Americans with a prepared financial plan feel more confident and have more success in managing their financial issues than those who have not, according to a 60 page report conducted by the Consumer Federation of America (CFA) and Certified Financial Planner Board of Standards, Inc. (CFP Board).
The study, conducted by Princeton Survey Research Associates International, showed that 38% of the 1,508 individuals surveyed in charge of their household’s financial decisions stated that they lived from paycheck to paycheck, compared to just 30% who said they were comfortable financially, and 34% who expect affordable retirement by age 65.
Evaluating several measures of financial well-being, the following results indicated that those with a financial plan fare better than those without:
- By a margin of 50% to 32%, excluding the lowest income bracket (less than $25,000), planners are more likely to feel on target with financial goals.
- Fifty-two percent of planners feel “very confident” about managing their financial resources, compared to only 30% of non-planners.
- Only 22% of non-planners described themselves as living comfortably, compared to the 48% of planners; additionally, planners in the $50,000-$99,999 bracket claim to live as comfortably as non-planners in the $100,000 and above bracket.
- Within the two highest income brackets ($50,000-$99,999), planners report higher percentage of income savings and greater wealth built than non-planners – 57% vs. 39%.
- In the two lowest income brackets, planners with credit cards predict a greater likelihood of paying off credit card bills compared to non-planners (41% compared to 16%); the same holds true for the second highest bracket (46% vs. 26%).
- Of the respondents, only 31% claimed to have a comprehensive financial plan, while 65% indicated following a plan for at least one of their savings goals.