1 / 20

JA Economics

JA Economics. Consumers, Savers and Investors Chapter 6. Page 78. Building on what you know. Teens spent $159 billion in 2005 What do you do with your paycheck? Spend it? Save part of it? Save all of it?. Page 78. Gross Domestic Product .

jirair
Download Presentation

JA Economics

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. JA Economics Consumers, Savers and Investors Chapter 6

  2. Page 78 Building on what you know • Teens spent $159 billion in 2005 • What do you do with your paycheck? • Spend it? • Save part of it? • Save all of it?

  3. Page 78 Gross Domestic Product • Final value of all goods and service produced in the country in one year.

  4. Page 79 Sources of Income • Teens’ major source of income are: • Parents • Odd jobs • Part time jobs • Full time jobs • Gifts

  5. Page 79 Sources of Income - work • Wage – by the hour • Salary – by the week, month or year • Depends on: • Skill • Job • Education • Performance • Entrepreneurial drive

  6. Page 80 Sources of Income - wealth • The value of things you own • Add together the value of: • Possessions • Bank account • Savings • Investments • Equals your “net worth”

  7. Page 81 Influences of Wealth • Disposable income – money after taxes • Savings depends on: • Income • Earn more, save and invest more • Expectations • Confidence = spending • Concern = saving • Current Interest Rate • higher rate=incentive to save • Taxes

  8. Page 82 Personal Budget • Write down your desired career. • Look on page 79 and find the category that career falls under. • Create a budget using the following slides equations.

  9. Page 82 Average consumer budget • Housing – 33% • Transportation – 17% • Food – 12% • Retirement – 8% • Personal taxes – 6% • Health care – 5% • Entertainment – 5% • Apparel – 4% • Other – 10%

  10. Page 83 Budget’s Influences • Setting Financial Goals • Goal to increase income • Goal to save money • Estimating Income • Be honest • Be certain • Planning Expenditures • Prioritize your wants

  11. Page 85 Saving and Investment Decisions • Safety • FDIC • Federal Deposit Insurance Corporation • Rate of return • % of interest • > rate = > risk • Liquidity

  12. Page 87 Where to put your savings • Savings deposits - safe • Certificate of Deposit • Higher interest rate • Non liquid • Money market - safe • Lower % than CD • Pensions and retirements fund • Tax deferment

  13. Page 88 Where to put your savings • Corporate stock • High risk • Corporate bonds • Certificate of indebtedness • Mutual funds • Buy a share of a fund • Fund owns a pool of assets • Savings bonds

  14. Page 90 Consumer Credit • Borrowing money to buy now what you can’t afford • Principal and interest must be paid back • Shop around for better terms • Finance charge • Annual percentage rate • Monthly rate of 2.5% • Equals 30% APR

  15. Page 90 Advantages of Credit • Immediate possession • “I want it NOW!” • Flexibility • Time your purchase for sales • Safety • Not carrying cash • Emergency funds • Financial cushion • Character reference • Credit history

  16. Page 90 Disadvantages of Credit • Overspending • Easy to spend money • Higher cost • Merchants pay a fee to credit card companies = higher marginal costs • Impulse buying • Ignore future sales

  17. Page 93 Obtaining and using credit • Character • Personal qualities • Willingness • Honesty • Capacity • Ability to repay • Capital • Money in bank, property, house • Collateral – used to secure the loan

  18. Page 93 How to establish credit • Open a savings account • Have a telephone bill • Co-signer for first loan

  19. Consumer Protection • Right to safety • Unsafe products • Right to be informed • What, terms, and risks of purchase • The right to choose • Illegal to restrict market competition • The right to be heard • Ability to contact producers 1962

  20. Better Business Bureau • http://iowa.bbb.org/consumers/ • http://www.bbb.org/us/blog/ • Sets standards in business ethics

More Related