1. 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

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 Stages in the Financial Life Cycle Stages in the Individual Life Cycle Stages in the Family Life Cycle High School Student 13-17Son or daughter in a parenting family Stage 1: Basic Wealth Protection Quit 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 Accumulation Give money to yourself; peak earning years ­ Midlife ages 45-54 ­ Pre-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 overAging Family

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