Close to nine in ten American households do formal or informal financial planning but the extent of this planning varies greatly, according to new research.
Sponsored by the Consumer Federation of America (CFA) and Certified Financial Planner Board of Standards, the research shows that only one in five household decision-makers (19 percent) are comprehensive planners, who take a methodical approach to financial planning, while one in ten (10 percent) do virtually no financial planning at all. The research further identifies nearly two-fifths of households (38 percent) as basic planners and one-third of households (33 percent) as limited planners.
While higher income households are more likely than lower income households to plan, more than half (54 percent) of comprehensive planners have annual incomes below $100,000, the report adds.
“Those families with the lowest incomes are the ones who would benefit the most from financial planning,” says CFA’s Executive Director Stephen Brobeck in a statement. “Households with the fewest financial resources benefit the most from carefully planning spending, saving and debt management. Marshaling limited financial resources to meet essential needs represents a huge challenge for these households.”