Very few clients that we see have financial issues, goals or constraints that apply only to themselves. Rather, their concerns apply to their broader, extended family which may include adult children, grandchildren, parents and others. Modern families give rise to modern family finance.
In times past, personal finance was more narrow and certainly more linear. That is no longer the case. A majority of our clients have substantive financial matters that directly involve others within their families. We have all seen, (or experienced), the statistics surrounding young adults moving back home with their parents for financial reasons (debt, divorce, job). This has changed the family dynamic and the surrounding life planning issues.
As we repeat often, our own behavior is the dominant determinant of long term financial success. Perhaps nothing can create more destruction in family financial life than divorce. While we have not witnessed (thankfully), a huge uptick in clients divorcing, the larger statistics point to very disturbing trends. 25% of divorces today involve people over the age of 50 and 10% are over age 65. The percentage of 65 year olds divorcing is up almost an order of magnitude since 1990. At age 65 and beyond, divorce is, of course, an emotional issue but it is also a huge financial issue. Someone divorcing at age 65 or 70 likely can’t repair the financial damage that divorce brings during their lifetime.
Modern financial life can be difficult with multiple generations tugging and pulling at always finite financial resources. It is helpful to remember that even with substantial income and assets, tradeoffs generally have to be made. That is, you can’t “solve” each and every family financial problem without creating new issues with your own long term goals. Modern financial life is…more than numbers. Ready for a real conversation?