Income management of a family should be related to the different stages through which the family passes. Long time family picture should be paralleled with the probable long time picture of income. Family passes through three stages viz, beginning, expanding and contracting.
Demand for income changes in tune with the three stages described below.
Family stage
Sub stage
Demand on Income
Beginning
Expanding
Contracting
Period of Establishment
Child bearing and preschool
Elementary school
High school
College
Vocational adjustment of children
Financial recovery
Retirement
Light to heavy Heavy Light to heavy Moderately heavy Heaviest Heavy Light to heavy Lightest
Each phase makes specialized demand upon the family income. The above chart shows the impact of the family’s demand on income at the various stages and phases of life cycle. In order to show, how the estimating for each stage of the required plan for income use. The family stages have been super imposed upon two of the life time income profile. The following figure (Fig.5.1) shows the three family stages and the phases of each superimposed on the life time income profile of a wage earner.
The life time income profile of a professional man is depicted in the following figure (Fig-5.2).
In both the cases the force of greatest demand is during college and recovery phases, the second force of demand are in vocational adjustments. The professional group has another period of heavy demand during the time the children are being professionally trained. The elementary school phase is a period of light demand. The lightest for both groups is during retirement.
The professional man’s income tends to stay higher longer than the wage earner because of the character of his employment plus the possibility of greater accumulation of funds supplemented to the earned income.
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