Different clients face different needs in different stages of their lives. When you work together and develop a financial plan, the issues begin to look manageable. Clients often have major issues they avoid addressing because of the enormity of the problem. Snoopy, Charles Schultz' famous beagle, once counseled, "No problem is so big or complicated that it can't be run away from." Clients try, however, and it keeps them awake at night.
So what do your Generation X clients obsess about?
Who is Gen X, anyway?
Market research firms divide the population into segments based on age. Baby boomers are the most famous example. The baby boomers' kids, born between 1966 and 1985 are Gen X. Now aged between 30 and 50, there are approximately 50 million out there. You've heard the statistics. They may be the first generation to have a lower standard of living than their parents. They have trouble in the job market. Their college degrees aren't the same passport to middle class life their boomer parents enjoyed.
They grew up when AIDS became an epidemic. Their wartime experience was in Iraq and Afghanistan. They saw the rise of Ronald Reagan's popularity and the fall of the Berlin Wall. If they were between 15 and 35 years old at the Millennium they had a front row seat for the bursting of the dotcom bubble and the real estate decline that followed.
Technology has been their constant friend. They grew up with smartphones. They communicate via texts and emails. Gen X is much more comfortable with social media than their parent's generation. This has had a major impact on their buying habits. They rely on sites like Angie's List and TripAdvisor instead of brand advertising. Gen X is distrustful of big companies.
What does Gen X worry about?
Every generation wants to provide for their children. It's human nature to want kids to have the best future their parents can provide. Education plays a major role. Parents decide where to live based on the quality of school districts. But free education only takes you so far. College looms.
The Gen X client likely has children. You do the math and assume parents who are 30 to 50 years old have children aged 10 to 30. Maybe not. Lots of couples are focusing on careers first, postponing having children until their mid 30's. Your 40-year-old parents might have 5-year-old offspring.
College educations paid off for some Gen Xers. Doctors, for example, begin earning serious money in their early 30's. Those with liberal arts degrees with limited career potential don't want their children to face the same problem. On the other hand, they know college will be expensive and they are avoiding the issue.
As their advisor, you've included college in their financial plan. Because it's a daunting number, your Gen X clients may be in denial, saying, "We've got plenty of time" or "The grandparents will pay. They love those kids" or "Inheritance will take care of it."
You helped others before so you see things differently. They might accept the fact that the cost of a college education 15 years from now might top $200,000. They are probably unaware the U.S. Department of Agriculture estimates the cost of raising a child from birth to age 17 at more than $245,000 (chart at end of article). Where does the money go? Childcare and education add up to 18 percent on their own. But the story becomes even more urgent. Between 2000 and 2014, the Consumer Price Index (CPI) rose by 69.1 percent. Meanwhile, the cost of college tuition and fees grew by 130 percent.
