essential standard 2.0 understand economic challenges of individuals and families objective 2.01 –...
TRANSCRIPT
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
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?
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?????
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
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
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*******
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
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
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
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
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