Civics Today Citizenship, Economics, & You
Personal Finance and Economics
People make economic choices every day. Factors such as scarcity, supply, and demand influence the decisions that consumers make. It is important for people to be responsible spenders. Consumers should be aware of what they are spending money on and whether they are getting best value for their dollar. Keeping a budget and establishing a savings pattern also helps consumers use money wisely.
For consumers, there are two types of income. Disposable income is the money that
remains after taxes are paid. Discretionary income is the money remaining after paying the necessities. Consumers have the choice on how to spend their disposable and discretionary incomes.
Making a budget helps most consumers match expenses to income. It is important to
make a budget and stick with it to avoid going into debt. Budgeting a portion of income to be saved in a savings or money market account allows consumers to save towards long-term financial goals.
To achieve financial goals, whether short-term or long-term, consumers must monitor
their spending habits, save consistently, and avoid impulse buying. The earlier that
financial self-control is developed the easier it will be for younger consumers to maintain financial stability as they get older.