budgeting and consumer skills test review

• To reduce expenses, consider cutting discretionary spending, finding cheaper alternatives, and eliminating unnecessary subscriptions.
• With an $80,000 salary and a 20% savings rate, $16,000 is saved per year, thus reaching a $30,000 emergency fund goal will take just under 2 years.
• Factors to consider when moving to a new city involve cost of living, job opportunities, safety, and access to amenities.
• Buying a car is beneficial for commuting when public transportation is limited. Public transportation is better for saving money and reducing environmental impact.
• The formula for calculating unit price is the total price divided by the number of units.
• Gross pay is the total earnings before deductions. Net pay is the amount received after taxes and deductions.
• Budgets are important for tracking income and expenses, setting financial goals, and making informed financial decisions.
• A zero-based budget is when every dollar is allocated to a specific expense or savings category, resulting in zero remaining.
• Needs are essential for survival, whereas wants are desires. Needs and wants may differ based on individual circumstances.
• A city is likely to have public transportation options like buses, trains, and subways. A rural area will have cars and personal vehicles.

Variable Costs

• Variable costs fluctuate depending on usage. Examples include groceries, utilities, and entertainment.
• The "Pay yourself first" strategy prioritizes savings by allocating a portion of income to savings before other expenses.
• A lease agreement is a contract outlining the terms and conditions for renting a property or asset.
• The envelope budgeting strategy involves allocating cash to envelopes for specific spending categories. Its benefits are its simplicity and restriction of overspending, but it can be inconvenient and inflexible.
• Grocery stores use tactics such as product placement, enticing displays, and promotional pricing to encourage additional purchases.
• Factors to consider when budgeting for a car include the purchase price, insurance, maintenance, fuel costs, and potential repairs.
• The 50-20-30 budgeting strategy allocates 50% of income to needs, 20% to savings and debt repayment, and 30% to wants.
• A good down payment on a home is typically 20% of the purchase price.
• A Pump and Dump scam involves artificially inflating the price of a stock through false information, then selling shares for profit.

Ways of Influence

• The six ways of influence are reciprocity, commitment, social proof, authority, liking, and scarcity.
• Recent identity theft trends involve tax refund fraud, medical identity theft, and scams targeting government benefits.
• Telltale signs of scams include unsolicited offers, pressure to act quickly, and requests for sensitive information.
• Identity theft is most prevalent for people age 19 and under due to social media exposure and online activity.
• A Roach Motel dark pattern makes it easy to get into a situation but difficult to get out of. An example is a subscription service with a complicated cancellation process.
• An influencer promotes products or services to their audience through social media and other channels.

Scams and Security

• Scams are deceptive schemes to trick people out of money or personal information. Red flags include high pressure sales tactics, requests for unusual payment methods, and promises that seem too good to be true.
• Freezing your credit restricts access to your credit report, making it harder for identity thieves to open new accounts.
• When comparison shopping, it can be useful to research different brands and models, reading reviews, and comparing prices from multiple retailers.
• A pyramid scheme is a fraudulent investment where profits are based on recruiting new members rather than selling products or services.
• If you become a victim of identity theft, report it to the authorities, contact credit bureaus, and monitor your accounts for suspicious activity.
• Phishing is a cybercrime where individuals or groups attempt to obtain sensitive information such as usernames, passwords, and credit card details by disguising themselves as trustworthy entities in electronic communication.
• Comparison shopping helps consumers find the best deals and make informed purchasing decisions.
• Dark patterns are deceptive design elements used to trick users into doing things they would not otherwise do.