PF: Unit 10

total average costs to own and operate car in US in 2016

$8558

value of new car typically decreases about

20% in first year. Car continues to lose value over time

percentage of the expenditures family spend on entertainment

3.8% which is low but that's the average spend $207 in a year because may do one month but not next month so it's an average

questions to ask yourself for wants:

Can I afford this purchase? How am I going to pay for this purchase? If I have to charge it or take out a loan, will I be able to afford the monthly payments? Is this the right time to buy it (ie should I wait until the sale price fits within my budget)? Is there a less expensive version/could I buy it used? Can I get this cheaper at another retainer? How many hours of work would it take me to pay for this item?

True or False: If can afford an expensive car, you should purchase it. This way guaranteed fewer costs in the future for things like maintence, tires, etc.

False because just because can afford expensive car still gonna have maintance costs

determine if need or really big want by asking yourself basic questions:

If I didn't have this item, would I still be able to function in life and keep up with my commitment? OR will not having this item severely affect my life in a negative way?

Way tell how wealthy someone is is

by looking at the assets (stuff they own) and subtracting the debt (stuff they owe)

can't get reimbursed by renter's insurance company if

can't remember or things that have more value than company thinks it had. When have renter's insurance have give them number of how much think stuff is worth and that's amount insured for so important to know what have and how much it's worth

final walk-though ( 10 - 10 things know before renting an apartment)

check it out one last time prior to moving in, do one final walk-through/ Make sure all damages fixed and check all lights, appliances, faucets, toilets, and drains

one reason why it's important to create, and stick to, a budget is to be

able to elimate debt, cut your spending, save money, build wealth

net pay/income

after deductions (taxes, anything else have coming out) take-home pay (however much money get) sometimes called/aka take-home pay money actually take home after deductions for insurance, income tax, Social Security etc are taken out what take home/amount actually take home after deductions

20% (50/20/30)

allocated to savings for your savings and financial goals

amenities ( 6 - 10 things know before renting an apartment)

ask about laundry facilities, parking, pool, gym, and storage. may not seem like big deal buy all things want to know about in advance

some poeple who have a lot of things will not

be as wealthy as seem and may have more in debt than assets

General tips for budgeting

be flexible reward yourself check lifestyle inflation always keep your spending below your income

negotatiate ( 8 - 10 things know before renting an apartment)

depending on market conditions some landlords may be willing to give you substantial discounts if ask. Ask them to waive fees/throw in services/lower rent. Most time asking price is negotiable

first step to create a monthly budget is

determine average monthly net income

people have different wants and needs but just because REALLY want something

doesn't mean need it

Initial costs when buy car

down payment (which can be offset by trade-in value of existing car) - if have car already paid off and trade that in, essentially down payment tax - when buy a car still pay sales tax because buying something and can be from 7%-9% of sales price of cars state fees like lecensing/registration/title - got pay to have it licensed about $50 or so dealership documentation fee - how dealerships make money is by adding in fees other miscellaneous dealership fees

good unit pricing makes it

easy to compare prices

kind of expense rent payment is

fixed expense because payments based on particular rate and due each month

what are the basic needs

food, water, shelter, clothing

50% (50/20/30)

of money allocated to fixed expenses, things that don't change like mortgage/rent, utilities, insurance, food, and living expenses fixed expenses not because going be same every money (ie utilities, food etc will fluctuate) but fixed because pay those every money and necessities have to have this amount to living expenses

spend money on needs vs wants because

one day going to need that money to take care of you so start process when young

potential other costs

parking - depending on where live might have pay for this, usually not big issue unless live downtown traffic tickets car accidents various post-sale upgrades/customization

good idea to put as big as of a down payment as can when buying a car because

payment be less because owe less and will pay less interest

despite the 6 reasons for keeping a budget, many people do not have a budget. Why?

people don't understand their spending habits. Regardless how much money make, you should have a bduget. Should track your money no matter how much have because that's budgeting. Got to be able to understand your spending habits, especially if struggle to pay bills because make little money

when comes to your money remember:

people first, then money, then things

value

personal feelings

50/20/30 Rule

popular rule of thum in budgeting simple rule for budgets

to determine if should buy something decide if can

put that money towards emergency fund etc

small print matters ( 9 - 10 things know before renting an apartment)

read lease carefully don't just sign it. Lease is contract that spells out your rightsa nd obligations with landlord. take it home and make sure agree with everything says. if have doubts do not sign or give any money until are addressed

many people of all ages have trouble distinguishing between our "wants" and out "needs". This oversight can affect our

relationships, career success, financial stability, and even our finances

when rentig (now owning place) won't have home owner's insurance so can get

renter's insurance which is not required buy highly recommended especially if an apartment because if apartment below you catches fire and stuff destroyed even though didn't start in your apartment out because if don't have renter's insurance personal belongings gone

when first get out of school and move out, typicall most people have a

roommate for expense purposes

pros of having a roommate

save money on rent and utilities they help you clean built-in friends shared furnishings (don't have to buy everything on your own if other people can provide it)

