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6.06 smart consumer spending
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- 2. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Planned Buying Process Prioritize Wants Conduct Research Spending Plan Evaluation Make the Purchase From Initial desire to buy To Satisfaction after the purchase
- 3. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Planned Buying Process Principles Apply it each time a purchase is made Ongoing cycle Essential consumer skill
- 4. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Durable vs. Consumable Goods Durable Does not quickly wear out More expensive (typically) Cell phone, automobile Consumable Item is consumed in the present Less expensive (typically) Food, fuel, cosmetics What are examples of durable and consumable goods?
- 5. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Applying the Planned Buying Process Investing time typically results in greater satisfaction and is a positive financial management practice Process applies, but less time is spent Durable Consumable
- 6. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Prioritize Wants Distinguishing between needs and wants results in Ability to prioritize spending decisions Your present self impacts your future self
- 7. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 When Prioritizing Wants Analyze the opportunity cost and trade-offs Examine the impact on your spending plan Consider personal and social factors influencing your choice How do personal and social factors influence individuals?
- 8. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Conduct Research Conducting research helps you… Identify the best option Be satisfied with the purchase
- 9. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Information Sources Be a critical consumer! Seller Consumer Reports Appropriate Licenses Product Reviews What are questions critical consumers ask?
- 10. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Consider Purchasing Options Used vs. New Store vs. Name Brand Where to Purchase When to Purchase Do-it- Yourself Depending on the item, several options may exist: What are example of items available as used or store-brand?
- 11. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Consider Product Features Safety Ratings Expected Durability Maintenance Required Hidden Costs Warranties Environmental Impact What are product features of automobiles?
- 12. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Product Price Prices vary widely across sellers Different version of the same product may be available Rank the priorities of different product features Determine which option provides the most desired features at the lowest cost Option 1: Price: Option 2: Price: Option 3: Price: Rank features in order of importance Place a if the option includes that feature.
- 13. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Spending Plan Evaluation How will you pay for the item? Will this become a contractual expense? What is the trade-off to this purchase? What is the cost of ownership? Before making the purchase, evaluate your spending plan: What is an item you currently use that has a cost of ownership?
- 14. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Cost Per Use $100 prom dress Worn once Cost per use: $100 $100 pair of jeans Worn weekly for a year Cost per use: $1.92 $65 monthly gym membership Visited 15 times per month Cost per use: $4.33 How can cost per use influence purchasing decisions?
- 15. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Make the Purchase Sales Personnel • Be comfortable with him/her • Prepare yourself in advance to negociate Seller • Make sure they are reputable • Ask about their refund, return or cancellation policies When making the purchase, be confident with the company and staff!
- 16. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Online Purchases Online Purchase Use only secure sites Use a credit card (not a debit card) Review shipping and return policies Save documentation What are principles to making a safe online purchase?
- 17. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Redress If you are not satisfied with your purchase: Evaluate sellers return policy Learn if there laws that protect consumers for the specific item Process of righting a wrong
- 18. © Take ChargeToday – August 2013– Smart Consumer Spending – Slide 18 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona 2.6.6.G1 Summary The planned buying process should be used for all purchases The amount of time spent on this process will vary Consumers have a variety of product options Be a critical consumer to maximize satisfaction