I had a fascinating conversation recently with an 11-year-old boy.
He shared with me, in all seriousness, the things he absolutely hated.
“There are three things I really hate,” he said. “First, Alfie the Dog because he stinks. Second, this girl in my math class who thinks she is so great and knows everything. Last—asparagus. Yuck!”
How interesting the lad did not have world hunger, war, acid rain, or tsunamis anywhere near his list of least favorite things! Why not? These horrors hadn’t been part of his own experiences and, therefore, not in his frame of reference.
|Lora Bray is research librarian at CUNA.|
Contemplate your credit union’s frame of reference. Do you offer products and services based on your own experiences, without understanding of the competition’s activities or member needs?
Or without taking the time to adequately investigate larger impactful events—maybe political or social activities—that might affect your success? Are your “least favorite things” a list of concerns that, in the grand scheme of your mission, are not really that important after all?
Think about the possible limitations in your frame of reference as you examine what’s happening around you.
For those considering retirement, unrealistic frames of reference revolving around financial security and income sources could be problematic.
“The aggregate retirement income deficit number, taking into account current Social Security retirement benefits and the assumption that net housing equity is utilized ‘as needed,’ is currently estimated to be $4.3 trillion for all Baby Boomers and Gen Xers,” according to “Retirement Income Adequacy for Boomers and Gen Xers: Evidence from the 20120 EBRI Retirement Security Projection Model.”
Despite this need for retirement dollars, “Boomers May Stop Work Because They Can,” according to Boston College. “The wealth of non-working Americans between ages 55 and 61 increased from $83,000 in 1992 to $98,000 in 2008.”
Reportedly, this is because women’s increasing participation in the workforce has been advantageous for their husbands as the top wealth tier reflects increases in the numbers of nonworking married men. But this is unfortunate, according to the study, as $98,000 “isn’t a lot of money for a boomer with a long spell of retirement ahead of them.”
Perhaps this reality might help explain another Boston College finding, “Couples’ Rifts Increase With Age.”
Money is a hot topic for married couples as “U.S. married couples argue an average of three times per month about their joint finances. But once couples hit their mid-40s, these spats increase to four times per month.”
The article suggests that couples should set “money dates” to help alleviate the problem.
“How Important is Asset Allocation to Retirement Security?” Yet another Boston College report informs us that although we have traditionally relied upon asset allocation for retirement security, more effective alternatives
- Delayed retirement;
- Reverse mortgages; and
- Control of spending.
These are important considerations as “even perfect investing is unlikely to have a significant effect on…well-being in retirement.”
See “Individual Retirement Account Balances, Contribution, and Rollovers, 2010: The EBRI IRA Database” for more statistics on retirement savings. It reports “The average and median IRA account balance in 2010 was $67,438 and $17,863, respectively, while the average and median IRA individual balance (all accounts from the same person combined) was $91,864 and $25,296.”
Are your members fully aware of their own skewed frames of reference with retirement plans? And of the impact financial decisions make in many aspects of their existence, including their personal relationships?
A social shift may be in progress, according to a Claremont College theses, “The Disappearing Middle Class: Implications for Politics and Public Policy,” and this shift has something to do with financial choices made by Americans. “Is home ownership going to remain a hallmark of middle class life? Possibly, but it hinges on making changes to financial habits.”
New homes are currently 50% bigger today than a generation ago, and homes are frequently the asset owners utilize to increase debt. “It boils down to making financially conscious decisions. Don’t spend more than you have and you won’t be in debt…”
Economic inequality south of the border
An interesting juxtaposition to American middle class realities is found just South of the border. See “The Three Amigos: How Income Inequality in Mexico is Different that Canada and the U.S.” by the Canadian Centre for Policy Alternatives.
Here, “An examination of income inequality in North America reveals that Mexico is the only part of the continent where the middle class has been gaining from growth…Mexico’s middle class has benefited from urbanization, greater female employment, improved education and better social programs…
“Globalization, technological advances, a drop in unionized work, and a deregulated labour market have contributed to stagnant real incomes for most in Canada and the U.S. since the 1980s.”
What can we learn from others around the world about financial responsibility and the impact of politics and social trends on our fiscal circumstances?
Happily, my 11-year old friend also has several items on his “favorite things” list, including baseball games, recess, and pizza. He knows what he likes and tends to operate within his comfort zone as he avoids Odorous Alfie en route to the ballpark. And it’s easy enough to shun asparagus.
I hated asparagus as a kid, too, but now it is one of my favorite vegetables. It is interesting what a little experience can do to change one’s perspective.