Thought-Provoking Thursday: For Financial Planning, Time Is Everything
When Ben Franklin coined the phrase “time is money” in 1748, he had no idea how precious a commodity time would become. Each new year may bring technological advancements that are supposed to make everyday tasks more efficient, yet Americans are too busy to sleep, too busy to eat dinner together, and according to new research, too busy to make a financial plan.
When Ben Franklin coined the phrase “time is money” in 1748, he had no idea how precious a commodity time would become. Each new year may bring technological advancements that are supposed to make everyday tasks more efficient, yet Americans are too busy to sleep, too busy to eat dinner together, and according to new research, too busy to make a financial plan.
According to Northwestern Mutual’s 2013 Planning and Progress study, 63 percent of Americans say their financial planning needs some work — yet more than one in four say they’re just too busy to think about long-term goals. And as for all those smartphone apps and websites that are supposed to make financial planning easier? Thirty-one percent of survey respondents say that they find the 24/7 connectivity distracting.
“I think people are overwhelmed,” said Greg Oberland, Northwestern Mutual executive vice president, noting that it’s easy for people to procrastinate if they don’t know where to start. “People see benefit, but they haven’t started developing their own personal plan.”
For those who don’t know where or how to begin getting control of their financial life, Oberland says that people shouldn’t be ashamed to seek help. “I like to analogize it to what’s going on about personal health,” he said. “A lot of people have reached out to personal trainers and nutritionists. If you’re working with someone like that, you feel accountable to follow through. I think working with a financial adviser is a way to get them going [with a financial plan] and feeling accountable to stay on track.”
In an interesting twist, the Northwestern Mutual study found that there is one age group that is particularly disciplined when it comes to financial planning: the struggling-to-build-wealth Generation Y (adults ages 25 to 32). For all the headlines about this group’s burgeoning student debt and slow-building net worth, 24 percent of this age group says that they’re “highly disciplined” financial planners, versus 14 percent of Baby Boomers who say the same thing.
“I think Gen-Ys are seeing the financial problems or challenges that their parents are facing,” Oberland said. “I do think there is a greater awareness on the part of that generation that they’re going to be responsible for their financial future. I think Gen-Ys recognize that if I’m going to have better future, it’s up to me and I have to start now.”
If starting with a financial adviser sounds too overwhelming, Oberland recommends taking baby steps — and above all, not trying to do too much, too soon. “You have to be careful you don’t construct something that’s too big, too grand,” he said. “[Say] ‘I’m going to make a plan that I’m going to save a little bit every month.’ And then as you start that, and as you gain some confidence, then you can expand it more broadly.”
