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									Budget Busters

Consumer Chapters

  Set up a budget that would allow you to
   live the kind of life you want
  Find a car, buy a house, budget
   expenses, find a career, and implement a
Rational Choice

  Educated guess
  Choose the best quality item at the least
  Satisfy your wants
How do you budget?
 Step Two
 Look in the newspaper classifieds,
  apartment hunter publications, college
  campus bulletin boards, and online for
  available units to investigate. Ask friends
  about openings in their buildings.
Consider this…

  Consider how much
   you can afford to
   pay. A good rule of
   thumb is no more
   than 30 percent of
   your take-home
   monthly income.
Check the place…

    Inspect the property carefully. If there's any
     damage, you not only want to ask that it be
     fixed, but don't want to be blamed for it later.
     Make sure such problem areas are addressed
     in a lease, either by your agreeing to live with
     it, or the landlord agreeing to fix it by a certain

    Check out common walls (walls shared with
     adjoining apartments). The more walls in
     common, the greater the chance of noise from
     next door. Also consider a common entrance
     in terms of how much privacy you may want.

    Ask about amenities such as enclosed parking
     or a garage, a yard, storage, laundry facilities,
     pool, tennis, gym, etc.

    If you find an apartment you love but is a stretch financially, ask if there are responsibilities you can
     take on to lower your rent, such as cutting the lawn, sweeping common areas or taking deliveries. Or if
     you find a great apartment but it lacks services such as utilities, laundry facilities, cable TV and
     Internet access, ask the landlord to throw some in at no charge. Many newer buildings will. Or offer to
     sign a longer-term lease or give a higher security deposit in exchange for more services.

    Examine your lease in detail: How much notice is required prior to moving, how large a deposit you
     have to make, how much cleaning is required upon leaving to get your deposit back, and other
     provisions. Some agreements require first and last months' rent plus a security deposit--a significant
     chunk of change. Is the lease month to month, or a 6- or 12-month period?

    Find out what kinds of cosmetic changes you can make, such as painting walls, or structural changes,
     such as adding shelving.

    Ask for a lease with an option to buy if you'd be interested in purchasing the property down the line.
Overall tips – Page one

  If the building allows pets, don't be surprised if you have to
   pay additional damage security deposit.

  Get in writing how soon after you move out you will receive
   your security deposit. Some landlords drag their feet.

  If it's a large complex or a hot rental market, you may have to
   pay an application fee to be considered as a tenant.

  If you are relocating temporarily for business, investigate
   corporate housing, which is paid for by your employer. Check and similar sites for listings.
Tips… Page two

  See How to Obtain Renter's Insurance.

  Ask if your security deposit can be placed in an interest-
   bearing account so that you're at least earning money while
   your landlord holds it. Many states have specific laws about
   how security deposits are treated.

  In some cases, you can negotiate to have a percentage of
   your rental payment applied to a future down payment.

  If you feel a landlord is refusing to rent to you because of
   your age, ethnicity, sexual preference, or physical handicap,
   report it to the local housing office
Checklist for moving out

  Step one

 How much money do I have?
 How much am I willing to spend?
 Can I afford this month after month?

Location to school / Work

  Cars
  Mass transit
  Walking / bike

 How are you going to pay for extra’s?
Prior to moving in…

  Look at the apartment
  Look at apartment w/ a friend
  Video tape apartment

  What is a security deposit?

  Are you allowed to change the locks?
Read the Lease
Way your options

  Opportunity cost – the next best option
   must be thought of… before you buy

  Cost/quality/time
How does education
affect Income?
                         Male            Female
    No High school     14,000             8,000
    High school        22,000            13,000
    Some college       27,000           16,000
    4 year degree      48,000            32,000
    Advanced           79,000            47,000

                  All figures are in $
Buy a car

   Find your dream car by using the internet.
   Here are some websites to get you started:
Purchase a vehicle
 Most common plans are three and five yrs
 six is becoming more common!

 Figure total of car with all “extra’s included

 Subtract your down payment or trade in value of previous car

 Multiply the new base figure of car by the interest from bank for car
   loan and # of years

 Add to base price and divide by # of months
Math Time… Calculators
ready… check math
    Board work
    Check for problem areas
    Ask questions
    Need help? Problems during tutoring
         Task 2- Buy a house

  Everyone has an idea of where they would
     like to live and in what type of house.
     Your job is to find your dream house.
   Use the internet sites provided to get you
Renting versus buying
Apartment shopping
     Positives of Renting

 1.   Cheaper – average cost is $450
 2.   Smaller – easier to maintain
 3.   Landlord carries responsibility too
 4.   Building credit history – “The 3 C’s”
 5.   Lease – 1st step to freedom
Renting - Apartment

Steps to being safe
 Step one – Have friend/parent/adult read the
   lease w/ you.

 Step two – video tape the apartment before
   moving in
            date, time, show damage done

 Step three – Change locks

 Step four – read and know the lease
Reading of the lease

  Read the Lease carefully

  Answer the basic questions

  Have your neighbor read your answers or
   to answer any questions
Positives of a home

 Read the section in book about owning a

 Check table of comparison

 Place in notebook your top 5

 Discuss in class
Task 3- Set up your budget
 1)   Calculate monthly mortgage payment using Yahoo! Real Estate
      Loan Payment Calculator
 2)   Calculate monthly car payment using Yahoo! Car Loan
      Payment Calculator
 3)   Complete worksheet provided to estimate the cost of the
      remaining household expenses.
Task 4- Find a Career

  Choose a career that interests you
  and one that will allow you to lead
         the lifestyle you want
 The U.S. Government’s Occupational
   Outlook Handbook will help you
          accomplish this task.
Task 5- Review Budget
    and Review Life
                 Reality Check
              Do Four Things:
            1) Check your budget
      2) Explain how realistic the budget is
    3) Discuss with parent the reality of your
 4) Make “adjustments” according to feedback
Implement Budget
 Your dream has come true!!!

 a) You must plan.
 b) You will receive a list of bills with their due dates.
    Paid bi-weekly so plan major bills around

 c) Your goal is to be able afford the things you have
    chosen. Direct Deposit to be safe – but why?

 Watch out! Unexpected expenses do come up.
What your balance
register will look like

 Check   Date   Description of   Payment/   Fee   Deposit/Credit   Balance
 #              Transaction      Debit      (-)

 2200    9/23   Old Navy         76.99                             235.89

 2201    9/24   Walmart          35.00                             200.89

                Deposit                           350.00           550.89
Try this activity

  Select a yearly salary

  $14,000

  $22,000

  $27,000
You owe the federal Gov’t
  Federal Gov’t     15% of Income
  Local Gov’t       1% of Income
  Retirement plan   25 per pay = $600 yr.

 Do you have your new number?
Select a renting payment
 Per month


Do want utilities?

 Electric   $45
 Cable      $52
 Garbage    $16.50 per month
 Phone      $18.75 local only
            Average is $46.85
 Water      $16.10 per month
 Gas/heat $42.50
 Insurances on average cost $125 per month
New Car…

 Payment plan per month

$ 375

$ 425

$ 545

 Complete quiz
 Complete worksheets in small groups

 How do you feel about having a budget and
  not being able to buy everything you want?

 What have you learned from doing this

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