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Personal Finance
 What would you buy with a million dollars?
*Nearly 50% of lottery winners spend all of their
winnings within the first five years.
 Mike Tyson:
 Earned over 300 million
dollars during his career.
 By 2003, he had to file for
bankruptcy. He owed more
than 13 million dollars to
the IRS. What happened?
 He spent money on lavish
birthday parties, tigers,
mansions, and cars.
 He also had a very
expensive divorce.
 MC Hammer:
 Made 30 million dollars in
the early 1990s off the
success of “You Can’t
Touch This” and other
hits.
 By 1996, he had to declare
bankruptcy. He owed 13
million dollars.
 He bought a mansion that
required a 200 person staff,
a helicopter, and gold
chains for 4 of his dogs.
 Differentiate between needs and wants.
 Remove your emotions from your finances.
 Think about your personal values, not those of
advertisers and peers.
 Know your strengths and weaknesses.
 Can you go to the mall without buying something?
 Can you go out with your friends without spending
money on unnecessary things?
 Are there some websites that you cannot visit without
buying a product?
 After you have seriously thought through a spending
decision and have decided to buy, you have other
options to think about.
 What brand to buy
 Where to buy
 Whether to buy now or later
 Comparison shopping involves researching different
brands to find out which one offers the highest quality
for the least amount of money.
 Generic brands are usually
up to 30-50% cheaper than
name brands.
 One of the only reason why
people think that name
brand is better is because
they are advertised more
often.
 Store brands vs. Name
brands
 A great resource is
Consumer Reports or
Google shopping
Personal Finance
Definition:
Added Info:
The cost of giving up one thing to get
something else.
This is the real cost of an item is what you
gave up to get it.
Example:
Opportunity
Cost
What is the opportunity cost of coming
to school everyday?
What would the opportunity cost of
dropping out of high school be?
Image:
Definition:
Added Info:
A small or inadequate amount of
something.
Scarcity effects our decision-making
everyday.
Could be a product, time, money, or
other thing that people desire.
Scarcity
Example:
Time is scarce and how we choose to
divide our time involves scarcity.
What else could we be spending our time
on?
What else could we be spending our
money on?
Image:
Trade-off
Cost-benefit
Analysis
Personal Finance
 Identify different advertising strategies.
 Analyze the effects advertising has on
consumers in order to make better
spending choices.
 What would you assume
about people who:
 Shop for clothes at





Goodwill
Drive station wagons
Wear Chuck Taylors
Wear Aeropostale
Buy clothes at Hot Topic
Always carries a
Starbucks coffee
 Brand:
 The name that identifies a
product or manufacturer.
 Ex. Nike, Adidas,
Starbucks, Apple
 Logo:
 The graphic symbol that
represents the company.
 Ex. Nike “swoosh”, Adidas
“three lines”, Apple “apple”
 To promote their brands and persuade consumers to buy their
products, companies hire advertising agencies.
 Ad agencies are staffed by people with marketing, business,
communications, and journalism backgrounds.
 They also employ psychologists, sociologists, and artists.
 The U.S. teen is bombarded with over 5,000 ads a day!
 Where do you see these ads?
 The typical company earmarks most of their spending for
marketing.
 In a typical year, companies spend more than 150 billion
dollars a year in marketing and advertising.
The Beautiful People
Factor:
1.

Companies want you
to feel that if you buy
their product it will
make you a popular
and beautiful person.

What companies do
you know use this
tactic?
Jump on the
Bandwagon:
2.

Many ads try to get
you to buy a product
because everyone else
is.

What companies do
you know use this
strategy?
3. Celebrity Testimonials:
 Ad execs hope that you
want to buy a product
that famous people use
and endorse.

What companies use
this strategy?
4. Emotional Appeal:
 Many advertisers want
you to feel that buying a
product will make you
feel happier and more
loved.
 What companies do you
know use this strategy?
 Catchiness Factor:
 Companies use catchy songs and jingles.
 What are some jingles that you know?
 Retail Sensory Overload:
 Stores bombard you with environmental stimulants that encourage
you to buy.
 They use smells, videos, mannequins, etc.
 “Gotta Have it Now”:
 Companies want you to feel as if you have to have their product
immediately.
 Fast food and cell phones