| The Life Cycle
People everywhere are at different stages of The Life Cycle. Some are buying their first home, some moving into their first apartment. Some are having their first baby, some sending away their first to college. At some point in our lives we have all had the moment where we think, �I wish that when I was twenty or thirty I had the knowledge I have today. I could be so much farther ahead in life.� We learn from our experiences and from the experiences of others. But there is one constant and that is we all go through The Life Cycle. Spending behaviors generally follow the succession of age development as one travels through The Life Cycle. But if we all end up at retirement with many of the same issues as everyone else, why is the pattern not changing? The Life Cycle can be thought of as a mountain where in the beginning the climb can be difficult and as you get older you reach the top of the mountain where everything becomes clearer as you start downhill towards retirement. Or so we think. For most of us, retirement can present its� own challenges. As we move through The Life Cycle and towards retirement we have to make changes. We come to a very similar point in life, similar to exactly where we began. Why don�t we just take the shortcut then? We would be much farther ahead in life. For most of us, The Life Cycle plays out like this: - At 16, we�re ecstatic to have a clunker car that runs, anything to just get us from point A to point B. Having any car at 16 is the biggest thing in our lives. - Then in our twenties, as we move up the job ladder, our pay is on a slow steady up climb. We�re excited to spend that extra money, purchasing a newer car, maybe saving for our first place. - With the purchase of our first place or the move into our first apartment brings excitement all of its� own. We don�t care if we have mismatched furniture, we�re just excited to have furniture. And if you�re moving into a first home on a shoestring budget, appliances can be an altogether separate issue. Hand-me-down appliances are welcomed. - Then as we approach our thirties, our families start to emerge, which usually produces a dual income. We spend this extra money, upgrading our homes, our cars, buying recreational items, going on vacations getting new furniture and new appliances. Plus, we have added expenses of the cost of living as our family grows. - The thirties and the forties bring good jobs. We upgrade what we have, and have extra money to spend on whatever else we would like. Life is nice with plenty of discretionary income. - In the midst of this, some are swept up to try to keep up with friends and neighbors. Keeping up with The Jones�s sweeps most of us up into a string of bad financial decisions. - Retirement is right around the corner as we approach our fifties and early sixties. Even with the best planning, retirement can be a tight time financially. With empty nests and not wanting the upkeep and expense of larger houses, we start to downsize. Cutting our expenses and learning how to live on a fixed income becomes our focus. - We realize what we really need in life and it�s not the big houses, or the new cars. We start to make the most of what we have accumulated in life. Several non-conformists groups along with a string of new age financial planners are trying to break this cycle and promote a new pattern. They say to cut your losses now, downsize, and realize that retirement can be just around the corner for any of us. Who says you can�t retire at 40? Their biggest tip: We need to keep our savings up with our pay increases, not our spending. For related articles see� The Debt Game: Don�t Play it Christmas Creativity, how not to go in debt this year I made over $100 selling my old CD�s and DVD�s to a new website |