Chapter 2: Financial Lifecycle

Question 1

Needs

Answer 1

Items that we cannot do without in order to survive (e.g. Food).

Question 2

Wants

Answer 2

Items we would like to have but are not essential to survive (e.g. Computer games).

Question 3

Financial Lifecycle

Answer 3

A series of stages which most people pass through during their life. Each stage has different financial goals, income and spending.

Question 4

The Six Stages of the Financial Lifecycle

Answer 4

1. Childhood (0-12yrs)
2. Teen/Young Adult (13-20yrs)
3. Starting Career (20-30yrs)
4. Setting up a Home (25-35yrs)
5. Growing Career and Family (30-65yrs)
6. Retirement (65yrs onwards)

Question 5

Income and Expenditure for Childhood (0-12yrs)

Answer 5

Income: Pocket Money, Gifts.
Expenditure: Sweets, Presents.

Question 6

Income and Expenditure for Teen/Young Adult (13-20yrs)

Answer 6

Income: Part Time Job, Gifts.
Expenditure: Technology, College.

Question 7

Income and Expenditure for Starting Career (20-30yrs)

Answer 7

Income: Wages, Social Welfare.
Expenditure: Rent, Car.

Question 8

Income and Expenditure for Setting up a Home (25-35yrs)

Answer 8

Income: Wages, Overtime
Expenditure: Mortgage, Household goods.

Question 9

Income and Expenditure for Growing Career and Family (30-65yrs)

Answer 9

Income: Wages, Child Benefit.
Expenditure: School Expenses, Insurance.

Question 10

Income and Expenditure for Retirement (65yrs onwards)

Answer 10

Income: Pension, Interest on Savings.
Expenditure: Medical Expenses, Leisure.

Question 11

Financial Goal

Answer 11

A target that you have for your money to deal with future financial needs. Example: Saving for a comfortable retirement.

Question 12

Childhood (0-12yrs) Goals (1)

Answer 12

Goal: Understanding Money.

Question 13

Teen/Young Adult (13-20yrs) Goals (2)

Answer 13

Goal: Start Savings Plan.
Goal: Keep basic financial records.

Question 14

Starting Career (20-30yrs) Goals (3)

Answer 14

Goal: Learn about Taxes.
Goal: Keep personal financial records.
Goal: Save for a big purchase (car/holiday).

Question 15

Setting up a Home (25-35yrs) Goals (2)

Answer 15

Goal: Purchase a home.
Goal: Take out home insurance.

Question 16

Growing Career and Family (30-65yrs) Goals (2).

Answer 16

Goal: Grow your pension.
Goal: Financial Security for Family.

Question 17

Retirement (65yrs onwards) Goals (2)

Answer 17

Goal: Enjoy life and manage savings.
Goal: Make a will.