Even though 90% of Americans have some type of personal finance planning, very few have a truly clear, well-rounded approach to reaching their financial goals. The 2013 Household Financial Planning Survey and Index was just released last month by the Certified Financial Planner Board of Standards and in it they categorized consumers into 4 different types of financial planners.
Those four include “comprehensive planners”, “basic planners”, “limited planners” and “non-planners”. All four groups have certain habits when it comes to their finances and, if you’re keen on finding out which one of these 4 “Money Mindsets” that you have, take a look below and find out. Enjoy.
- Comprehensive Planners. This group is what you might call the “perfectionists” and includes approximately 19% of all American adults. This is the group of consumers that know exactly what’s going on with their finances and have either put a financial plan together on their own or sought professional financial help to do it. They have a household budget that includes putting away money for retirement, insurance and savings, and they also work towards specific financial goals.
- Two thirds of comprehensive planners have worked with a professional financial planner.
- Almost 90% have a very specific plan for retirement
- Just over 80% have an emergency savings account
- Over 50% have a household income that’s over $100,000
- Basic Planners. At 38%, the majority of Americans fall into this Money Mindset category. Most of them have worked out a number of financial goals and have an idea of what they’d like to achieve with their money. The problem; most of them simply haven’t worked out any of the details. They don’t have specific plans for paying for college education or for retirement and they haven’t put anything together into any sort of financial plan.
- Over 66% of Basic Planners have a household budget that they use
- Less than 50% actually write down their budget or use an electronic device to keep track of it
- Approximately 35% have what could be considered a comprehensive plan
- Just over 30% will put that plan into action within the next 12 months
- Limited Planners. 33% of Americans do the absolute bare minimum as far as finances are concerned and plan on doing the rest “later”. Many of the adults in this group have either a budget or a plan for their savings, but few have both. Like the next group, the Non-Planners, their comprehensive financial behaviors are nearly nonexistent. Limited Planners however at least keep a written budget and, when it comes to credit card debt, they tend to avoid piling up a ton of it.
- While 31% of Limited Planners do plan for retirement, only 7% have emergency savings
- Only 7% have savings of any kind
- Just over 10% will probably make a comprehensive plan in the next 12 months
- While 44% do have a household budget, only 15% of them actually write it down
- Non-Planners. 10% of Americans basically go we to week or month to month as far as bill paying is concerned and have practically no strategy or plan for their money. In most cases they have absolutely no financial planning habits and less than 1% of them are likely to create one in the next year.
- 90% of Non-Planners do not have a specific goal for savings
- Approximately 40% of Non-Planners have a significant amount of credit card debt
- Over 50% have no plan in place to pay down their debt
As you might expect, comprehensive planners have much more confidence when making financial decisions and also have a lot more money in savings. This confidence comes from understanding their financial situation and, with an absolute wealth of financial planning tools available online these days, there’s really no excuse for anyone to not at least understand their finances on a basic level. From setting a basic budget to managing their student loan debt, practically anyone can set up a basic set of financial goals.
If you’re keen on using one of the better online tools to check your credit health and get a “picture” of your finances, credit.com has a free Credit Report Card that can help you. You might also contact a professional financial consultant and, at the very least, sit down with them and listen to their device.
Speaking of advice, if you have questions about your finances, savings or retirement goals, please let us know and will get back to you with advice, information and answers as soon as we can.