1. Major Expenditures: Transportation and housing
Advanced Level

2. Transportation and Housing: Over 50% of Average Spending
Source: 2011 Consumer Expenditure Survey

3. Housing (Renting and Owning)
Describe your dream house
Housing (Renting and Owning)

4. Renting a Home – Important Terms
Landlord Tenant
Person who owns a property and chooses Person that rents the property.
to allow others to live there for rent
Rent
Price paid for the use of someone else’s property
Lease Security Deposit
A legally binding document that describes the terms Money paid up front to pay
that the landlord and the tenant have agreed upon for any damages the tenant
may cause.

5. Lease
Lease:
A legally binding document that describes the terms that the landlord and the tenant have agreed upon.

6. What are common rental expenses?
The cost of housing is more than rent!
Utilities (all or some may be included in rent)
Household furnishings (some may be furnished)
Renters Insurance – provides payment to renters to cover the damage and loss of property in addition to liability losses
Communications (internet, television, phone)

7. Home Loan Most use credit to purchase a home
Lender evaluates many factors including:
Credit history
Income
Assets-Liabilities
Net worth
Income and expense statement
Most use credit to purchase a home
Lender determines the maximum amount that can be borrowed and the credit terms

8. Mortgage Payment
A payment to pay off the loan used to purchase housing
Mortgage payments typically include:
Cost of the home
Interest
Funds to pay property taxes
Funds to pay homeowners insurance

9. What are transportation options in your community?

10. Public Transportation
Examples include: taxi, subway, bus, etc.
Pros
Cons
May not be convenient or require more travel time
Availability depends on the location
Does not require extra cost of ownership expenses
Typically cost effective

11. What are typical automobile ownership expenses?
Automobile payment (if credit is used)
Fuel
Maintenance and Repairs
License and Registration (yearly fee)
Insurance
Depreciation
Before purchasing a vehicle, be sure you can afford the total cost of ownership

12. Finance Charges (Interest)
Getting a Loan
Loan
This allows you to borrow with money with interest.
Length of Loan
The longer the loan the lower the payment, but you’ll pay more in interest.
APR
This is the annual percentage rate used to compute the finance charge. Is useful when comparing loans.
Down Payment
The percentage of the purchase price a car buyer puts down toward the cost of the car… usually 20%.
Finance Charges (Interest)
This includes all of the $ you will have to pay the lender beyond the cost of the item. .
Loan rates vary significantly between lenders. Shop around before negotiating.

13. Depreciation The value of most vehicles depreciates (lowers) over time
One of the biggest costs of ownership.
Over the first two years, a new car loses at least 30%

14. What features would you look for in an automobile?
Cost
Size
Usage
Gas mileage
Safety Ratings
Reliability
Environmental Impact
Depreciation
Upgraded features

15. Types of Cars-Coupe
Coupe: Usually has two doors, smaller backseat for occasional passengers, and good gas mileage.

16. Sedan: Usually 4 doors, two rows of seats with a backseat that will seat adults comfortably.

17. SUV (SPORTS UTILITY VEHICLE): Has multiple rows of seating, an increased hauling capacity, and can usually drive off-road.

18. Leasing
Leasing – This allows you to use a car for a specified period of time for a specified monthly payment.
You pay a specified amount of money (usually monthly) for a specific time
Once lease expires, vehicle returned to the lease grantor
Read the contract closely – look for hidden costs

19. Insurance
Liability
This compensates an injured party an ensures you will be able to pay for any damages you cause.
Collision
This covers the car of the insured person and pays
for repairs after an accident or cash compensation.
No-Fault
Under this system, after an accident both parties would be covered by their own insurance.