Your attitude to money management is not the same across different stages of your life. Indeed your attitude to money management changes as you grow older and you assume greater life responsibilities. The stages in your life journey when it comes to money management are basically 5.
The Table below presents how your attitude and behaviour to money management will/has change/d across this 5 life journey money management stages and will continue to do so.
Most probably financial capability skills are learnt at home – though this is dependent on the parent’s attention to money management. You may have financial literacy education at school if follow the commerce / economics / accounts stream. May be asked to do carry out home chores to obtain pocket money, or alternatively money is dished out to you. You may start doing part time job, and if you go to Sixth Form you will have your stipend. Alternatively at 16 years of age you may take up a full time job. Likely to open your first bank account and have your first credit card.
Young Adult – Single
If you are in this age group you are likely to live for today, giving little thought to the longer term. You may plan ahead for holidays or buying a car, but little else. You are probably aware of the need to save but in reality you do not. At this stage of your life stage, retirement and pensions are a different universe. Loans taken whilst you were studying are likely to be ignored as you are not earning enough to pay them back. You are unlikely to see this money as a serious debt. You enjoy the financial freedom a salary brings you and you are to willing to get your hands on a credit card/s your bank makes available to you.
Adult – Starting a Family
This group is split between those trying to save a little for their future and living for the moment. Some have young families where spare cash is scarce. Thinking about retirement seems like years away. Just a few are conscious of the need to save something for a time when they will finally give up work. Pensions have a negative connotation. They try to live within their means but don’t hold back using credit cards or taking out loans if they need or want to.
Adult – Family Building
This age group enjoys building up their careers, improving their lifestyles, spending their ‘hard earned cash’ and using credit cards. But this segment realises that in 15 years or so they may want to start planning for their retirement and they become a little more engaged with pensions. Some start to focus a little more on saving too. Those that have gone through divorce, particularly women, face a worrying financial future.
Older Adult – Empty Nester
This group is quite pragmatic about living within their means and trying to save a little as and when they can. Life experiences have allowed them to identify the ‘phases’ during which money has been scarce, such as moving out of the family home, buying a property, having a family. Similarly, they are aware of the periods when they have had a little more disposable income, such as when dependents move out, or careers have developed. Several now see retirement as one step away. Some wish they had started thinking about retirement earlier and some women wish they had maintained financial independence during their family forming years. Most in this segment are quite good at managing their day-to-day finances but worry about how to do more than basic savings and paying into their work pension scheme.
The reality of retirement is here, this group find it intimidating to make sense of financial matters. Some try to listen to financial programmes or read articles in the press but struggle to deal with how they will manage financially in their retirement years. A high proportion can’t see a time when they will stop work completely; some are still supporting their adult children living at home. This generation has tried to live within their means and has avoided the over use of credit cards. Many feel they will not have enough to live on during their retirement years.