WASHINGTON (7/26/12)--The recent recession has left more Americans struggling to make ends meet, but those with a financial plan are more confident they can meet the challenges than they were 15 years ago, according to a new report released by the Consumer Federation of America (CFA) and Certified Financial Planner Board of Standards Inc.
According to several measures of financial well-being, those with a financial plan report feeling better about their situation than those without one:
- By a margin of 50% to 32% and for all but the lowest income bracket (under $25,000) where few have a comprehensive plan, those with a financial plan are more likely to say they are on pace to meet all of their financial goals, such as saving for retirement or for emergencies;
- By an even wider margin of 52% to 30% and across all income brackets, planners are more likely to feel "very confident" about managing money, savings and investments than nonplanners;
- By a margin of 48% to 22%, planners are more likely to describe themselves as living comfortably; in addition, as many planners in the $50,000-$99,999 income bracket say that they live comfortably as non-planners in the $100,000 and above bracket.
The percentage of American families who have made a comprehensive financial plan--either on their own or with professional help--has not changed significantly from 15 years ago. Overall, 31% of decision-makers today report have ever put together a plan. About 35% report having a plan to save for emergencies, down from 39% in 1997.
Like its predecessor, the new survey asked decision‐makers about their saving and investments in six specific categories. (See table.) Fewer people today report having saved toward one or more of their goals than did so 15 years ago (80% vs. 84%).
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Most American families have a financial plan in place to help accomplish their savings goals, but few have ever put together the kind of detailed financial plan that money management experts recommend, said the report. When asked if they were implementing a plan to meet savings goals in six specific areas, 65% say they follow a plan for at least one of their savings goals.
Against the backdrop of a fluctuating stock market, a larger share of non-retired respondents report that they are behind on saving for retirement than did so in 1997. Today, about half of non-retired respondents, compared with 38% in 1997, say they are behind or should have already stared saving for retirement.
For the full report, use the link.