Ch. 20
Section 1
Managing Your Money
Consumer Rights
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With our free enterprise system, consumers
have the right to choose any occupation we
wish or choose any product we want. We
also have the right to reject products that
are on the market
The thing that we take for granted is that we
must be educated about what we consume
and the rights that protect us as a consumer.
Consumer Rights (cont.)
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Consumerism – a movement to educate buyers
about the purchases they make and to demand
better and safer products from manufacturers
Over the years, Congress has passed a number of
laws to protect the consumer.
The Fair Packaging and Labeling Act requires every
package to have a label identifying its contents and
how much it weighs
Consumer Rights (cont.)
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The Pure Food and Drug Act requires
manufacturers of foods, cosmetics, and drugs
to prove their products are safe
Private groups such as the Better Business
Bureau protect consumers by providing
information about local businesses, warning
of dishonest practices, and investigating
consumer complaints.
Consumer Rights (cont.)
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1.
2.
In the 1960’s President John F. Kennedy and later
President Richard Nixon emphasized 5 rights of the
consumer later billed The Consumer Bill of Rights.
Right to a safe product
product will not harm health or life
Right to be informed
people are informed of the facts; protection against
fraudulent, deceitful, or misleading information
Consumer Rights (cont.)
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4.
5.
Right to choose
people have a variety of goods and services at
competitive prices
Right to be heard
consumer interests will be listened to when laws
are being written
Right to redress
consumers have the right to obtain adequate
payment from manufacturers if financial or physical
damage occurs
Consumer Responsibilities
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With rights come responsibilities
If a product is faulty, the consumer is responsible for
starting up the problem solving process.
State the problem and suggest a fair solution.
Keep an accurate record of your efforts to solve the
problem; if necessary, contact the manufacturer in
writing and keep a copy.
Consumer Responsibilities
(cont.)
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Be familiar with a companies warranty, a promise
made by a manufacturer or seller to repair or replace
a product within a certain time if it is faulty.
Consumers are responsible for exhibiting ethical
behavior by respecting the rights of producers and
sellers
ex. Returning an item because you found it cheaper
somewhere else
Consumer Responsibilities
(cont.)
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2.
3.
4.
5.
6.
As a consumer you have to keep 6 things in
mind:
How to use your income
Understanding the decision making process
Understanding your goals
Saving for the future
Saving regularly
Deciding about your savings
Consumer Responsibilities
(cont.)
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As a consumer, we must be familiar with our available income
and how much of it you choose to spend or save.
There are two basic types of income:
1.
Disposable income
the money a person has left after all the taxes on it have
been paid. Use for paying to buy necessities (food, housing,
utilities)
2. Discretionary income
the money left over after paying for necessities that can be
used for satisfying wants, including luxury items and savings
accounts
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Consumer Responsibilities
(cont.)
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Consumers have to keep in mind that all
steps in the decision making process involves
an opportunity cost.
With any purchase you make, you have to
decide if it is worth the next best option you
would have to give up
Consumer Responsibilities
(cont.)
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Always consider your goals when making a
buying decision.
Buying things in the present will make things
that much harder to accomplish long term
goals
Consumer Responsibilities
(cont.)
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Saving is setting aside income for use later. It is the income
that you do not spend.
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Saving enables you to make major purchases (car, house)
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Also comes in handy when an emergency presents itself
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Saving by individuals benefits society as a whole. Provides
money for others to invest and spend
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Allows for business expansion
Consumer Responsibilities
(cont.)
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Saving regularly each week or each month
allows individuals to take advantage of the
interest they can accumulate on their money
through a savings account
Interest is the payment people receive when
they lend money, or allow someone else to
use their money.
Consumer Responsibilities
(cont.)
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Saving your money is a trade-off.
You decide to spend less today to increase your
ability to spend in the future.
To decide how much to save, people need a plan.
You would have to consider everyday expenses, the
reasons for saving, the interest you could earn, and
your potential to earn a higher income in the future.