MAJOR EXPENDITURES: TRANSPORTATION AND HOUSINGAdvanced Level

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Transportation and Housing:Over 50% of Average Spending

Food13%

Housing34%

Transpor-tation17%

Other37%

Consumer Spending

Source: 2011 Consumer Expenditure Survey

HOUSING (RENTING AND OWNING)

Describe your dream house

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Renting a Home – Important Terms

Landlord Tenant• Person who owns a property and chooses Person that rents the property.• to allow others to live there for rent

Rent• Price paid for the use of someone else’s property

Lease Security Deposit•A legally binding document that describes the terms Money paid up front to pay• that the landlord and the tenant have agreed upon. for any damages the tenant• may cause.

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Lease

Lease:A legally binding document that describes the terms that the

landlord and the tenant have agreed upon.

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What are common rental expenses?

Utilities (all or some may be

included in rent)

Household furnishings

(some may be furnished)

Renters Insurance – provides payment to renters to cover the damage and loss of property in addition

to liability losses

Communications(internet, television,

phone)

The cost of housing is more than rent!

© Take Charge Today – August 2013– Major Expenditures – Slide 7Funded 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

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Home Loan

Lender evaluates

many factors including:

Credit history

Income

Net worthAssets-

Liabilities

Income and

expense statement

Most use credit to purchase a home

Lender determines the maximum amount that can be borrowed and the credit

terms

© Take Charge Today – August 2013– Major Expenditures – Slide 8Funded 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

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Mortgage Payment

Mortgage payments

typically include:

Cost of the home Interest Funds to pay property taxes

Funds to pay homeowners

insurance

A payment to pay off the loan used to purchase housing

TRANSPORTATION

What are transportation options

in your community?

© Take Charge Today – August 2013– Major Expenditures – Slide 10Funded 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

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Public Transportation

Pros Cons

May not be convenient or require more

travel time

Availability depends on the

location

Does not require extra cost of ownership expenses

Typically cost effective

Examples include: taxi, subway, bus, etc.

© Take Charge Today – August 2013– Major Expenditures – Slide 11Funded 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

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What are typical automobile ownership expenses?

Automobile payment

(if credit is used)

Fuel Maintenance and Repairs

License and Registration (yearly fee)

Insurance Depreciation

Before purchasing a vehicle, be sure you can afford the total cost of ownership

© Take Charge Today – August 2013– Major Expenditures – Slide 12Funded 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

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Getting a Loan

LoanThis allows you to

borrow with money with

interest.Length of Loan

The longer the loan the lower the payment, but

you’ll pay more in interest.

APRThis is the annual

percentage rate used to compute the finance charge. Is useful when

comparing loans.

Loan rates vary significantly between lenders.Shop around before negotiating.

Down PaymentThe percentage of the purchase price a car

buyer puts down toward the cost of the

car… usually 20%.

Finance Charges (Interest)

This includes all of the $ you will have to pay the lender beyond the cost

of the item.

© Take Charge Today – August 2013– Major Expenditures – Slide 13Funded 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

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Depreciation

The value of most vehicles depreciates (lowers) over

time

One of the biggest costs of ownership.

Over the first two years, a new car loses at least 30%

© Take Charge Today – August 2013– Major Expenditures – Slide 14Funded 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

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What features would you look for in an automobile?

Cost Size Usage

Gas mileage Safety Ratings Reliability

Environmental Impact Depreciation Upgraded

features

© Take Charge Today – August 2013– Major Expenditures – Slide 15Funded 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

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Types of Cars-Coupe

Coupe: Usually has two doors, smaller backseat for occasional passengers, and good gas mileage.

© Take Charge Today – August 2013– Major Expenditures – Slide 16Funded 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

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Sedan: Usually 4 doors, two rows of seats with a backseat that will seat adults comfortably.

© Take Charge Today – August 2013– Major Expenditures – Slide 17Funded 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

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SUV (SPORTS UTILITY VEHICLE): Has multiple rows of seating, an increased hauling capacity, and can usually drive off-road.

© Take Charge Today – August 2013– Major Expenditures – Slide 18Funded 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

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Leasing

You pay a specified amount of money (usually monthly) for a specific time

Once lease expires, vehicle returned to the lease grantor

Read the contract closely – look for

hidden costs

Leasing – This allows you to use a car for a specified period of time for a specified monthly payment.

© Take Charge Today – August 2013– Major Expenditures – Slide 19Funded 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

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Insurance

LiabilityThis compensates an

injured party an ensures you will be able to pay for any

damages you cause.

CollisionThis covers the car

of the insured person and pays

for repairs after an accident or cash compensation.

No-FaultUnder this system, after an accident

both parties would be covered by their

own insurance.