Personal Finance 2.01 PPtA Lifestyle

1. 2.01 Lifestyle Conditions
Students 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 class
notes page for this objective to answer the questions.

2. 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?

3. Lifestyle Conditions
Influence financial planning
during each stage of life.
Many lifestyle conditions lead
to financial and economic
challenges.

4. Individual Life Cycle
Individuals 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 years
Each growth stage leads to different financial opportunities and
challenges

5. Life Stages Affect Life Choices
Practical Application:
Life Insurance professionals recognize the affect of life stages for insurance
protection. Life Insurance protection is based on individual needs, incomes, and
expenses.
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

6. 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

7. Financial Life Cycle
Typical progression of individuals/families through stages of
life
Depicts ways money is used and wealth is accumulated
during these stages
1. First learn to protect wealth, then
2. Accumulate it, then
3. Prepare to pass it on
Decisions at each stage affect options at the next stage

8. Key Element: Creating Your Own Plan

9. Family Life Cycle
Families also move through Families have different
a series of stages called the needs, wants, values, and
Family Life Cycle. priorities during the
Each family unit is various stages, as well as
unique. different resources.
Stages of the family tend to
parallel stages in the
Individual Life Cycle.

10.  Individuals choose not to marry
Variations in
 Individuals whose spouses die or
Family 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

11. 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. Ages
2. Education levels
3. Dependents
4. Economic Outlook
5. Employment status
6. Health conditions
7. Marital status

12. Incomes, Needs, & Expenses
Incomes, 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.

13. 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?

14. Expenses – Costs of Living
Examples:  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.

15. Satisfying Needs and Wants
What are needs? What are wants?
Things required in order to live Things that add comfort &
pleasure to your life
How do you as a consumer satisfy your wants and needs?

16. HARD TIMES
Brainstorm 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?