Title: Instructor Introduction
Course: Personal Finance - Buying Goods and Services - Sample Syllabus - for Canvas Upload > Section: Personal Finance - Buying Goods and Services - Sample Syllabus

Standard and Benchmarks

National Standards for Financial Literacy

Standard 2: Buying Goods and Services

People cannot buy or make all the goods and services they want; as a result, people choose to buy some goods and services and not buy others. People can improve their economic well-being by making informed spending decisions, which entails collecting information, planning, and budgeting.

Grade 12 Benchmarks

1. Consumer decisions are influenced by the price of a good or service, the price of alternatives, and the consumer’s income as well as his or her preferences.

2. When people consume goods and services, their consumption can have positive and negative effects on others.

3. When buying a good, consumers may consider various aspects of the product including the product’s features. For goods that last for a longer period of time, the consumer should  consider the product’s durability and maintenance costs.

4. Consumers may be influenced by how the price of a good is expressed.

5. People incur costs and realize benefits when searching for information related to their purchases of goods and services. The amount of information people should gather depends on the benefits and costs of the information.

6. People may choose to donate money to charitable organizations and other not-for-profits because they gain satisfaction from donating.

7. Governments establish laws and institutions to provide consumers with information about goods or services being purchased and to protect consumers from fraud.

Buying Goods and Services - Talking Points

Description - Students will learn the importance of using thinking and decisionmaking skills when buying goods and services. They will learn about the trade-offs in allocating funds for their spending decisions. They will also make purchase decisions based on available options, price, and  preferences.

Talking Points

1. The fundamental consumer problem is a scarcity of resources from which consumers are able to earn income. This means that people don’t have enough income to buy all the goods and services they would like to have. Thus, they must decide how to spend (or allocate) their income in order to best satisfy their unlimited wants.
2. Two general assumptions are made about people’s preferences (or the satisfaction they get from consuming goods and services):

1. a. More is preferred.
2. b. Each additional unit of a particular good tends to add less satisfaction than the unit before it.

3. When buying a good or service, people evaluate the good or service according to its features. People maximize their satisfaction by purchasing those goods or services that give them the most satisfaction per dollar spent. So, their preferences, the prices of goods and services, and the prices of alternatives matter in making spending decisions.
4. Consumers may be influenced by how the price of a good is expressed. The price of products may be advertised in terms of the amount of payments for a given period of time rather than advertising the actual full price.
5. A financial goal is a monetary target to be met by a specific time in order to purchase a good or service (car, down payment on a house, college education, start-up funds for a business, retirement, and so on).
6. Decisions people make to consume products can have positive or negative effects on others. For example, a decision to be vaccinated has effects on others because a disease is less likely to spread.

7. Financial goals are met with a systematic financial plan for saving (deciding how much to save each period), investing (deciding what financial assets to purchase with income saved), and spending.
8. People choose to donate to charity because the benefits—the satisfaction they receive—are greater than the cost of the donation.
9. A financial plan largely depends on a. the amount of the goal, b. how long a person has until the goal must be met, c. how much can be saved each period, and d. the rate of return earned on investment assets.
10. A budget is a cash-flow plan that decides how a person’s income is to be spent each period (all income each period is essentially spent on goods and services, taxes, and savings to purchase goods and services in the future).
11. There are three categories of spending in a typical monthly budget:

- a. regular spending (goods and services typically purchased every month),
- b. irregular spending (financed by short-term saving for goods and services purchased on a non-monthly basis during the year), and
- c. future spending (financed by long-term saving, or investment, for purchasing goods and services more than a year away).

12. Making a budget involves trade-offs—allocating more spending to one item and less to other items—so one must consider the satisfaction per dollar spent on each item.
13. Governments establish laws and institutions to provide consumers with information about goods or services being purchased and to protect consumers from fraud.