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Rethinking Traditional Money Timelines

Nontraditional families and money timelines

Nontraditional Families Need Nontraditional Financial Support

American families have changed dramatically over the past several decades—and so have their finances.

While growing up in a nuclear family may have once been the norm, today’s children are far more likely to be raised in what researchers call “blended,” “fluid,” or “complex” family structures. As cited by the Pew Research Center, one estimate suggests that by the time American children turn 9, more than 20% of kids born to married parents and 50% of those born to cohabitating parents will have experienced their break up. Whereas 73% of children in 1960 were raised by parents in their first marriage, that number was down to 46% in 2014. This trend looks like it will continue as millennials appear to prioritize having children over being married. In 1960, only 9% of American children were being raised by a single parent, compared to 25% today.

Whether you are living in a household with a single parent, a divorced parent, same-sex parents, remarried parents, or parents who are cohabiting, your family is part of the “new normal.”

The problem is that not all parts of society have caught up to these changing demographics. This is nowhere more apparent than with household finances—in part, because we assume that nontraditional families are still somehow capable of following a “traditional money timeline.”

What is the “traditional money timeline”?

Stemming from the days when nuclear families were the norm, a household’s traditional familial and financial trajectory was assumed to look something like this:

  1. Earn an education (or not, if you were a woman in the ‘60s).
  2. Marry someone of the opposite sex and share health insurance and tax benefits.
  3. Launch a lifelong career (or support your husband in doing so).
  4. Begin saving for a house and putting money away for retirement.
  5. Purchase a home.
  6. Have children.
  7. Begin saving for your children’s educations and purchase life insurance.
  8. Retire as empty nesters on your hard-earned savings.

Financial checklists like these are written for households following this general timeline. They assume parents complete their educations before having children, post-college graduates maintain the same career (and, subsequently, retirement accounts) for decades, parents contribute equally to a child’s inheritance and college fund, and shared life and health insurance plans are available to all couples. While their advice is sound, it is simply not realistic.

Challenging the traditional money timeline

Here are just a few ways nontraditional or “complex” families struggle to fit within this structure.

Filling in the gaps

Many of the traditional financial guides and programs designed to relieve financial stress for families have failed to keep pace with the changes that U.S. households have undergone. That’s one reason why private financial organizations are developing innovative ways to fill in the gaps of a new money timeline that better reflects the demographic challenges. Increasingly, income insurance, innovative savings programs, and community partnerships, for example, are bridging the gap between our traditional expectations of how families manage their money and the financial realities they encounter.