Major Expenditures: Housing, Transportation and Food

1. Major Expenditures: Housing, Transportation and Food Advanced Level

2. Food, Transportation and Housing:Over 60% of Average Spending Source: 2011 Consumer Expenditure Survey What influences spending choices?

3. Your Present Self Impacts Your Future Self

4. Housing (Renting and Owning) Describe your dream house

5. Housing: Largest Expense for Most Choose housing that fits your personal needs and spending plan

6. Renting a Home – Important Terms

7. What are common rental expenses? The cost of housing is more than rent!

8. Where can you find a place to rent?

9. When Comparing Properties What are examples of essential vs. preferred features?

10. What types of questions would you ask when comparing rental properties? Direct Costs

11. What types of questions would you ask when comparing rental properties? Policies

12. What types of questions does a landlord ask on a rental application? Helps a landlord evaluate if they will rent to you

13. Rental Agreement Don’t pay any deposits or rent payments without a rental agreement!

14. What initial expenses may be required to rent a property? One or both expenses may be required:

15. Purchasing a Home

16. Home Loan Most use credit to purchase a home Lender determines the maximum amount that can be borrowed and the credit terms

17. Two Significant Initial Expenses

18. Mortgage Payment A payment to pay off the loan used to purchase housing

19. What are typical home ownership expenses? Housing expenses are more than a mortgage!

20. Purchasing a $250,000 Home Scenario 1: Down Payment3.5% Interest Rate  30 Year Loan $8,708.33 paid for mortgage insurance! Scenario 2: Credit Score $50,000 Down Payment 30 Year Loan $7,924.42 Additional interest paid Source: mortgagecalculator.org

21. Statement of Financial Position Equity – the monetary value of a property minus the amount owed

22. Rent vs. Own Activity • Set-up: work in groups of 2-3 • Supplies: piece of butcher paper and markers • Activity: For both renting and owning, brainstorm: • 2 Pros • 2 Cons

24. Transportation What are transportation options in your community?

25. Public Transportation Examples include: taxi, subway, bus, etc.

26. Purchasing an Automobile

27. Do Your Research! You are responsible for yourself! Advance research will maximize your satisfaction with the purchase!

28. What are typical automobile ownership expenses? Before purchasing a vehicle, be sure you can afford the total cost of ownership

29. Marina’s Out-of-Pocket Expenses Marina purchased a 2013 Honda Accord Marina’s monthly loan is $347.09, but on average, the car will cost her, $670.46 per month to own! Source: bankrate.com Source: kbb.com

30. Depreciation

31. What features would you look for in an automobile?

32. Using Credit Loan rates vary significantly between lenders.Shop around before negotiating.

33. Down Payment

34. Leasing Leasing – renting a product while the ownership remains with the lease grantor

35. Food Which do you prefer, preparing food at home or eating out? Why?

36. Two Primary Sources Prepare Food at Home Least Expensive Food Away from Home Most Expensive

37. Burger Night - Family of Four Food Away From Home Food Prepared at Home McDonalds Quarter Pounder with Cheese Combo Meal Burger with bun, condiments, 5lb bag of potatoes (for fries) and a 12 pack of Coke The meal prepared at home is less expensive and will result in left-overs What are ways to reduce the cost for either option?

38. Nutrition Brainstorm 2-3 examples of food from each group Goal: Eat well-balanced meals high in nutrition

39. Other Considerations

40. Summary