Renters Insurance

some landlords require but that's their decision but no law requiring you to have it, will cover anything lost or damage if have it, if don't just out having it will cover persoanl beloginings from clothing to personal items you value such as furniture and electronics relatively cheap going to cover your personal belongings

finding an apartment can be fun but

sometimes a challenging process. Important to find apartment fits well with lifestyle, budget, and other personal preferences. Import do research on apartments and know what want

just wait in good financial status as "wants" can

take charge of you wallet

expenses stay same month after month and ones that vary month to month

transportation, insurance, healthcare, housing (really your needs except for food) will stay sae food will vary, people tend to eat about same amount but would vary little bit your wants vary month to month: entertainment, apparel etc

many peole think that being wealthy means you won "a lot of stuff". However,

turns out that number of things you have doesn't determine your wealth. It's all about your assets

unit pricing is not

universa; because most states don't require it and states that do can vary radicaaly which can make it difficult to compare prices (some hidden and have to look very closely, sometimes quantities cannot be compared because one unit price calculate with different units of measurements and because of mishmash of labeling it is huring consumers)

always keep your spending below your income (General tips for budgeting)

very good advice don't spend more than make probably most important tip for budgeting should know not spend more than make

check out neighborhood ( 3 - 10 things know before renting an apartment)

walk around and visit apartment buildings and surroundings at different times of day or night

donations is a

want because don't have to do it

example of flexible expense

groceries as can vary month to month

when getting an apartment may be asked if

have renter's insurance

purchasing power of $100 in MO is

higher than $100 which means your money will go farther than it would if you had $100 in NY or Cali

when purchase a home required to by mortgage companies to have

home owner's insurance and that insurance will cover the structure: house if any naturaly damage hits it, if damage to it, and damage to personal property

biggest factor that influences purchasing power of $100 in state:

housing -> house from KC is going cost less than would in LA because of cost of living/cost of property is higher

3 largest cost categories for families

housing, transportation, and food any neccessities - shelter, transportation, food

cost of living

how far money can go what can you buy with money relative to other states

after determining what is need vs want need figure out

how many those wants can actually afford because no way can afford all things want at once. Give them a ranking and start saving

one of the first steps to budgeting is determing

how much income have. However, using annual gross salary can be misleading

worth

how much something costs

keeping a budget can impact overall wealth because

if keep a budget will save money. If save money, will build up your assets. Building up your assets, elimates you debt which will increase your wealth

Important to have some sort of video of walking through house documenting what have so

if something happens have documentation of it. If recording lose, then out of luck

how much can you afford ( 2 - 10 things know before renting an apartment)

important one rent shouldn't eat up more than 25% of monthly take-home pay. Determine your price range and narrow your search. Don't forget to ask if utilities included

inspect the premise ( 5 - 10 things know before renting an apartment)

inspect property carefull and take pictures of any damage because not only want damage fixed, but don't want to be charge \later for damages didn't cause

30% (50/20/30)

is discretionary income, things can spend on entertainment, hobbies, dining out, yoga classes, clothes, etc

disposable income

is income minus income taxes is money have left over for saving and spending after subtracting income taxes

location location location ( 4 - 10 things know before renting an apartment)

is location convenient? How far from work? School? Friends? drive to and from target apartment several times during different times day to test traffic patterns

"needs"

items can't live without ie food, shelter, clothing, utilities, insurance and other necessities

important thing is to

keep impulses in chck with financial situation. If don't watch could deplet bank account/assume too much debt

do your homework ( 1 - 10 things know before renting an apartment)

look at newspaper classifieds, apartment hunter publications, and local bulletin boards to available units to investigate

criteria also want use when evaluating apartment is

look at size (number of bedrooms) and number people that will be living their

purpose of a personal budget

make a plan to organize and manage your money based on how much earn and spend

two steps documenting

make written list of everything own and video record everything have and keep them in lock boxes or fire safe if possible have written list and video recorded list of everything have

43.9% costs from depreciation which is when value of an asset decreases over time. Factors that cause this include

miles (being big one) and just normal wear and tear. That's why important to have some sort of down payment when buying a car whether have used or new will help you get out because if buy car and don't have down payment and finance whole cost of car, next year car will probably be less than what own on it so end up owing more than it's worth

gross income

money before anything comes out total amount money make; money make before taxes, Social Security, or other deductions are taken out amount before any deductions taken out before deductions

if cost of living is high means

money won't go as far than if the cost of living is low

recurring costs when buy car

montly car payments maintenance car insurance - have to have insurance, if have a loan on a vehicle required by a law to have full converage insurance, if have loan paid off required by law to have liability insurance which covers other person state registration renewal - in MO get one or two year license and should get 2 years so only have renew it every 2 years but do have do that tax - personal property tax which car own or anything motorized and have pay it every year, amount pay depends on year of car so older car is cheaper it gets but if buy new car increases

some people who don't have lot things will have

more wealth because very little debt on objects

be prepared ( 7 - 10 things know before renting an apartment)

most landlords ask you to fill out application and list previous addresses, landlord phone numbers, your emplouers, salaries, and personal references. Having all information available takes stress off and makes you stand out from other applicants

