Child Free: Financially Uninvolved or Financially Underserved? MacroMonitor Marketing Report Vol. IV, No. 8 November 2000

Increased life expectancy is responsible for many changes to the financial services landscape–including the decline in age-by-income segmentations and the growing effectiveness of life stages. Several life events dominate the life-stage segments: employment status, number of household heads, household formation, and the presence of children. Households tend to pass through the various life stages along a fairly predictable path, barring any trauma. Our ongoing analysis of the life-stage segmentation revealed a gap: households past the formative stages, not yet in the thick of retirement planning, that do not have, have not had, and do not plan to have children. They are Child Free.

Life-Stage Segmentation Map

Because Child-Free households do not have responsibility for children, their goals and motivations differ significantly from those of other households. The impact of this difference on each of the five basic financial need areas is significant. Although they still take advantage of and use many of the same financial products and services that households with children use, the degree of their use and their reasons are not the same. Because they have fewer people, Child-Free households have fewer financial transactions and less debt and insurance. But instead of saving or investing more, Child-Free households tend to spend more. Financial institutions seeking to serve the roughly 7.5 million Child-Free households need to take into account the differences that this report describes when designing new products, services, and marketing materials.