Why Only 1 in 3 Americans Have a Financial Plan—and How You Can Start Today
It’s October, cooler weather is coming and the fall colors will soon be visible. Financial Planning Month is also being celebrated and would you be surprised by how many people don’t have a plan for their money? Only 1 in every 3 Americans have a written financial plan, but you can start yours today as financial planning isn’t just for the wealthy - it’s for everyone.
Most people don’t have a plan because they don’t know where to start, or think they will create one once they hit a million dollars or some other fictional amount far into the future. These beliefs can keep you stuck in procrastination mode because it’s just something that you will deal with later. But each of us should have a plan to utilize our largest wealth building tool - our income. If you don’t plan for how you will spend your income, just watch it as I expect it will make plans itself and perhaps not go towards what’s most important to you but instead goes towards what gets spent quickest.
Even a simple financial plan that you can use in the short term matters because it provides clarity to know when your money is coming in and where it’s going out. Having a plan for the future can reduce stress because it removes some of the daily decisions and in my opinion supports when you have to say “NO” because it provides some guidance or a money boundary. Does this sound familiar “We aren’t buying that cool new pair of shoes because we agreed as a family that we each only get one new brand of shoes when school starts, and you’ve already used up your allotment.” Every dollar in your budget should support the plan with intention, data can be comforting (good or bad) because it gives you something to work with.
I understand it’s confusing to know where to start, so I’ve outlined 3 simple steps to get you started:
Outline your income & expenses (even a simple list on a notebook is enough to begin with, use this one page budget printable, utilize a zero-base budgeting spreadsheet found on my website, or explore one of the free budgeting apps if you like data at your fingertips).
Set 1 or 2 short-term goals (e.g., build a $500 emergency fund or pay off one credit card), if possible make them SMART goals that are specific, measurable, achievable, realistic and timely. Here is a printable SMART Goal Vision Board example.
Schedule a monthly money meeting (track your progress to the budget, adjust as needed because life happens, and celebrate your wins).
What happens when you don’t have a plan? It could derail your budget, savings or even retirement. I’ve heard stories from my clients where they go years without knowing what they’ve spent their money on, they just know they have nothing to show for it in their accounts or they have minimal dollars in retirement. The income just vanished and they are left horrified to know it’s all gone. Remember, without a plan your money will slip away without a purpose.
I always encourage my clients that asking for help is a strength. In this sense, asking for financial guidance or direction is important. Do you have a friend who seems on track with some smart money moves? Or perhaps a family member that you believe has their finances in order? Reach out to them to ask about their financial plan, perhaps they can give you support and encouragement to get going. Any mentors that are willing to help you are valuable resources.
Most people don’t have a plan - don’t let that be you. There is a Chinese proverb that goes like this “the best time to plant a tree was 20 years ago. The second-best time is now”. Start planning for prosperity and that includes adding a new habit for longevity that brings peace of mind to your household with your personalized financial plan. If you’re unsure how to start rebuilding your financial confidence, reach out to me and schedule a free 45-minute clarity call to strategize and help move you from uncertainty to clarity and full financial power.
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