MONEY: Personal Life-cycle
What you need to know...
- We all will go through it; but what are the different stages in the personal life cycle? (maybe this video will give you some inspiration)
- How does income, expenditure, savings and debt change over the personal life cycle? (the links below will give you a headstart with your research)
- The Economic problem: what's it all about? The answer....scarcity and choice! (see video below)
Income over the Personal Life Cycle
- People's incomes tend to be higher during their peak earning years than during their younger or older years. When people are young, they are often getting an education and are just beginning their careers. As they age, they tend to get promotions or take higher paying positions.
- Income generally declines after retirement. Consumption, on the other hand, is more evenly distributed over time. When people are young, consumption is often higher than income, as they take out student loans while in college and buy new cars and homes after graduation. They do this by borrowing against their future income. In other words, people tend to be in net-spenders when young.
- During their peak earning years, people tend to be net savers as they pay off loans and save for retirement. After retirement, people are once again net spenders as they use their savings to finance their retirement. Thus, people's consumption is dependent not so much on their current income, but their permanent income, their average level of income over their lifetime.
- The influence of the UK government on the incomes of Late Adults (see video below)
Stretch & Challenge: Needs and Wants
- What are the differences between needs and wants? Left stranded on a desert island you would soon realise the difference (what would be the top ten things you would need to survive?)
- Add your response using the website's Blogging Forum