Personal Financial Literacy You as a Consumer

Learning Where and When to Buy A consumer is a person who buys or uses goods and services Impulse buyers make purchases without thinking about price or usefulness Wise shoppers spend more time thinking about what they buy Get the most out of your shopping by paying attention to ads, going during sales, and using coupons Just because it’s a low-priced item DOES NOT mean it’s a bargain Not if you can’t use it or if it’s poorly made

Judging Price and Quality You should be able to judge product quality and know how you plan to use that product Must also compare prices based on your needs Despite brand names, the only way to be sure about the quality of a product is to study its label

Studying Labels Labels are on products to protect and inform consumers Manufacturer info Package contents Weight and quantity Ingredient Serving sizes Safe handling/cooking instructions Warning labels Sell by dates/expiration dates Unit price

Consumer Protection Organizations You can take legal action if you feel you have been misled by unfair business practices Better Business Bureau Federal govt. also protects consumers FTC regulates advertising and labeling USDA inspects and grades food USPS makes sure mail is kept safe CPSC makes sure consumer products are safe

Consumer Protection Organizations Most states and cities have consumer protection offices Private organizations test and rate products, and publish their findings in magazines and online 

Problems Caused by Consumers Shoplifting costs businesses billions of dollars each year in the U.S. People take advantage of refund policies Damage other’s stores or property Fail to pay for purchases obtained on credit Businesses past costs on to the customers in the form of higher prices

Pay Now or Later? Pay now- charged immediately and might make you think more about what you’re buying Cash, checks, or debit cards Debit cards operate the same way as checks do (they draw from the same checking account) Instead of taking the time to write a check, people use debit cards

Pay Now or Later? Pay Later Credit allows you to buy something now and not have to pay it until you are billed (usually once a month) The amount of money you have in your credit account determines how much you can buy with your credit card You must pay back what you buy every month or else you become a credit risk

Pay Now or Later? Credit ratings show how reliable you are as a borrower and how capable/honest you are at paying your bills Credit ratings can affect buying a car, buying a house, or getting a loan for a business or going to school Careful not to purchase foolish things that run up your debt Interest rates on debt payments and annual fees get thousands of people into serious financial trouble every year

Installment Plans and Down Payments Installment plans let you buy something without the paying the full amount You put down a single amount to hold the item for yourself called a down payment After the down payment, the rest of what you owe on the item can be paid in installments until you pay off the entire balance

Installment Plans and Down Payments Large purchases are often bought on installment plans A written contract outlines the payments and due dates If a person fails to adhere to the contract, the seller can repossess the item and keep the money already paid on it Installment plans COST MORE than purchasing at once Service charges, installment payments, interest payments Wise to pay off installment plans as quickly as possible