Customer wallet:
life event trajecto

It’s the nature and timing of our life events that determines the shape and journey of our wallets — not our demographics

During the course of our lives, our wallets travel through four distinct phases: pre-accumulation, accumulation, preservation and de-accumulation. Yet while these phases are common across generations and countries, the way in which individual consumers move through them is not.

In understanding the shape and size of our wallets, and the trajectory that this will take, we need to look at more than basic demographics or socioeconomic groups. We need to consider the life events that punctuate each phase, where in our lives these are timed, and the potential pressures these create or alleviate on our wallets.

For instance, two consumers with the same demographic profiles will follow two very different trajectories if one begins their financial life with a large student loan to pay down, where the second didn’t pursue higher education. If one shuns home

ownership in favor of living with parents for longer and then renting, whereas the second reaches for the property ladder as soon as they enter employment. If one pursues marriage and children in their mid-20s, whereas another puts the decision off until their late 30s in favor of traveling and building life experiences.

These factors don’t just affect the size of the wallet, i.e. income less consumption and spending, but also where it is likely to be under more or less strain, and therefore what needs might be most prioritized by consumers at a given time. In concert with the Five Mys framework, charting the path of consumers’ wallets and taking into account the timing and nature of their key life events can help us to plan and predict at an individual level, rather than an imprecise homogeneous group.