Clients can and need different financial planning for differ- ent stages of life — or at least
for different states of mind. A nimble
advisor can adjust to different types of
saving or spending, which can happen
multiple times for the same client, or
family. Here’s one example of those
types of differences.
A rudimentary ledger system helps
my wife and I manage our children’s
allowance and chore money. The ledger
lives in blue marker on a dry erase board
hung in the laundry room.
Almost daily we adjust balances as
our four children get paid for the extra
chores they do or when they “buy”
something where my wife or I use a
credit card to make their purchase. We
add and subtract and circle the new
balance and occasionally erase and start
with the new balance again at the top.
Our oldest daughter is 15 and is
proving to be a reluctant spender. She
evaluates each item prior to purchasing
it, weighing whether she truly needs
the item or just wants it. She’s become
familiar with buyer’s remorse and the
consequences of impulse purchases,
thus is a judicious spender.
Our 13-year-old, lives with a zero balance. He spends everything he earns as
soon as he gets it. If he decides he wants
something, he begins asking for extra
chores to find ways to earn more. He
calculates the total cost of the items he
wants, including tax, and earns only that
amount. We’ve learned that we can’t
allow him to go into debt because he’s
unconcerned with paying it back — he’d
prefer the consequences of debt to the
work to stay out of debt or to pay what
he owes. He’s a spendthrift.
Our twins, aged 10, are a mixed bag.
One is the impulse purchase king of the
world. His bedroom is littered with the
fad items that he and his buddies deem
“cool” at the moment — fidget spinners,
aluminum water bottles, etc. He spends
to fit in with the in-crowd.
His twin sister likes crafts. She especially likes to draw and color. Prior to
coloring she was into sewing and a
child’s sewing machine sits in the corner
of her room covered with fabric scraps.
Now on every flat surface of her room
are pens of different types and colors.
The pens also are everywhere in the
house. If I stood up and removed this
chair cushion I’d probably find a few of
her misplaced pens. She spends on her
Advisors certainly see these characteristics in their clients, too. They may
bite their tongues to not offend the client with a judgmental reaction. They’ll
see a client’s hard work or good fortune
vanish as the client wastes their money,
spends to fit in, or spends on something
that won’t last. It must be hard to watch,
knowing what they know.
But people change. They usually do,
Different behaviors can manifest in
a family unit, illustrating the variant
behaviors an advisor can have overall
with his or her clientele. Although an
advisor can provide direction, clients
may or may not take it depending on
their needs — or wants — at that stage
in their life.
That’s the key: Understanding client
needs at different life stages. At one point
I was a spendthrift, but that changed
when one, two — four kids came into my
life. Advisors who understand this can
help clients better prepare as they move
through these life cycles.
Cam Marston studies demographics
and generational trends. Follow him on
Twitter at @GenInsights, email him at
firstname.lastname@example.org and listen to
his radio show on workforce and workplace
trends at soundcloud.com/user-991186341.
THE NEW SCHOOL
By Cam Marston
In the Mood
Ideas about saving can change throughout a client’s life, and a smart
advisor will be prepared for all phases