Financial planning is essential to anyone who wants to be successful with their money, but the reality is that many Americans don’t complete this task for a number of reasons.
According to Northwestern Mutual’s 2013 Planning and Progress Study, 63 percent of Americans said their financial planning needs to improve. The No. 1 obstacle named was not having enough time.
“There’s an interesting parallel that exists between managing your finances and managing your day-to-day life in that it’s so easy to let short-term needs and wants over shadow the more critical long-term goals,” said Greg Oberland, Northwestern Mutual executive vice president. “We’re all susceptible, particularly today, as we’re often overloaded with information and over scheduled.”
Additional findings from the survey showed that many Americans don’t have any financial planning. Nearly half of respondents described themselves as “informal,” which means they have no specific plan in place, while 9 percent said they had no financial goals or plans.
Financial planning is an important aspect of people’s lives, and those who don’t complete it may find themselves with money troubles, such as high credit card debt or not enough savings for retirement.
Make sure you open your statements
One of the major aspects of financial planning is knowing where your money is going and how much you have. To gain this knowledge, consumers will need to open their statements each month. After a long day of work, it might be easy to just brush over your statements that came in the mail, but this should be discouraged. To avoid this, you may want to switch to online statements, which allow you to view your spending activity at any time of day.
Don’t be afraid of hiring a financial planner
People who aren’t financially savvy, could benefit from hiring a financial planner. These professionals can help you manage your money on a day-to-day basis. However, it is important you find one with good references, as you don’t want someone who is inexperienced managing your finances.
Additionally, people who find themselves in trouble with credit card debt shouldn’t shy away from seeking credit counseling. Getting help from these professionals can be a good way to get your finances back on track.
Diversify your portfolio
When investing, one of the most important steps that needs to be taken is to diversify your portfolio. This helps you spread out your investment risk, so you don’t have all of your eggs in one basket.