Copyright Goodheart-Willcox Co., Inc. 22 E Q ssential uestion Terms Your Financial Future There are many important factors and forces that influence your financial life now and in the future. Government actions and advancing globalization affect personal finances as well. Individually and together, these factors will cause you to redefine your financial needs, priorities, and goals over time. Some of these factors include economic conditions, demographics, culture, and changing technology. Economic Conditions Economic conditions are the state of the economy at a given time. When the economy is on the upswing, people are generally optimistic. Businesses make money, grow, and hire more workers. People who want to work can find good jobs. Their future income is fairly secure and they can pay their bills. If they plan carefully, they can save and invest for the future. However, when the economy is plagued by economic conditions, such as recession, inflation, or interest rates going up or down, managing personal finances becomes important and challenging. Recession is a period of slow or no economic growth. It can have a major impact on personal money management. This is especially true for those who are out of work or whose incomes are stagnant. Recessions spread uncertainty and pessimism over the entire economy. Consumers spend less and save more if possible. Businesses cut back and unemployment rises. Section 1.3 Financial Influencers Objectives After studying this section, you will be able to: • Identify and explain factors that impact an individual’s financial future. • Describe how the government influences the economy. • Explain how globalization influences a person’s finances. economic condition recession inflation interest demographics culture technology media entitlement globalization What factors influence your financial future?