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Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes, needs, and expenses at various stages of life

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Page 1: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Essential Standard 2.0Understand Economic Challenges of Individuals and Families

Objective 2.01 –Understand lifestyle conditions and

typical incomes, needs, and expenses at various stages of life

Page 2: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Essential Questions What lifestyle conditions may lead to economic

challenges for individuals and families? What are the stages of the financial,

individual, and family life cycles? What events and activities typically occur and

bring financial needs at various stages of life? What are typical career and income

characteristics of people at various stages of life?

What are typical expenses of people at various stages of life?

Page 3: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

What are Lifestyle Conditions???

They are conditions that influence financial planning during each stage of life.

Many lead to financial and economic challenges

What do YOU think they include?????

Page 4: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Lifestyle Conditions…….. Age – set of consecutive ages that tend to

have similar incomes, needs and expenses Dependents – number of persons relying

on a person for financial support (children, spouse, parents, other relatives)

Economic Outlook – inflation, recession, depression, unemployment rate, interest rates

Education Level – less than high school, high school, associate’s degree, bachelor’s degree, master’s degree, doctorate

Page 5: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Lifestyle Conditions…….. Employment Status – employed, self-

employed, unemployed; part-time, full-time

Health Condition – chronic or debilitating illnesses, injuries, disabilities

Marital Status – single, married, divorced, widowed

Page 6: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Life Cycles Financial Life Cycle – the progression

through stages of life and ways in which people use money and accumulate wealth

First stage - you learn to protect your wealth Second stage - you accumulate wealth Third stage - you pass your wealth on

***** DECISIONS AT EACH STAGE AFFECT OPTIONS AT THE NEXT STAGE*******

Page 7: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Individual Life Cycle

Individuals move through stages as they move from adolescence into adulthood

There are various stages of adult life Each stage is considered a growth

stage that leads to different financial opportunities and challenges

Page 8: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Family Life Cycle

Families also move through stages, but tend to have different needs, wants, values, and priorities during these stages, as well as different resources

However, both the Individual and Family Life Cycles parallel each other

Page 9: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Stages of the Life Cycle Incomes tend to vary with age, level of

education and work experience

Needs arise because of activities and events that occur at different stages of life

Expenses tend to vary throughout life as life cycle needs produce financial needs

Page 10: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Life Cycles and StagesStages in the

Financial Life CycleStages in the Individual Life

Cycle

Stages in the Family Life Cycle

High School Student 13-17

Son or daughter in a parenting family

Stage 1: Basic Wealth ProtectionQuit Giving money to others (think carefully about spending); start job/career; form a family

-Young Adult 18-24-25-34 with/without kids-35-44 with/without kids

-Beginning Family - Newlyweds-Child-bearing Family-Expanding-Parenting Family - Developing

Stage 2: Wealth AccumulationGive money to yourself; peak earning years

­Midlife ages 45-54­Pre-retirement 55-64

-Launching Family – Middle Age-Mid-years Family

Stage 3: Wealth Distribution Live off accumulated wealth; give money to chosen ones (heirs)

Retirement 65 and over Aging Family

Page 11: Essential Standard 2.0 Understand Economic Challenges of Individuals and Families Objective 2.01 – Understand lifestyle conditions and typical incomes,

Variations in the Family Life Cycle

Individuals choose not to marry Individuals spouses die or leave Couples choose not to, or find they are unable to, have

children Families skip, overlap, or repeat stages, which creates new

sequences Families have additional children several years after first

group of children Families decide to adopt after their children are in the

launching stage Families are involved in second marriages; two families blend

and stages are repeated Families create extended families by bringing aging relatives

into their homes