1. Chapter 5

2.  Comparison Shopping ◦ Compare Brand Names and Sizes  Unit Price  Remember: Time is an Opportunity Cost

3.  Grocery Stores ◦ Carries largest variety of food brands, foods, and services  Club Warehouse Stores ◦ Limited in Brand Choice and Items ◦ Cheapest place to buy food  Sold in Large Quantities  Opportunity Cost:  Must have place to store  Money saved up in inventory of food  Often a membership fee  Convenience Stores ◦ Open 16-24 hours a day ◦ Limited in selections ◦ More expensive than grocery stores

4.  Brand-Name ◦ Well known throughout the country or region  Private-Labeled ◦ Produced specifically for that store  Food Club, Great Value, Kroger ◦ Cheaper than brand name ◦ Manufacturer?  Bulk Foods ◦ Typically: Larger quantity = Lower price/unit

5.  Offered by brand name manufacturers  Can save you large amounts of money HOWEVER ◦ Opportunity Cost: Money Saved vs. Time Spent collecting ◦ Often requires to buy more than needed ◦ Makes consumer buy brand name products

6.  Advantage Card/Loyalty Card ◦ Lower prices if used  Criticisms ◦ Customers paying actual price / non-cardholders paying higher prices ◦ Tracking spending habits

7.  Price not the only factor in determination  Style ◦ Changes with recent trends ◦ Name brand vs. Store brand (cheaper)  Durability ◦ Purchasing for Service Flow (amt of time you are able to use the item and value placed on use) ◦ Certain fabrics last longer  Cost of Care ◦ Dry Cleaning (more costly) ◦ Hand Wash Only?  Opportunity Cost

8.  Clothing costs gone down over the years BUT can still save money  Consignment Stores ◦ Used Clothing Lower Prices  Buy on Sale ◦ Holiday Shopping Sales ◦ Seasonal Sales  Shop Online  Avoid Designer Labels  Make a List Before Shopping ◦ Avoids Impulse Buying

9.  Advantages: ◦ Less UP FRONT Costs ◦ Don’t pay Maintenance Costs or Property Taxes ◦ Mobility  Disadvantages: ◦ Nothing when decide to leave ◦ Bound by Lease Agreement ◦ Often cannot change appearance

10.  Advantages: ◦ Equity (savings account) ◦ Investment (Appreciate) ◦ Can make look as you choose ◦ Income Tax Cuts (Interest is Tax Deductible)  Disadvantages: ◦ Large Down Payment (usually 20%) ◦ Property Taxes, Home Owners Insurance, Possibly Mortgage Insurance ◦ Maintenance Costs ◦ Housing Market (value, selling, etc.) ◦ Must qualify for Mortgage

11.  Know Your Lease!! And Follow The Lease ◦ Agreement (usually) between 1 to 3 years  Pay Security Deposit ◦ Money kept by landlord in case of skipped rent or damage to the rental  Rights: ◦ Use apartment as stated in lease ◦ Privacy  Responsibilities: ◦ Pay rent on time ◦ Take care of property ◦ Notify landlord if repairs needed  Landlord Responsibilities: ◦ Apartments must have minimum services ◦ Obey building safety laws ◦ Must make repairs within certain amount of time  Tenant can make repairs and withhold rent of repairs not made quickly

12.  Avoid These Clauses: ◦ Confession of Judgment Clause  Landlords lawyer can plead in a court case FOR YOU if owner feels their rights been violated ◦ Inability to Sue Clause  Give up your right to sue owner for negligence ◦ Arbitrary Clauses  Owners right to cancel lease for any reasons  Try to Have Added These Clauses: ◦ List of what comes with rental ◦ List of community facilities you get to use ◦ Other promises made by owner (painting, etc.) ◦ Right to cancel lease for emergency (payment stated in lease) ◦ Right to change rental to suit you (ceiling fan, shelves, pics, etc.)

13.  No more than 33% towards Housing  Comparison Shop, Pre-Qualify, and sign a Mortgage ◦ Long term installment debt (Principle + Interest) ◦ Escrow Accounts  Pay for Homeowners Insurance (required), Property Taxes in Mortgage Payment (Mortgage Insurance)  Closing Costs ◦ Extra Fees to Buy a House  Check on Title, Appraisal, Loan App, Credit Check, Inspection, Taxes, etc.  Points? ◦ Fees paid to lender when don’t feel interest is enough to make profits. ◦ Each point equals 1% of purchase cost of home  EX. 1 point on a $100,000 mortgage = $1,000 ◦ Must be paid up front

14.  New or Used? ◦ New cost more but less repairs ◦ Used  Get the Car Facts – Look at the history or maintenance, accidents, etc.  Have looked at by independent mechanic  Registration Fee ◦ State fee to license the vehicle ◦ Usually annually, sometimes biannually (by state) ◦ Varies based on type, weight, age, and value  Extended Warranty ◦ Protection for major repairs ◦ Miles and/or years ◦ Additional money to extend ◦ Lemon Laws also provide protection

15.  Normal Maintenance and Major Repairs ◦ Depends on how much driven and how well taken care of  Depreciation ◦ Decline in value over time ◦ All durable goods deteriorate over time and lose value ◦ Technology makes depreciation occur ◦ Wear and tear ◦ General rule is about 20% a year first 2 years  Insurance ◦ REQUIREMENT IN STATE OF OHIO FOR LIABILITY  Pays any bodily or property damage you cause if in accident ◦ Classify based on age, gender, and marital status ◦ Based on demographic statistics ◦ States have Price Limits that can be charged

16.  Type of Car ◦ Safety record of car, costs to repair, etc.  Where you Drive ◦ Theft rate, population, etc.  Uses of the Car ◦ How many miles a day do you drive the car  Marital Status ◦ Married have lower accident rates than single  Safety Record ◦ Your driving history  Grades ◦ Most companies offer good student discounts. EVEN THROUGH COLLEGE!!  Number of Drivers ◦ How many drivers use the car  Age ◦ Younger drivers in more accidents = higher insurance rates

17.  Liability  Collision  Comprehensive  Uninsured/underinsured motorist  Bodily Injury  Rental/Towing