Page 550 - Introduction to Business

524 PART 5 Finance

EXHIBIT 15.2
Examples of Personal Goals

Possible Goals Short-Term Long-Term

Minimize your debt.
Pay off college loans.
Build an emergency fund.
Buy a house.
Make home improvements.
Buy a vacation home.
Buy a new car.
Have children.
Finance children’s education.
Buy major luxury items.
Buy new furniture or appliances.
Enjoy an expensive vacation.
Take time off from work.
Start your own business.
Retire early.
Live in style after retirement.
Other.

Education plays a key role in determining a person’s spending patterns. In gen-
eral, college-educated people earn more and spend more than less-educated peo-
ple. As a result, many consumer product companies gear their marketing to those
households with college-educated inhabitants.
People with college educations tend to invest for their future more than those
who have not attended college. People without college educations generally have
less money to invest after immediate needs are met. In addition, college graduates
spend about twice as much on entertainment as nongraduates do. College gradu-
ates account for 60 percent of clothing sales. College graduates allocate 6 percent of
their budgets to health care, compared to barely 4 percent of the less-educated per-
son’s budget. College graduates spend roughly five times the amount on education
that non-college graduates spend.
Personal spending patterns vary tremendously among different people. Your
own spending pattern is affected by many factors, including your age, your educa-
tion, your household income, your personal tastes, and your stage in life. For exam-
ple, older people spend more money on medicine, drugs, and doctors. Lower-
income households spend a larger percentage of their income on food and other
necessities. The percentage of spending on automotive products and services
increases as income increases.
Other factors affecting your spending pattern may include your marital status,
the number of children, place of residence, sex, race, moral and religious beliefs,
and cultural background. Young, unmarried people spend a larger percentage of
income on recreation and clothing. Family priorities shift to educational needs
when children reach certain ages. Members of certain religious groups donate a sig-
nificant amount of earnings to their church, synagogue, or other charitable causes.
Your spending pattern will change as your financial goals and objectives
change. Spending money in a way that generates the highest quality of life, given

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