2.01 Lifestyle ConditionsStudents will understand lifestyle conditions and typical incomes, needs, and expenses at various stages of life.NOTE: When questions are asked on the PPT, use the classnotes page for this objective to answer the questions.
ESSENTIAL QUESTIONS:What lifestyle conditions What events and activities may lead to economic typically occur and bring challenges for individuals financial needs at various and families? stages of life?What are the stages of the What are typical career financial, individual, and and income characteristics family life cycles? of people at various stages of life? What are typical expenses of people at various stages of life?
Lifestyle Conditions Influence financial planning during each stage of life. Many lifestyle conditions lead to financial and economic challenges.
Individual Life CycleIndividuals move through a series of stages called the Individual Life Cycle Infant, youth, adolescence into adulthood Stages of adult life Prime of life, middle age, senior years, twilight yearsEach growth stage leads to different financial opportunities and challenges
Life Stages Affect Life ChoicesPractical Application:Life Insurance professionals recognize the affect of life stages for insuranceprotection. Life Insurance protection is based on individual needs, incomes, andexpenses. Young & single - less coverage needed Just married – May need more especially if purchasing home, etc. New parents - need life insurance to protect financial future of dependent children Planning for Retirement – long term planning and estate planning goals reviewed and revised
Lifestyle Conditions Age-a set of consecutive ages that tend to have similar incomes, needs, and expenses Dependents- number of persons relying on a person for Education level- less than high financial support (children, school, high school diploma, spouse, parents, other relatives) associate’s degree, bachelor’s degree, Economic outlook- master’s degree, doctorate inflation/recession/depression, Employment status- employed, unemployment rate, interest self-employed, unemployed; part- rates time, full-time Health condition- chronic or debilitating illnesses, injuries, disabilities Marital status- single, married, divorced, widowed
Financial Life CycleTypical progression of individuals/families through stages of lifeDepicts ways money is used and wealth is accumulated during these stages1. First learn to protect wealth, then2. Accumulate it, then3. Prepare to pass it onDecisions at each stage affect options at the next stage
Family Life CycleFamilies also move through Families have different a series of stages called the needs, wants, values, and Family Life Cycle. priorities during theEach family unit is various stages, as well as unique. different resources. Stages of the family tend to parallel stages in the Individual Life Cycle.
Individuals choose not to marryVariations in Individuals whose spouses die orFamily Life Cycle leave Couples choose not to, or 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 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
Variations in Family Life Conditions What is your family’s lifestyle conditions? How have these conditions affected your family’s economic and financial status.?1. Ages2. Education levels3. Dependents4. Economic Outlook5. Employment status6. Health conditions7. Marital status
Incomes, Needs, & ExpensesIncomes, needs, and expenses for individuals and families vary at each stage 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.Expenses tend to vary throughout life as life cycle needs produce financial needs.
Income -Compensation received from work (salary, commission, hourly wage), investing, inheritance What are annual earning for professional degree? What are annual earnings for associate degree? What are annual earnings for a high school dropout? How does unemployment rate compare on each?
Expenses – Costs of LivingExamples: On your class notes page for Rent this objective: List 5 other Car payments items your family has to pay. Groceries 1. Medical insurance & services 2. Taxes 3. 4. 5.
Satisfying Needs and Wants What are needs? What are wants? Things required in order to live Things that add comfort & pleasure to your lifeHow do you as a consumer satisfy your wants and needs?
HARD TIMESBrainstorm to identify several people you know who have experienced financial “hard times”. Neighbor, friend, parents, family members? What possible situations led to their “hard times”?How does your knowledge of this neighbor or family member influence your future decision making? What poor decisions might have led them to “hard times”? What circumstances are beyond their control?
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