Personal Finance Chapter 8 Flashcards

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Questions and Answers

What are the four steps in Smart Buying?

Do Your Homework (correct)
Maintain Your Purchase (correct)
Differentiate Want from Need (correct)
Make Your Purchase (correct)

What is differentiating want from need?

Before buying a 'want', make sure it doesn't interfere with paying for a 'need'.

What is doing your homework?

Determine how much you can afford to spend; comparison shop.

What is making your purchase step?

<p>Negotiate when possible; know the markup; deal with the person who can lower the price.</p> Signup and view all the answers

What is maintaining your purchase?

<p>Physical maintenance; resolve complaints or issues with purchase.</p> Signup and view all the answers

Study Notes

Smart Buying Steps

Four key steps: Differentiate Want from Need, Do Your Homework, Make Your Purchase, Maintain Your Purchase.

Differentiating Want from Need

Assess purchases by distinguishing between wants (non-essential items) and needs (essential items).
Ensure that spending on wants does not hinder ability to pay for needs.

Doing Your Homework

Understand your budget and how much you can afford to spend before making purchases.
Engage in comparison shopping to find the best price and quality among options.

Making Your Purchase

Engage in negotiation to obtain better deals when possible.
Be aware of the markup on items to ensure a fair price.
Preferably deal with individuals who have the authority to lower prices, such as car salespeople.

Maintaining Your Purchase

Ensure proper physical maintenance of purchased items to extend their lifespan.
Address any complaints or issues related to the purchase promptly for resolution.

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Description

This quiz covers key concepts from Chapter 8 of Personal Finance. Learn the four steps of smart buying, the difference between wants and needs, and the importance of doing your homework before making purchases. Test your knowledge and enhance your financial literacy!