Many of your baby boomer clients are on track for financial independence, but the generation behind them often has problems.

That’s the concern of advisor Beth Blecker. She says most of her clients are saving and investing enough, but she worries about the next generation.

“The children of my clients are often the ones with the biggest issues,” says Blecker, a registered financial analyst in Nanuet, N.Y.

The issues of under-saving and excessive debt are widespread, as recently documented by a new Schwab study. It shows 59% of Americans live paycheck to paycheck, 44% have revolving card debts and “struggle to keep up with bills/payments.”

The study also showed that “only 38% have built up an emergency fund to protect themselves from hard times,” according to Schwab. It noted that people saving for retirement are much more likely to reach their goals if they have an advisor. And lots of them need help, according to the nation’s central bank.

A 2018 Federal Reserve report on the economic well-being of households found that 40% of adults, "if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money." Americans often draw upon their retirement savings to deal with unexpected costs, the study found.

How does the advisor change these troubling trends?

“The number one thing is to get these young people to pay themselves first, to automatically put money aside for savings and retirement,” Blecker says.

How?

Blecker says advisors should use something that dazzles tens of millions of Americans, especially young people: technology.

“Young people use apps today for everything. But they often lose track of how much they are spending and that causes problems. They don’t realize how much debt they have run up,” Blecker says. She says young people trying to build up wealth can and should use apps that track monthly spending.

“You open up the app and you see the numbers in the red and you automatically know you are overspending for the month,” she notes. “You see them in the green and you see what you have left for the month.”

She adds that technology should be used so young people can employ the pay-yourself-first strategy employed by many generations.

“You set it up so that money is taken out of their paychecks automatically each pay period,” she says.

How much?

Another advisor says you should start out with a big number, if you can, but the top priority is getting young people started on a savings habit as soon as possible.

Judith Ward, a CFP with T. Rowe Price, thinks saving 15% is a healthy goal. But she adds “it’s OK if you can’t save the full amount today. Simply getting started and then steadily increasing your contributions can help get your savings strategy on track.”

Achieving adequate savings outside of qualified plans is also critical, advisors say. Otherwise many young people will be tempted to break into their qualified plans whenever there is some problem. And that could hurt any saving plan because of unexpected taxes and penalties.

“The problem is ultimately that investment education isn’t being taught in schools; young people need help as soon as possible,” says Ryan Brinks, assistant publisher of Finder.com, a financial advisory website.

It’s critical, he says, that young people are taught to have saving and payment systems in place that will automatically help them save.

“Without them, without a pay-yourself system that automatically puts money aside,” Brinks adds, “the average young person will be overwhelmed by messages to buy now and won’t be able to save.”

However, the problem of under-saving for retirement is more widespread, according to a new survey of workplace professionals.

And these woes are not only a young person’s problem. The increasing use of freelancers has meant millions of American workers have irregular incomes, making it more challenging to save and invest regularly, advisors say.

The Organisation for Economic Co-operation and Development (OECD) reports that Americans generally save just 6.88% of their disposable income, more than those in Canada or Australia, but less than those in countries like Germany, Switzerland, South Korea and Ireland.

“The research shows there is definitely room for improvement,” says Jon Brodsky, CEO (USA) of Finder. “Americans have the highest average disposable income of all the nationalities included in the study, yet we save less than 7% of it.” He noted that some countries are saving almost 20% of their disposable income.

A recent survey by Express Employment Professionals of white collar, blue collar and grey collar workers (the last falling somewhere between blue and white collar) found many are not on track for retirement planning goals.

“The majority of the workforces are worried about saving enough for retirement,” according to the survey, which explained why people save too little. “Almost one in three are drowning in debt.”

The survey also found that 62% of blue collar workers are still paying off student loans, as are 45% of grey collar and 40% of white collar workers.

So perhaps advisors need to aim for a higher retirement savings figure than 10%, a number often suggested as a good beginning amount. It is possible, Ward says, to do 50% better than that over the long term.

Ward says it is possible to reach the 15% savings goal by working in steps. Moving toward that goal, she adds, can happen in the workplace. She adds that many offer a service that will automatically increase retirement plan contributions by one percentage point each year.

She says the message that advisors should stress is taking the first step.

“One of the most important things you can do is to start saving when you can right now,” Ward says. “Once you get started, you can work toward savings when you’ll need to fully fund your retirement.”

Brodsky agrees. He says this is the same message that advisors should send to clients or anyone needing help.

“Ideally, he argues, “save some of your income before it ever hits your normal bank account by routing part of it to a 401(k) or savings account. That way, you’re not tempted to spend the money and you’ll start saving without realizing it.”