The birth of a child is an exciting time, no doubt. Life changes so quickly. Values get reevaluated. New perspectives evolve. New priorities emerge. Yes, that one day when a child is born, much changes.
In our financial lives, the birth of the first child means you are now a "Charlie", as I call it. No longer a single individual or married couple, you are now a family.... and families have different financial needs than their non-parental counterparts. As we train bankers to develop deeper customer relationships, we include financial counseling tips that bankers can use to really make a difference in their customers' lives. For the "Charlies" and "Deltas", families with preschool aged children or school age children respectively, there are some important conversations we should be having.
Probably the most important is to review the topics they should already have mastered, learning the savings habit and taking care of their credit score. After revisiting that, we can move on to a few new topics, savings for the child or children's college education (or just savings for the child) and starting long-term savings for long-term goals or retirement. By now, this young family has some goals, whether short term goals or long term goals and they need to be planning to create that future....
We can help our customers by talking about the need for mortgage loans to buy that first home (or a bigger home as the family expands).
We can help our customers by asking if they have started participating in their employer's 401(k) plan. If not, that is the number 1 recommended savings vehicle, especially when the employer gives a matching contribution! You can't beat matching with any other investment out there. And if they are participating in their 401(k) plan, we can remind them that they can also deposit up to $6000 per year into their own IRA plan and build an additional retirement nest egg. When our employees are well-versed in the IRA rules and regs, they can talk to many customers and help them plan an annual contribution program ( of course, customers should consult with their tax advisor regarding deductibiity).
If we are helping our customers move through each life cycle stage with just a few of the basic financial planning tenets in place, we will know that we have not only made a difference in their lives, but that we have developed a loyal customer as well.
Next time, we'll look at how we can be helping our "empty nesters" and retired "foxtrots" also.
Are you including life cycle financial selling in your basic bank training? If not, we can help. If so, please let me know what you do. If you are passionate about financial education like I am, please email me at slovejoy@marketmatch.com.
Until next time,
Sharon
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