The REI promotion asked “What’s your but?” Our excuses for not being active might sound like this: “but it’s too early, too late, too hot, too cold…” and I get it. My perception of getting out for a hike is often that it’s going to be any one of these things – too early, late, hot or cold – but that changes once I start down the trail and see that it’s fine, in fact, it’s enjoyable! Perceptions can hold us back.
That’s the case for 75% of Americans according to Charles Schwab’s 2018 Modern Wealth Index based on a study of 1000 participants.
75% Americans don’t have a written financial plan because, for the most part, their perception is they don’t have enough money to need a plan. Before I tell you the rest of their reasons, take a look at the benefits of having a plan – apparently just having a plan is a powerful wealth tool!
So, why is it that people don’t have a plan?
- 45% I don’t have enough money to need a plan
- 20% It never occurred to me to have a plan
- 20% I wouldn’t know how to make a plan
- 16% I don’t think I would be able to stick to a plan
Good news – millennials are bucking the trend. 31% have a financial plan and 36% have specific savings goals – higher percentages than any of the other age categories.
We create financial plans for clients day in and day out. Typically they are straightforward “to-do” lists designed to achieve their long-term financial goals. We check back with the client in six months – how are you doing? any questions? – and meet annually to review and revise their plan. I would argue that you don’t need to have money to have a plan but that you need to have a plan if you want to build wealth.
Schwab’s head of Investor Services said “Planning is critical to achieving any goal. It’s like establishing an exercise regimen to get in shape − we need to take the same approach to keep our finances in good health and on track.”
So, what’s your but?
Note: Click here to take the Modern Wealth Index survey and receive your own personal score.