Spend! Save! Consumer Life-Cycle Planning

Which factors should be considered in developing a basic financial planning and wealth management tool?
Nicholas S. Souleles, Stephen P. Zeldes  | Fall 2009
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Greg and Emily Hunter, two 30-year old professionals, are driving home from a family weekend when the conversation turns to their summer plans. While Greg, an assistant headmaster at a private school, is eager to enjoy their joint earnings now, Emily, an executive and MBA, is more cautious and urges a savings plan. As the pair debate, their conversation touches on investment returns of stocks versus bonds, life expectancies, and goals such as home ownership. In this case students construct a life-cycle planning tool by incorporating the factors driving a consumer's spending and saving decisions, while considering broader economic issues such as interest rates and stock prices.

Case ID: 090323
Supplemental Materials: Teaching Slides, Solutions Spreadsheets , Student Dataset
This case is used in core curriculum

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