Important use net income, not gross income, when creating a budget because

net income actual amount money have available so don't want use use money not available to you in a budget, want use whatever have available

Are Americans frivolous in spending and do they waste a lot of money?

no because 66% of averae income is spent on needs leaving only 34% for wants so we're aren't exactly frivolous

depreciation

which is when value of an asset decreases over time

should there be a law that requires a universal standarized unit pricing label?

yes there should be a law that requires universal standarized unit pricing labels which is easy to read and use as it lists unit price, regular retail price, and sale price

12 alternatives to owning a car

1) Amazon.com - instead having car to buy stuff buy stuff and have it shipped 2) walking 3) light rail - subway system in Chicago and NY 4) Communter rail - similar to above 5) bike share - like Bird Scooters 6) Buses 7) Lyft 8) Uber 9) Taxis 10) Car sharing 11) Avis - rental car 12) Kinding - havin gother people take you places

6 Reasons why need to budget

1) It helps you keep your eye on the prize (what are your goals and what trying to accomplish) 2) It ensures you don't spend money that you don't have 3) It leads to a happy retirement 4) It helps you prepare for emergencies 5) It sheds light on bad spending habits 6) It's better than counting sheep (if budget money wisely, never lose sleep over financial issues again)

14 factors to consider when deciding where to live

1) affordability 2) taxes - when purchase house have pay property tax 3) employment options - want live somewhere where jobs available for you career 4) real estate value - house worth more in other states than in MO but also cost more because higher taxes, higher mortgage fees; everything costs more 5) Crime rates and statistics 6) proximity to family and friends - some want be close and others far away 7) climate 8) education system - more important for people with kids than without 9) culture - like things such as concerts, sports teams, musicals, art, etc 10) commute time (in LA it takes forever to get anywhere) and public transportation options (in Chicago and NY there are subway systems) 11) food options 12) town/city size 13) healthcare facilities 14) proximity to an airport *in no particular order*

10 things know before renting an apartment

1) do your homework 2) how much can you afford 3) check out neighborhood 4) location location location 5) inspect the premise 6) amenities 7) be prepared 8) negotiate 9) small print matters 10) final walk-through

percent of typical family's expendutures in needs and wants

66% goes to needs 34% goes to wants

total average costs to own and operate car in US in 2016 was $8558. What made this up

Tires - 1.7%; $150/year Finance charges - 8.0%; $683/yr license, taxes, and registration - 8.0%; $687/yr maintenance - 9.3%; $792/yr insurance - 14.3%; $1,222/yr fuel - 14.8%; $1,268/yr depreciation - 43.9%; $3759/yr

what to consider on a roomate agreement

Who is taking which room? Are you all paying the same amount, or different, based on room? Are there other considerations for which one roommate should pay higher rent than others? Does usage during the weekdays/weekends/summers factor in? How is your landlord getting the one check or money in order to pay for rent? How is each utility bill getting paid? Is each person paying the same for utilities or different rates? Is one person in charge of ALL the payments? Or is one individual in charge of EACH bill? Or is there a different plan? How will parking be handled? Will everyone buy their own groceries? Will there be shared groceries? If so, who is buying them, who is eating them, and what's the budget? Are there other factors from the scenarios you should include in the agreement?

tops to save money when grocery shopping

even if willing shop even at one or two different stores during week going save more money buy in bulk when good buy just because warehouse clubs aren't always going find very best deals and those aren't always best buys which is because don't take coupons make yourself a price book which lists cost per unit for items buy regularly that way when get to store and see something on sale and not sure if really good price can figure out unit price and compare by taking a look at price book and see if good price or not planning ahead is key; list may seem like waste of time but prevents you from wandering around the store/stumbing into buy that aren't bargains -> plan week's meals meals at home, make list, look at coupons so buy time get into store and get everything done

three categories included in an adult budget

expenses, income, purpose budgeting is to reach your goals specific categories: transportation, housing, insurance etc (any specific expenses) *things have to track*

assumption person makes that able to use the 12 alternatives to owning a car are that

they assume that have access to those and make sense for you

cons of having a roommate

they may miss payments (have depend on other poeple to get you the money/pay their part of it on time) they help make a mess built-in enemies (lot times people live together thinking it'll be fun then can't stand living with them) less privacy

"wants"

things would like to have but can definitely live without ie electronics, jewlery, toys, cell phones, movies, cosmetics, computers, cars, furnitre etc

people choose not to get renter's insurance because

think they won't need it and they don't think anything will happen

out of costs of car one won't incur every year is

tires because typically don't have get every year unless drive thousands of miles, but tires last few years

your friends and you notice a classmate who always has brand new clothes, shoes, and electronics. To know if classmate is wealthy would need

to know their assets and their debt