about $400 billion annually on clothing and other personal products.
Most people could save considerable income by purchasing only a few very durable pieces of clothing.
The clothes, however, would not serve another purpose-variety

8. Comparing Clothing Value
Buying current styles, which tend to change each year, can be expensive because new clothes must be bought annually.
Buying classic styles, which are more basic and do not change as much, will help your clothes last longer, saving money.
Durability is how well something lasts over time.
Service flow is the amount of time you get to use the product and the value you place on that use
Factor in the cost of care involved in clothing that must be hand washed or dry cleaned versus machine washable.

9. More for Less Clothing costs have decreased significantly over time.
Clothing sales generally happen at the end of the season.
Bargain fanatics buy items just because they are on sale.
If you buy an unnecessary item because it’s on sale, you may not be saving money at all.

10. To Rent or to Buy
Section 3

11. Introduction
Some people will save for years in order to buy a small house. Others take out huge mortgages to purchase large homes.
Still others are content to rent a house, condo or apartment most of their lives
Wise consumers should consider both when deciding whether to buy or to rent housing.

12. How Much Should You Spend?
Avoid spending more than you can afford.
You will need the cash down payment and closing costs.
Be aware of points or fees paid to the lender.

13. Financing the Purchase of a House
Many different types of mortgages and financing packages are available.
Mortgages involve down payments and interest
Mortgages are paid in monthly installments.
Property tax, homeowners insurance, and mortgage insurance are often included.

14. Renter Rights and Responsibilities
Renters usually sign a lease.
Be aware of the clauses in your lease; read it carefully
Tenants have a right to use the property for the purpose stated in the lease, and a right to privacy.
Tenants must pay rent on time, take care of property, and notify landlord if major repairs needed.
Some tenants must place a refundable security deposit in case of damaged property or unpaid rent
Tenants must give written notice if leaving prior to lease’s end, which can result in fees and fines for breaking the lease.
Landlords must provide minimum services and obey building and safety laws.
Rent-control laws limit the amount a landlord can charge in rent.

15. Buying and Operating a Vehicle
Section 4

16. Introduction
As with every decision in life, when you decide to buy a particular type of car, you are going to make a trade-off that involves an opportunity cost.
Three of the major trade-offs include the following:
The smaller the engine, the less gas an automobile burns. This makes a car with a smaller engine less costly to operate, but the car will accelerate less quickly
Newer automobiles cost more, but they require fewer repairs than older ones.
The smaller the automobile, the more energy efficient it is. In an accident, however, larger automobiles usually protect passengers better.

17. Buying and Operating a Vehicles
Registration fees are state fees paid each year.
Normal maintenance and repairs
Cost of buying an extended warranty that covers problems beyond the time frame in the warranty offered by manufacturer or dealer
Depreciation or a decrease in value of car as it ages
Most states require liability insurance that covers both bodily injury and property damage.
Cost of insurance varies based on age, gender, and driving history.