The traditional sequence of “first comes love, then comes marriage, then comes a baby in a baby carriage” is undergoing a transformation in the 21st century, challenging the conventional American dream of a nuclear family with a white picket fence. Younger generations are deviating from this path, either by choice or due to financial constraints.
Contemporary data suggests that the average American is opting for a different life framework. Instead of the classic sequence of getting married, buying a house, and then having children, many are now choosing to have children before getting married, followed by homeownership.
Rachel Gottlieb, the managing director of Gottlieb Rose Wealth Management, part of UBS’s financial service portfolio with $1.6 billion in assets under management, observes a shift in the order of milestones among her clients. This change is attributed to individuals accumulating wealth later in life. However, she cautions that navigating this unconventional path comes with its own financial challenges.
Wealth experts, including Gottlieb, emphasize the importance of acknowledging and adapting to the current economic landscape. Attempting to follow outdated models established by previous generations could hinder the financial prospects of younger individuals. This shift not only necessitates a change in mindset for younger generations but also calls for adjustments within family and financial institutions to align with the evolving reality.
You're the new example
Younger generations, including Gen X, millennials, and Gen Z, often face societal judgment for deviating from the conventional sequence of life events, according to Abby Davisson, co-author of Money and Love and founder of the Money and Love Institute.
While data suggests a changing trend with many individuals choosing to have children first (average age of first-time mothers at 27, first-time fathers at 30), followed by marriage (28 for women, 30 for men), and then homeownership (average age of first-time buyers at 36), a closer examination reveals a more intricate narrative. The U.S. has seen a rising number of people opting against marriage, with 46.4% of adults being single, totaling 117.6 million individuals, according to the Census Bureau.
Comparing 1960 to 2023, the decline in the percentage of married individuals is evident, dropping from just under 70% to just over 50% for men and from 65% to exactly 50% for women. Davisson notes that societal norms often impose a construct that individuals feel compelled to follow, but it’s crucial to recognize that such expectations may not suit everyone.
The judgment faced by those doing things “out of order” is a common negative consequence, says Davisson. However, she encourages individuals to make peace with this judgment, emphasizing that forging a different path can set an example for others in the future, instilling confidence in their own choices.
Attitudes toward having children are also evolving, as indicated by a 2021 Pew Research study. Among non-parents aged 18 to 49, 44% expressed unlikelihood of ever having children, marking a 7% increase from 2018. Reasons cited for choosing to remain childless include a lack of interest (majority) and financial considerations (17%).
Flexibility is key
According to experts interviewed by Fortune, there is consensus that there is no fixed “right” order for planning major financial and life milestones.
Abby Davisson emphasized the importance of goals but highlighted the necessity for flexibility in the current economic climate. With fluctuating interest rates and external circumstances evolving, she noted that goals set in stone may become unattainable unexpectedly. Therefore, maintaining flexibility is crucial for adapting to changing conditions.
Flexibility extends to interpersonal dynamics, particularly in conversations between partners. Establishing open lines of communication is identified as a significant factor. Davisson advised couples to approach discussions with the aim of finding the best solution rather than seeking victory or compromise. Emphasizing the importance of mutual agreement, she noted that the goal should be a solution that feels satisfactory to both individuals involved.
Realistic
Doug Wells, a partner at Albion Financial Group in Salt Lake City, suggests that some individuals may need to let go of the traditional dream of their adult life, particularly the image of a new bride being carried over the threshold of their first home.
Based on his experience advising individuals with over $1 million in investable assets, Wells noted a strong desire to purchase a house but highlighted the increasing difficulty in doing so, particularly in terms of the down payment and loan servicing challenges. The average down payment in the U.S. surpassed $31,000 in 2023, more than three times the $10,000 required a decade ago.
With the Federal Reserve raising base rates to the highest level in 22 years, the burden of keeping up with mortgage payments has intensified. However, Wells revealed a “secret” to home ownership—calculating how long one plans to stay in the property. He suggests that purchasing a home is a worthwhile investment if individuals plan to stay for at least seven to preferably 10 years.
Wells advises taking prompt action in buying a house, emphasizing the uncertainty of future market conditions. Whether prices go up or down, being already invested in the property provides advantages, making it easier to upgrade if prices decrease.
Get educated
Recent statistics from the Census Bureau indicate that approximately 46% of marriages end in divorce, underscoring the importance of addressing financial matters in the context of a challenging economic environment.
Rachel Gottlieb of UBS emphasizes the significance of understanding one’s finances, especially in the absence of the same assurances provided by having children with a partner as compared to pre-marital agreements. She suggests considering a prenuptial agreement, particularly for those with established wealth, as it can protect pre-marital assets in the event of complications, irrespective of whether there are children involved.
Gottlieb points out the complexity of decision-making order, noting the importance of being aware of various considerations before making decisions, even though there is no universally right or wrong path.
Abby Davisson warns that support from financial services may not be fully aligned with modern dilemmas. She highlights that, historically, although women technically could own bank accounts and credit accounts in the 1960s, it took nearly 15 years for it to become common practice after legal mandates. Davisson notes that institutions and policies often operate based on outdated information, and those that adapt quickly are considered enlightened.
She states, “Our financial institutions are often among the most archaic and take time to catch up with the evolving realities of society.”
