What Adults Don't Do With Money —

You Aren’t Alone

Do you worry about money? Having enough? Saving enough? Investing it wisely? When you think about retirement, do you feel confident or anxious? Do you wonder if other people feel the same way?

When asked “What keeps you up at night?” 60% of participants in a recent Northwestern Mutual survey said “having enough retirement income.” Now compare that statement to what people actually do about it. The findings from the research show a conflict between worries and actions.

About planning for the future

Only 50% of this group said they contributed to an IRA, stocks, or a mutual fund outside their employer’s benefit plan. What’s going on here? If people are worried about retirement, why aren’t they doing something about it? Some reasons:

• Lots of us don’t know how to use financial tools. The vast majority in the survey failed to score even 60% on questions about personal finance matters.
• Many of us are so overwhelmed by the number of choices for investing that we don’t act at all. We become paralyzed by indecision.
• We find that we play mental games with ourselves. We aren’t consistent in the way we value money when we spend and save. Only 6% of survey participants with 401(k) plans contribute the maximum to matching programs. The other 94% forego this free money!
• Despite the fact that we feel ill-quipped to plan for retirement, many of us don’t seek expert help. The survey found that those who do work with financial professionals are more confident and relaxed about money and retirement.

About saving

We fare no better when it comes to saving. The survey found that –  

• One-quarter of us don’t save anything for long-term goals.
•  One-quarter of us don’t know how much we’ve saved.
• Among those of us who try to build up an emergency savings fund, nearly one-third have saved less than $1,000.

Impact on families

These findings are dangerous for families. If parents are not modeling good financial behavior, their children will imitate these spending habits. The more educated we become, the better we can teach our children. They are the heirs of our financial behavior – good or bad. Looking for ways to get a better handle on your money? Here are steps you can take right now.