A recent study has found that half of Americans take an informal approach to financial planning and the majority (59%) feel that their planning needs improvement.
The findings, though vague and conflicting, showcase the schizophrenic nature of the country’s psyche as the financial crisis begins to subside: people are aware that they need to save but take an informal approach to doing so while openly acknowledging that their planning needs improvement.
When respondents were asked what type of planner they were, 38% described themselves as “informal,” meaning they have a general idea of their goals and how to attain them but do not have a particular plan in place. An additional seven percent said that they have no goals or plan.
The study was able to conclude that many Americans are cognizant of their finances as a whole and the need to plan and invest but are confused about what type of strategy to pursue.
One–fifth of respondents would like to take a more cautious approach to their finances but they feel like they are too behind and pursue inherently risky plans in order to catch up. Again, the residue of the great recession has left Americans internally battling conflicting financial strategies.
The number one approach Americans take when saving is “slow and steady wins the race.” Thirty-six percent utilize this strategy.
“This research shows that most Americans see the value in setting financial goals, but a large number don’t know how they’ll get there. Developing a plan to reach your goals is just as important as having a goal in place in the first place, whether it pertains to your health, your career or your financial security,” said Greg Oberland, Northwestern Mutual executive vice president.