To all of us that have children (or stepchildren in my case), the idea of two incomes and no kids conjures images of couples swimming in cash, with perpetual smiles on their faces (faces free from worry lines I might add).
Nevertheless, I’m sure my DINK readers will quickly assure us that financial security is just as important to them as to anyone else. They just have different financial needs.
With absolutely no data to support my claim other than personal experience as an adviser, I would hazard a guess that DINKs are the group most likely to seek advice from financial planners because they are often very career oriented and accustomed to delegating resources. This means that they tend to be very comfortable seeking and pay for specialist advice.
At end of the day, the basic fundamentals of long-term financial planning are the same for DINKs as any other group – time-frame, diversification, quality management etc, however there may be a different emphasis on the types of strategies and financial products.
In particular, because we are generally talking about relatively high incomes, personal risk protection (insurances) can form an important part of the strategy.
Overall, the choice of investment products and strategies depends totally upon the individual not a demographic – one size fits all products just don’t exist when it comes to investment planning. What you may find is that often the level of income can mean that DINKs are happy to direct a larger portion of their savings to longer-term strategies. They also may include more aggressive investment choices.
DINKs may not have some of the shorter-term financial expenses that families might have, such as education, endless doctor appointments, clothing that only fit for a few months…, however they often work longer hours, and therefore look for fully serviced products, more expensive holidays than other groups – in other words, different short term goals.
The idea that DINK couples have a higher disposable income is largely a fallacy because people with higher incomes tend to also have higher debt levels, and/or higher spending patterns (but that is not to say that many couldn’t or shouldn’t save more.) This may change later in life once the mortgage is paid off, however they may also have fundamentally more expensive lifestyles that include travel, eating out more often etc.
It’s probably more accurate to say that if you’re a DINK couple, you often have a greater savings potential because you usually have a consistent dual income and don’t have the time away from the workforce or expenses that come with raising children. Therefore DINKs can really benefit from working with a financial planner for assistance and advice on budgeting and long-term planning to maximise their savings capacity.
Often DINK couples can actually have quite a significant focus on saving rather than spending. Because they are often career-oriented, they can also be very goal oriented, and happy to make sacrifices to achieve longer-term ambitions.
And of course with aged care accommodation becoming an expensive issue, this can be critical for couples that decide not to have children – they often need to plan and finance this phase of their lives entirely on their own behalf. Perhaps a good reason to be kind to the nieces and nephews!
Overall, stereotyping any particular group is risky. Financial planning is based on the needs and objectives of individuals rather than specific demographics. I’d love to hear from any DINK readers who may disagree with my points, or can shed some light on other financial issues that are especially important to them. Just add a comment below, or email me on askCaren@hendrie.com.au.