The financial challenges facing younger couples are quite different than those of yesteryear. Let’s take a look at John and Becky Stewart. John and Becky are in their late twenties and have been married for five years. John is a sales representative for a computer software company and Becky works in the mortgage department of a local bank. During the early years of their marriage, they enjoyed a lifestyle supported by two incomes. Without children, they were able to be somewhat carefree about their spending.

Now, however, they are contemplating having children and are raising questions about the financial implications of enlarging their family. Although their jobs seem relatively secure, they have friends who work for downsized companies and who are less certain of their financial future. Moreover, some of their friends have lost their jobs and are going through difficult transitions.

Discussions with family and friends have led them to the conclusion that uncertainty may be the defining characteristic of their generation. Emerging families like John and Becky Stewart are facing a new reality, one with much more uncertainty about the future than that faced by previous generations. Some of this uncertainty is tied to rapid technological changes and some is the result of the realization that they personally may be responsible for providing for themselves much of what was previously provided by others (e.g., pensions by employers; social programs by government).

Here are some of the issues that now concern them as they look to the future:

  • Will corporate downsizing eventually catch up to them? Even if Becky intends to return to work full-time after having a baby, how would they cope if one of them should lose their job?
  • What about the world of work in general? Will they go through several career transitions over the course of their working lives due to an economy that might be changing constantly? Is there a way to protect themselves financially?
  • With their college days not too far behind them, they know that their parents made sacrifices to send them to good schools. How difficult will it be for them to save for a child’s education? What about saving for more than one child?
  • They both participate in 401(k) plans at work, but will they be able to save enough for a comfortable retirement? What about Social Security? Will the system change significantly?
  • Will they be protected should they become sick or disabled?

By discussing the various alternative solutions to the difficult questions above, John and Becky will be able to arrive at a realistic assessment of what they should and should not do financially, what they can and cannot afford, and what sacrifices they might need to make to assure financial security for both today and tomorrow. They know that their spending choices will have to be made carefully, and that preparing for a bright financial future will require setting goals now.

As Becky and John look to expand their family, they can be optimistic about their future because their financial planning today will make them less likely to be caught off guard by sudden economic or personal events tomorrow.

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