1.6 Using money to meet changing needs

People use money to what?

• Make payments

• Save

• Borrow

• Record value

At one time an individual might be using money for one ore more of these purposes

What affects the combinations people use money for?

Certain combinations are more likely at certain times in a persons life

Young children

• Young children receiving an allowance are likely to spend most of their money

• They may save the financial gifts they receive for higher-value items that they want and for unspecified items in the future

Young adults

• Young adults who have just left home and are earning a low wage are likely to spend most of their money on living expenses

Adults

• Adults with more jobs experience and better wages may spend money on living expenses and ‘fun items’

• Borrow money through a mortgage to buy a home and save for the future

Parents

• Parents might borrow money to play for items such as family-sized car

• They may spend most of their income on living expenses and gifts for their children and find it difficult to save

Middle-aged people

Middle-aged people are more likely to have paid their debts and to be saving for their old age

Retired people

Retired people are more likely to be spending all of their income, which will have fallen since their years in employment

When people plan their finances what do they need to consider?

How much they can afford to spend, save and borrow form their income to be able to pay for the items they want now and in the future

The proportions of spending, saving and borrowing is likely to vary at what?

At different stages in a persons life