Dr Jay Zigmont, PhD, CFP® in the Press
Zigmont, who is married and childfree, specializes in financial planning for what he describes as “childfree families,” people who don’t have kids and don’t plan to have them in the future. (The preferred term isn’t childless, it’s “childfree” with no hyphen, Zigmont says, because a hyphen would imply the person was missing something. He says he uses the word “family” intentionally because having a family doesn’t necessarily mean having children.)
Being childfree means using a different financial planning framework than parents do, say those in the childfree community. Many traditional money goals simply aren’t part of the plan, like accumulating wealth to pass on to heirs, figuring out a way to pay for college, or saving for a bigger house. If you’re in a double-income-no-kids situation, there’s less of a need for life insurance if no one is counting on your income, and there’s less of a need to stay in a job you hate just for the money.
Jay Zigmont, a financial planner in Water Valley, Miss., who specializes in child-free clients, said life insurance usually isn’t a given for those without kids. Far more important is disability insurance, he said, as many of his clients are unmarried and lack a second income to fall back on.
Demand for such financial planning is likely to grow. The U.S. birthrate in 2020 was the lowest in four decades, and a Pew Research Center survey last year found some 44% of non-parents ages 18 to 49 years old say it is unlikely they will have children, up from 37% in 2018. The shift is cultural as well as demographic: The r/child-free group on Reddit has about 1.4 million members, with financial-planning questions among the recurring topics.
“Most financial planning is built around having a family, which means the childfree community is vastly underserved,” says financial planner Jay Zigmont, Ph.D., CFP, who specializes in childfree wealth management.
Here are four major financial planning differences that childfree individuals and couples should consider.
“First and foremost, it is important to talk to your parents before cognitive decline [sets in], as not only might information be lost, but there also may be legal issues in accessing accounts and making decisions for them,” says Jay Zigmont, PhD, CFP, and founder of Live, Learn, Plan, a registered investment advisor, based in Mississippi. “Once a parent is in crisis, such as with a stroke, you may be required to go to court to get access to their accounts without a durable power of attorney in place. It is difficult talking to parents about finances, but at a minimum, you need to know what their living will is (or medical directives), who is the designated healthcare proxy (makes decisions for them), and who has a durable power of attorney to make decisions for them if they are incapacitated.”
“Ten percent of people in the U.S. have chosen not to have children,” Dr. Jay Zigmont, PhD, CFP, told Advisors Magazine in a recent interview, “and while I will provide services for everybody, my specialty is with this childfree population.” Childfree means that they have chosen to not have kids and do not plan on ever having kids.
In short, he sees the childfree demographic as being more financially flexible. “For example, where they live and the school system is not as important. They are freer and can pick up and go almost anywhere,” Dr. Jay explained. “Life cycle changes are different for them and they embrace change more readily,” he added. “So, it becomes a different financial approach. It’s not necessarily all about retirement, but more about allowing them to be able to do what they want with their money and achieve their goals.”
Dr. Jay is an advice-only and fee-only fiduciary. There is no minimum investment required and he offers advice and financial coaching on a monthly retainer basis. A typical monthly retainer is $500, which includes a Zoom meeting each month, the building of a comprehensive financial plan over time that involves an additional hour of preparation and background work on the plan, and access to RightCapital software for the planning. Additional work and sessions can be added at an hourly rate.
“Before you say ‘Screw this, I’m out!’,” Jay Zigmont, Ph.D., CFP, tells Insider, “you should have some kind of landing pad or direction.” Zigmont, who also works as a career coach, explains that many people romanticize the idea of quitting their jobs without thinking about what they’ll actually do with that time.
Once you have some idea of what you want to do after leaving your job, you’ll have a better understanding of how much you need to save in order to sustain that new lifestyle. Here are five tips for making a six-month financial exit plan from a job that you hate.
While some advisors dread such heart-to-heart conversations, others embrace them. Clients who confide in their advisor — and feel better afterward — tend to remain loyal through thick and thin.
“You have to have a relationship where the client trusts you enough to discuss their feelings,” said Jay Zigmont, a certified financial planner in Water Valley, Miss. “You have to have that safe environment and make them comfortable discussing where their feelings are coming from.”
To build trust, acknowledge a client’s emotions and mental health. Resist judgment (“You shouldn’t feel that way”) in favor of reflecting on the situation (“I can tell this is hard for you”) and letting people open up.
