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Part II: Managing Your Money
Cory and Tisha are back asking for your help, only this time the topics are cash management, credit use, and major purchases. Tempting credit card offers continue to come in the mail. Recall that they have Visa, MasterCard, Discover, and American Express credit cards, as well as several store cards, with a combined average balance of $1,300. Minimum monthly payments equal approximately $50, although they typically pay $100 per month.
Tisha's sister and her husband just bought their first home, making Tisha even more anxious to move from their rented house. Cory wants to wait a while longer before buying a home and has suggested that they should replace their older, high-mileage car. Cory and Tisha realize that funds for another payment are limited, not to mention money for a house payment. Their options are to reduce the payments on their credit cards and to reduce other expenses. At any rate, $300 a month seems to be the maximum amount available for an auto loan, not to mention any likely increase in their auto insurance premium associated with the new vehicle. Help them answer the following questions.
15. Help Cory and Tisha apply the four steps of the smart buying process to decide whether or not to replace their car. What sources of consumer information might be useful to them?
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Chapter 8 Solutions
Personal Finance, Student Value Edition (8th Edition) (The Pearson Series in Finance)
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Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning