 Personal finance presentation, buying strategies for large items including a car. Time to get financially fit practicing personal finance. When thinking about purchasing large items such as the purchase of a car, it's useful to have a plan in place, a process, a series of procedures that we will be following because as has been the theme in our finance topics and will continue to be the theme in finance topics. We as financial decision makers are often good at the short term decisions, often not as good at the long term decisions. Those decisions that are going to have an impact in multiple periods into the future, multiple years into the future, obviously large purchase items are going to be basically an investment that are going to have an impact not just on the current year, but for multiple years into the future. Some reasons that we're good at the short term decisions and possibly not as good at the long term decisions are that the short term decisions are the ones that we can use that trial and error process. We can kind of hone down our decisions because if we make an incorrect decision, then we can test that out to another decision and basically hone down, create habits around those decisions that produce the best results. So our intuition is kind of designed towards the short term, it's not really designed towards the long term. So it's not something that we're kind of focused on just in general and also it's those types of things where it's more like you have to use the atage of measure twice, cut once as opposed to basically tinkering with something until you get the result that you like. So that means that if it's a situation where you have to measure twice and cut once so that you don't get it wrong, then you got to put more research into it and whenever you have to do more research for a longer term decision, that's usually when you want to not just rely on your intuition on just your gut, although the gut's always going to be a factor. You also want to have the plan in place so you got more of a formal process on it. So the objectives we're going to have here, we're going to list the buying strategies, we're going to construct a process for making purchasing decisions, build a list of procedures to take to fix consumer problems and then identify legal alternatives for consumers. So quick recap of buying activities. Buying decisions are like any other type of decision in that they involve tradeoffs. When you're talking about any kind of decisions, if you're looking at it from an economic standpoint, even if you got something for free, there's a tradeoff of the time and effort that's going to be put into place. So every decision we make from that perspective can be thought of as a series of tradeoffs. Most of the time, we make those decisions kind of intuitively. So if they're day-to-day decisions that are going to impact their current timeframe, we kind of have the habits in place and we make those decisions intuitively and the fact that we're making those decisions intuitively, not going through a formal process for every decision we're making is a decision, right? We've decided that that's not worth our time. We're going to rely on our gut and our habits that we've put together in order to make the short-term decisions. And then possibly with the longer-term decisions, we're going to rely on a more in-depth process possibly given the fact that there's going to be that major twice-cut once factor involved in it due to its long-term nature. So factors that will be involved, there's going to be, of course, the economic factors that involved social factors, personal factors, daily buying habits. These are all kind of things that are going to be grouped together within our buying activities. And typically, we would want to group these things together with regards to our short-term buying and our long-term buying habits in terms of what are the best habits we can build for the day-to-day to build our habits for the short-term and that fit these needs and what are going to be those kind of habits or how might we want to alter those habits if we're making larger kind of purchasing decisions. One objective is simply not to spend our entire current income, which seems kind of obvious. But obviously, that's one objective we want to reach at some point in time. At some point in time, we have an arc in our lives in terms of how much we spend with regards to our income level. And one objective will simply be, I want to spend less than the income that we have in setting up strategies to do that possibly taking some of the income that we're having from, say, our work and putting it directly into a savings account instead of into our checking account, for example. Overspending leads to misuse of credits. So obviously, and this is a common trap that people get into, is just simply get it into the habit of overspending and get it into the habit of using credit. And oftentimes, people get into this happen because they look at things like the government and they say, well, look, the government has, they made up a whole theory called monetary theory or something. They say you could just spend forever, right? That's got to be the way to do it or something like that. So, you know, you could see how you can kind of, even the government can, well, more so the government can kind of rationalize spending more than more than you have. But obviously, if you were to do that just logically, that's going to cause a problem at some point down the road. So buying strategies. So when we're thinking about purchasing items, timing will have a factor. The price will change with the time of year. So different, it depends on what we're buying. But the time, you know, we want to optimize. We want to take into consideration what is the best time to purchase something? Am I going to be purchasing? Do I want to be purchasing the newest item that's going to be out there? Or do I want to purchase like if I'm talking about a car, the last year's model, like when does it go on sale? And those kind of things are going to be cyclical in nature typically. So you can think about the yearly timing cycle. And then you can also think about the business cycle in general. Where are we at in terms of the general business cycle? So purchase location. When we're thinking about the location where we're going to make the purchase, there's going to be different items that we want to be taking into consideration and balancing between. And some of these factors may be weighted more or less, depending on the purchase that we are making and our particular desires and needs. They could include things like how close is the location that we're going to make the purchase at? How much time and effort does it take us to go from here to the purchase location and get whatever we're going to get and take it to wherever we want to be putting it. We want to think about the price per location. Clearly the prices can change from location to location. Are we looking at like a brand name type of price or especially type of area? Or are we going to a discount type of location? We could have the selection. Are we going to a location that has a wide range of selection? Or are we going to a location that's specialized in a particular area? For example, and what kind of services are also going to be included at the particular location? Again, these are balanced things out. We'd have to balance these things out, depending on what it is that we are purchasing and our particular desires and tastes. To think about different locations, brand comparisons, of course. You've got the private label or store brands versus the national brands. Price strategies. A common price strategy is to break down the price to a unit price for standardization. Not so easy to do for something like the purchase of a car where you have basically one unit. But if you're purchasing something that can be broken down into units, possibly units by weight or units by item, then you could try to break it down by those individual units, making it easier to make comparisons between one purchase item or possibly one brand versus another brand. Coupons and rebates, of course, are going to be things that we need to take into consideration with regards to the price. The tradeoff between store convenience and higher prices. So oftentimes, we have to make this tradeoff. We're not just going to possibly go to the place that has the lowest prices per se if it's going to be less convenient. So convenience is something that's going to be important in our particular decision-making strategy and making that tradeoff between the convenience and the prices. Tradeoff between ready-to-use products and higher prices. So oftentimes, if we're buying something that's already basically pre-made, it's already ready to go. You just take it out of the box and you're good to go versus the items that possibly take a little bit more work. Then there's value in that. There's value for something to be pre-made, but you got to make that tradeoff between the higher price that usually will be input in place and the ready-made output. Online sources and research can save money. Obviously, we have a lot of a huge benefit these days with the research being able to be done much more easily than it used to be in the past. Of course, you had to go from place to place or call around and compare the prices from place to place. Now you can make a lot of comparisons just with online tools, and that is a huge strategy to take into consideration as well. Buying process, number one, what would the first thing most people would want to most likely do when you're buying something that's a larger purchasing type of item, do an online search. You want to search around. You want to see what other people think about it. Where are the items going to be offered and get your preliminary concept from an online search. And then you can compare, of course, the stores. And then once you make your decision, make the purchasing process. And then number four, plan for future purchases. And notice like many things, especially in the finance area, we have a circular kind of process, right? And this would be our normal purchasing process. We do our research. We compare the stores. We come to the decision. We make the decision. And then we try to figure out what we learned from the process so that the next decision we can make can be easier. And note that when you're purchasing smaller items, then this becomes kind of a habit, becomes kind of second nature. You could do some trial and error. You could go to different stores. You could do different research and so on. When you're going to larger purchase items, then you're going to want to spend more time on the research and the comparing of the stores and so on because you don't have as much tinkering flexibility. You're not making multiple decisions in a short period of time. You're not buying groceries, which you're going to do every month at least. Whereas when you're making the small decisions, so the large decisions are, you're in a little bit more of an unknown territory. You don't have that tinkering time, so you got to spend a little bit more time on the comparison of the stores and your purchasing decision process.