Topic 2 - Personal Life Cycle Flashcards
1
Q
What changes as you go through different life stages?
A
- income
- levels + patterns of spending
- amount of savings + attitudes towards saving
- amount of debt + attitudes towards debt
- attitude to risk
- life events
2
Q
What are needs, wants and aspirations?
A
Needs - essential item
Wants - something desirable but optional
Aspiration - item or experience you wish to have in the future
3
Q
What factors affect life events?
A
- location
- income
- health
- status
4
Q
How does location affect life events?
A
- ages when ppl can start/leave school varies (influences education + jobs)
- opportunities to work varies (unemployment rate varies)
5
Q
How does income affect life events?
A
- low income may delay ppl getting married, having children + buying own home
6
Q
How does health affect life events?
A
- poor health/disabilities: shorter life expectancy
- may become dependent on others financially
7
Q
What unforeseen circumstances can affect a persons life cycle?
A
- unexpected inheritance, promotion at work, winning the lottery
- family/friends jealous, breakdown of relationships
8
Q
What are the four different types of risk?
A
- Physical risk
- emotional risk
- risk to reputation
- financial risk
9
Q
How are attitudes to financial risks related to the life cycle?
A
- older ppl risk poor health: may lead to paying for health insurance
- older ppl consider risk to family if they die: may lead to take out life assurance cover
10
Q
What are the attitudes to risk?
A
- risk averse: reluctant to take on risk
- risk tolerant: willing to take a risk
11
Q
What social external influences have an effect on the life cycle?
A
- demographic changes
- changing attitudes + habits (attitudes to work, marriage, debt)
- retirement - ppl have to plan for longer retirement (inc life expectancy)
- inc in single parent + single person household
12
Q
What economic external influences have an effect on the life cycle?
A
- economic boom: average income inc + employment inc
- recession: average income dec + unemployment inc
- changes in employment patterns (inc career mobility = inc employment opportunities)
- inc in number of older ppl working
