10 ID Trends NAILBA

After a year of inflation rates higher than any since the 1980s , continued supply chain upheaval and the global economic impacts of the war in Ukraine , it ’ s no surprise that many Americans are worried about a potential recession . Experts remain sharply divided on the likelihood of an economic downturn and its severity . But for many financial advisors , now may be a good time to dust off the recession playbook with clients .

A near universal recommendation for middle-class households is to cut back on non-essential spending during recessions . However , a recent MDRT survey on the impacts of inflation and a possible recession found such broad advice is likely not useful for many consumers . Many Americans are unwilling to give up common non-essential goods , like caffeinated beverages , or already do not purchase them . As the nation prepares for a bumpy economic road ahead , financial advisors must individualize conversations about household spending and truly learn what clients see as essential or not .

Caffeine for me , but not for thee ?

Though coffee and other caffeinated drinks are common targets of personal finance experts , the survey results reveal their advice is likely unhelpful to about half of Americans . Overall , the results remind advisors to challenge age-based stereotypes and take genuine stock of their clients ’ financial habits .

Don ’ t Spend

Willingness to cut back on caffeinated drinks by generation

Unsure 2 ^% Unsure Unsure Don ’ t

Don ’ t Unsure

Spend Spend

Don ’ t

7 ^% 8 ^% 5 ^%

Spend 9 ^% 6 ^% 10 ^% 10 ^%

38 ^%

27 ^%

54 ^%

Baby Boomers Generation X Millennials Generation Z

MDRT Survey continued on page 12