“You can’t rush to propose a solution,” Zigmont said. “First, understand what’s holding them back on the emotional side.”
Putting off a major purchase may be the right option now, especially on a new car, says Jay Zigmont, a certified financial planner (CFP) and founder of Mississippi-based financial firm Live, Learn, Plan. “If your car works and gets you to work, then stick with it,” he says.
That’s because while auto loan rates are low, the cost of new cars has surged 11.1% over the past year, according to the consumer price index. But inflation on used cars is even worse—up 31.4% over the past year. Zigmont says in general, car prices have gotten a “bit disconnected from reality,” and consumers need to ask themselves if they really need a new car right now.
“Try paying for a complete detailing of your car and it will feel new to you without the sticker shock,” he says.
Make a Budget
Jay Zigmont, PhD, a registered investment advisor and founder of Live, Learn, Plan, urges people to determine their goal, whether that is the goal of early retirement or to have more options, and then get on a budget. “You need to have a plan for all of your money. You may have to make sacrifices now to get to your goal in the future. Work on a budget that reflects what you must, should, could and won’t spend money on.”
Save for a Rainy Day
It’s a classic money cliché, but Dr. Jay Zigmont, an investment advisor based in Mississippi, said this one holds true.
“If last year taught us nothing (else), it was the importance of being prepared for anything,” said Zigmont, founder of Live, Learn, Plan. “Grandma always talked about saving for a rainy day, and that was because she had been through the Depression and other really rainy days.”
He said we’ve gotten into the habit of living for today, forgetting that tomorrow is going to happen.
“We should all follow Grandma’s advice and keep aside 10% for safety and security,” he said. “A rainy day fund.”
3. Take time to learn
Even if it seems tempting to rush and get started, financial planner Jay Zigmont recommends only investing in things you understand.
“Take the time to learn about investing before you start,” says Zigmont. “You can work with a CFP® professional to learn about investing or learn on your own. Either way, you need to understand what you are investing in before you buy.”
2. They set clear goals for the future
Financial planner Jay Zigmont said that his clients who were successful in 2021 set actionable goals for the year.
“Wanting to build wealth is not enough,” said Zigmont. “The bigger question is, what would you do with that wealth? What do you want for yourself and your family? What are those big goals you have always wanted?”
Asking yourself these things and making measurable goals from them will help you get there, said Zigmont.
“If you don’t have the money now, you need to choose between cutting back on your budget and pushing off the wedding until you save more,” says Jay Zigmont, PhD, CFP, and founder of financial planning firm Live Learn Plan. “Yes, you will get some money from gifts, but that isn’t an excuse for going into debt for the wedding.”
The key to achieving homeownership today is to have a bull’s-eye focus on what’s within your financial reach—and vow to not spend a penny more.
“Head into a house hunt with your numbers in hand. Know your top number,” says Jay Zigmont, certified financial planner and founder of Live, Learn, Plan. “If you can afford a $250,000 house, don’t look at $300,000 houses. You will by nature like the $300,000 houses better and start rationalizing spending more.”
“If you are buying things from social media on credit cards or with other debt, your social media spending has gotten out of hand,” said Jay Zigmont, CFP, founder of Live, Learn, Plan, a financial planning firm based in Mississippi. “The core test is, are you buying things you need or things you want? Social media tends to encourage people to buy things they want or feel they ‘deserve.’”
You can get a CFP who will just give you advice, but doesn’t take over managing the investments for you, or you can get one who does both, explains Jay Zigmont, certified financial planner and founder of financial planning firm Live, Learn, Plan. For the advice-only CFP, you might pay them hourly or on a retainer basis, and they’d provide both a second set of eyes as well as comprehensive financial planning to ensure your investment allocation and retirement strategies were on track, says Zigmont. “The other option would be investment management, with an assets under management (AUM) fee such as 1%,” says Zigmont.
A delayed project could be an opportunity to build your remodeling savings. Paying in cash for discretionary and non-urgent purchases is a better alternative than going into debt for them, says Jay Zigmont, a Mississippi-based certified financial planner. It’s also an interest-free financing option.
If you choose to finance, look for the least expensive borrowing option, Zigmont says.
Zigmont recommends piecemealing the upgrade if you want to see progress this year but don’t have enough cash to pay for a full renovation. Start with what you’re most excited about — new appliances or tiling, for example — and consider saving up for the rest.
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