Essential Standard 2.0 Understand Economic Challenges of Individuals and Families

1. 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

2. 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?

3. 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?????

4. 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

5. 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

6. 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*******

7. 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

8. 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

9. 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

10. Life Cycles and Stages

11. 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