Goodheart-Willcox Publisher
Figure 2-11 Career and income characteristics, as well as typical expenses and
obligations, tend to follow a pattern at different stages of the life cycle.
Section 2.3 Young Adult and Family Finances 57
responsible for any resulting damages or unpaid rent. Be sure all tenants
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handle early departures or other violations by one party.
Generally you can avoid future problems by discussing these issues in advance.
Once you agree on major issues, it is a good idea to put your “house rules” in
writing. A written roommate agreement is a document that contains the rules
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Family Life Cycle
After a period of living alone or with roommates, many adults marry
and start families. Their financial responsibilities increase dramatically again.
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important factors affecting family budgeting decisions will be age and stage
in the family life cycle.
The family life cycle is the stages a family passes through over its lifetime.
Stages in the life cycle are typical patterns of social and financial behavior
families follow at different periods in the life cycle. Your goals and needs, as
well as earning and spending patterns, will change with each stage. Becoming
familiar with these patterns can provide you with a framework for your own
financial planning. See Figure 2-11.
Financial Aspects of the Family Life Cycle
Stages in the Family Life
Cycle
Career and Income
Characteristics
Typical Expenses and Obligations
Beginning Stage
Marriage
Getting started as a
couple
Establishing a home
Finishing education
Making career decisions
Entering the workforce
Low or no income, with gradual
increases
Living expenses
Tuition and/or repayment of education loans
Auto loan payments and insurance
Life, health, and other insurance
Home furnishings
Savings and retirement contributions
Income tax
Expanding Stage
Infant years
Birth/adoption of first child
Increasing income and job
responsibilities
One or two full-time incomes
Decreased income if wife
leaves work for childbearing
Child care and baby equipment
Education fund
Increased insurance coverage
Prenatal, birth, and postnatal health care
Income taxes
Retirement contributions
(Continued)