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Most people do financial planning

By Marcie Geffner ·
Tuesday, September 24, 2013
Posted: 7 pm ET

A new survey has found that most U.S. households do some sort of financial planning, though the amount varies, and those who plan also save more and feel more confident about their financial future.

The survey was released by the Consumer Federation of America, a nonprofit association of almost 300 consumer organizations, and the Certified Financial Planner Board of Standards, which certifies financial planners.

The survey found that 19 percent of household decision-makers were "comprehensive" planners who had a financial plan prepared with the help of a Certified Financial Planner professional or stock broker. These households had specific savings goals, and most had specific plans for retirement and emergency savings.

About 46 percent of the comprehensive planners had an annual household income of at least $100,000, and 49 percent had a four-year college degree. But 54 percent had an income of less than $100,000, and 24 percent had an income of less than $50,000.

Another 38 percent of the household decision-makers were "basic" planners who had a plan for one or more specific savings goals and oftentimes a household budget, though it wasn't always written or stored in electronic format.

About 33 percent of the household decision-makers were "limited" planners who had a budget or a plan to address at least one savings goal, typically for retirement savings. Most of these planners had no credit card debt or had a plan to pay off this type of debt.

About 10 percent of the survey respondent did virtually no financial planning. These households were the most likely to have credit card debt and no plan to pay it down. About 53 percent of nonplanners had a household income of less than $25,000, and 69 percent had no more than a high school education, if that.

The more extensively households planned, the better prepared they were financially, and the more effective they were at saving, investing and managing credit card debt, the survey found. Those who planned also had more confidence in managing their finances.

Researchers surveyed 1,002 financial decision-makers nationwide from April 12 to 24. The survey included more than 60 questions.

In a statement, CFA Executive Director Stephen Brobeck said the lowest-income households would benefit most from carefully planning their spending, saving and debt management, though marshaling limited financial resources to meet essential needs represents a huge challenge for these households.

Kevin R. Keller, CEO of the standards board, said the research reaffirmed the value of financial planning for all households.

How much do you save?

Follow me on Twitter: @marciegeff.

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