1. Personal Finance Chapter 8

2. © EMC Publishing, LLC Spending Your Money Needs Versus Wants Needs Wants Bread Water Rent Electric Medicine Work shoes Camera Hi-def TV Steak Designer clothes Downhill skis MP3 player

3. © EMC Publishing, LLC Spending Your Money Consumers Big spenders (spendthrifts) – Addicted Penny-pinchers

4. What do you think? Discussion © EMC Publishing, LLC Do you know anyone who is addicted to spending? Who is hurt if someone is addicted to spending? What advice would you give to someone who is addicted to spending?

5. © EMC Publishing, LLC Spending Your Money Decision to Buy Create spending chart Consider opportunity costs – What is the opportunity cost of buying video game equipment? $25 $20 $30 $15 $35 $250 $35

6. © EMC Publishing, LLC Spending Your Money Advertising Generic / private brand Brand name

7. © EMC Publishing, LLC What do we call products that are the exact same from one store to another? A.Private label brands B.Name brands C.Generic brands D.Over-the-counter brands E.Luxury brands

8. © EMC Publishing, LLC What do we call products that are the exact same from one store to another? A.Private label brands B.Name brands C.Generic brands D.Over-the-counter brands E.Luxury brands

9. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue”

10. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Strategies – Beautiful people

11. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Strategies – Bandwagon effect

12. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Strategies – Celebrities (or a close approximation)

13. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Strategies – Emotional appeal

14. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Strategies – Catchiness

15. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Strategies – Product placement (TV, games, magazines)

16. What do you think? Discussion © EMC Publishing, LLC What products have you seen on your favorite TV shows? Where else do advertisers use the product- placement technique? Do you have impulses to buy products if you see them on TV or somewhere else? How effective is the product-placement technique?

17. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Strategies – Retail sensory overload

18. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Strategies – Gotta have it now

19. © EMC Publishing, LLC Spending Your Money Advertising Agencies – “Madison Avenue” Targeting youth – Schools (soda) – Cartoons – Advergaming

20. © EMC Publishing, LLC What do we call the practice of a person’s buying a product because everyone else has it? A.Gotta have it now B.Celebrity testimonial C.Beautiful people D.Retail sensory overload E.Bandwagon effect

21. © EMC Publishing, LLC What do we call the practice of a person’s buying a product because everyone else has it? A.Gotta have it now B.Celebrity testimonial C.Beautiful people D.Retail sensory overload E.Bandwagon effect

22. © EMC Publishing, LLC Spending Your Money Making Buying Decisions Gather information – Comparison shopping

23. © EMC Publishing, LLC Spending Your Money Making Buying Decisions Where to buy – Big box stores v. “ma and pop”

24. © EMC Publishing, LLC Spending Your Money Making Buying Decisions Warranty – What about the service department? reliable?

25. © EMC Publishing, LLC Spending Your Money Making Buying Decisions Consult others – Friends – Consumer Reports – Web

26. © EMC Publishing, LLC Spending Your Money Making Buying Decisions Clip coupons from the newspaper and other sources.

27. © EMC Publishing, LLC Spending Your Money Making Buying Decisions Planning your purchase – Be patient; research prices for planned purchases. – Look through the newspaper ads for sales. – Track prices from week to week.

28. © EMC Publishing, LLC Which of the following would most likely help you buy a new computer at the lowest price? A.Find the most popular brand. B.Look for the computer with the latest technology. C.Follow the prices of the computer over time. D.Look for the computer that celebrities use. E.Watch TV and see what the people on your favorite TV show use.

29. © EMC Publishing, LLC Which of the following would most likely help you buy a new computer at the lowest price? A.Find the most popular brand. B.Look for the computer with the latest technology. C.Follow the prices of the computer over time. D.Look for the computer that celebrities use. E.Watch TV and see what the people on your favorite TV show use.

30. What do you think? Discussion © EMC Publishing, LLC Is it cool to clip and use coupons? Why? Which day of the week would be the best day to buy the newspaper for ads? What suggestions do you have for buying wisely?

31. © EMC Publishing, LLC