58 Chapter 2 Making Smart Decisions
Goodheart-Willcox Publisher
Figure 2-11 Continued.
Financial Aspects of the Family Life Cycle
Stages in the Family Life
Cycle
Career and Income
Characteristics
Typical Expenses and Obligations
Developing Stage
Toddler, preschool, and
elementary school years
Children become primary
focus
Job advancement likely
Increasing income
Increasing job responsibilities
Move to larger living space
Additional home furnishings
Property and income tax increases
Increased living expenses
Retirement contributions
Adolescent years
Involvement in school
activities
Preparation for launching
stage
Continuing job advancement or
possible career change
Possible return of mother to the
workforce
Income still increasing
School expenses for extracurricular activities
Savings and investments
Savings for education
Charitable contributions
Travel
Adolescents’ spending
Income and property taxes
Launching Stage
Children leave home
Parents adjust to “empty
nest”
Heavier job responsibilities
Peak performance years
Income may peak as well
Benefits may increase
Retirement planning becomes
a priority
Home improvements or new, smaller home
Replacement furnishings
Education and tuition costs
Travel
Retirement savings
Income and property taxes
Weddings of children
Aging Stage
Parents focus on each
other
Children marry
Grandchildren arrive
Elderly parents may
require care
Job responsibilities and
earnings begin to level off
Retirement and estate planning
take form
Travel, recreation, and adult education
Care for aging parents
Increased savings and investments
Gifts to help children get established
Income and property taxes
Long-term care insurance
Retirement years
Establishing new routines,
interests, and hobbies
Grandparenting
Part-time or volunteer work
Social Security income
Income from retirement
savings
Wills and estate plans are
revised as needed
Health insurance
Possible relocation to a retirement area
Travel
Health care and medications
Taxes
Long-term care