Go to the Head of the Class

Can you anticipate members’ varied financial needs?

October 15, 2012

I attended my class reunion last weekend and was surprised at how some things never change.

Old friends may have looked different after years had passed but the same old personalities soon emerged. The class clown still had an assortment of antics, the top students had gone on to achieve graduate degrees, and as favorite stories of youthful days circulated, we quickly reconnected and shared how life had treated us.

Despite some sameness, however, big differences existing among us also soon became apparent.

I was intrigued to realize this large group of same-age people had vastly different financial needs. I had, in error, assumed we would be a more homogenous group with similar fiscal requirements.

But some of the class had gone on to start and grow small businesses. Some had married while others were divorced or had remained single. Some had children going off to college and others had babies on the way.

Many had recently lost a parent, and perhaps had special investment needs as a result. Some lived in cities with high living costs, while others had remained in the cost-efficient small town of our childhood, living in the house they grew up in.

Do you assume that a same age cohort will expect similar financial products and services? Do you target market by age—and perhaps inadvertently miss opportunities to alert members to products they might find helpful, even though they are outside the mainstream user group?

As you peruse this week’s findings, think about those in your membership that might benefit from products or services you strategically position to meet their unique needs.

Encourage tomorrow’s leaders

Don’t Fail Tomorrow’s Entrepreneurs,” says Gallup. This article states that our economy is short on start-up companies, an important part of our economy, and asks us to consider how we might encourage today’s youth to become the entrepreneurs of tomorrow.

“A Gallup study showed that 77% of students in grades five through 12 said that they want to be their own boss, and 45% plan to start their own business. When we asked the same group if they believed they would “invent something that changes the world,” 42% said “yes.”

What can you do to help?

How many of my classmates have student loans to pay? “A Record One-in-Five Households Now Owe Student Loan Debt,” according to Pew Research.  A few interesting facts:

Can students repay their debts? See “First Official Three-Year Student Loan Default Rates Published,” by the U.S. Department of Education. Here you’ll learn “For-profit institutions had the highest average three-year default rates at 22.7%, with public institutions following at 11% and private nonprofit institutions at 7.5%.”

What about financial aid for students? The National Center for Education Statistics reports in a recent study, “Differences in average price of attendance before aid and net price of attendance for the 2010-11 academic year varied by institutional sector…For public four-year institutions, average price before aid was approximately $17,600 and net price was about $11,000; for nonprofit four-year institutions, average price before aid was roughly $34,000 and net price was about $19,800; and for…for-profit four-year institutions, average price before aid was approximately $27,900 and net price was about $22,500.”

Hopefully my classmates selected their majors wisely, as “Choice of College Major Can Mean Millions Over Career, Census Bureau Reports.” Sources here reveal which areas of study are most lucrative. Advanced degrees, too, make an impact on future earnings. A tip? “…Education pays off in a big way, with estimated work-life earnings ranging from $936,000 for those with less than a high school education to $4.2 million for people with professional degrees.”

The world of work

More insight on the world of work is found in Deloitte’s report, “Talent 2020: Surveying the Talent Paradox from the Employee Perspective.”

Despite high unemployment rates, “employers still face challenges filling technical and skilled jobs.” Survey results of employees show “80% indicated they plan to stay with their current employers in the next year…yet at the same time, nearly one-third (31%) of surveyed employees reported they are not satisfied with their jobs.”

This interesting report examines challenges for employers: “They need to adjust their talent management initiatives to focus on retaining employees with critical skills who are at high risk of departure and the capable leaders who can advance their companies despite continuing economic turbulence.”

Might “Job Openings and Labor Turnover Summary” by the Bureau of Labor Statistics provide additional clues about on-the-job satisfaction? Reportedly, “The number of job openings in August was 3.6 million…The hires rate (3.3%) and separations rate (3.3%) were little changed in August.”

This statistical review will get you up to speed on turnover rates by industry.

Which areas of employment might be most satisfying? Where do your members work?

My classmates and I are getting older, and “As the Population Ages, Social Security’s Spending is Projected to Outpace its Tax Revenues,” says the Congressional Budget Office.

“In fiscal year 2012, spending for Social Security totaled $773 billion, equal to about 5% of gross domestic product and one-fifth of federal spending.” Further, “Over the next 10 years, outlays will exceed dedicated tax revenues by about 10%.”

These gaps will grow over time such that “resources available to the Social Security Program will become insufficient to pay full benefits in about 20 years.”

Our class reunion concluded with well-wishes and promises to reconvene in another five years. I bet many of my old friends will tell the same old stories then.

But I further wager we’ll have some interesting new stories, too.

Will you be able to anticipate our varied financial needs over the next five years? Who will you ask?

Go to the head of the class!

LORA BRAY is a research librarian in CUNA’s business-to-business publishing department.