The role of money
Several factors affect the role of money, and how individuals and businesses use money.
How people use, spend or save money depends on their attitude to risk. People who are willing to take risks are likely to spend, while people with a less risky attitude are likely to save.
What is your attitude to money? Try the quiz.
Discuss with a friend.
Are you similar or different?
Which of you is 'better' with money?
Your life-stage also affects your attitude to money:
Stage |
Potential financial needs |
Potential implications |
|
Childhood (0-12) |
No money needed and no bills to pay. | Dependent on parents/relatives for money – may receive some pocket money. Parents and relatives save on their behalf. |
|
Teenage years (13-18) |
Need money for socialising or travel. Leave home or get a job. | Receive pocket money or have a part-time job. |
|
Young adult (18-25) |
Attend university or start a new job or may be unemployed. Work in a junior role or apprenticeship. | Need money at university. May apply for student loan. Pay rent if living away from home – may save to buy a house. |
|
Middle age (25-60) |
Employed in a more stable/advanced position. Likely to have left home. Cohabit or get married – may have children. Buy bigger goods e.g. car, family holidays, household goods. | Pay rent/mortgage. Spend money on childcare/children's goods/education. Spend money on holidays, eating out, entertainment. Pay towards pension. |
|
Elderly 65+ |
Retired. Work part time. May need to move into a home for the elderly/sheltered accommodation. | Receive a private and/or state pension Mortgage repaid so reduced monthly expenditure. Need to pay for social care. |
Life events can also shape people's attitude towards money e.g. having a new baby, losing a job, long term illness and so on.