Survey says “having a plan…”

It was toward the very end of Dirty Dancing (yes, I will acknowledge to having seen it so often that I can quote from it) that the late Jerry Orbach pulled the late Patrick Swayze aside and ate crow, “When I’m wrong, I say I wrong,” he said before telling Jennifer Grey: “You looked beautiful out there.” Sigh.

Well, I like to think that when I’m wrong I say I’m wrong, too. And that gives me permission, when I’m right, to do a little happy dance. And today, I’m right.

There’s a new survey from the Certified Financial Planner Board of Standards and the Consumer Federation of America on that says – as I have time and time again – having a plan works. According to the survey people who have plans are saving more money, getting into less financial hot water and are more confident about their futures.

And note: Even though this survey was commissioned by an organization that has an undeniable stake in the planning game, hiring a planner to create the aforementioned plan was a pre-requisite. The question asked not whether you had help, but whether you had done the job. And it was doing the job that moved the needle on results.

Why is a plan so important? Because a plan is, essentially, a roadmap that lays out your financial goals and a method to get from here to there. And people who know where they’re going and have some semblance of how they’re going to put one foot in front of the other to move in the right direction actually get there more often than people who have no direction at all.

Unfortunately, not enough people are listening to this message. About two-thirds of the people who took the survey said they have a plan to get them to at least one of their savings goals. But only half that many have a written financial plan that lays out their strategies for both saving and investing.

And, lest you think otherwise, one of the things the survey showed most clearly was that plans make a big difference not just for the wealthy but for folks with moderate incomes. Moderate earners ($50,000 to $99,999) with plans were more likely to pay off their credit card debt every month and to have a fat emergency cushion than those without plans. Moderate earners with plans were even more likely than top earners ($100,000-plus) to say they were living comfortably and were confident in their ability to manage their dough.

So what do you do if you don’t have a plan? Sit down at the kitchen table with your spouse and a pad of paper or a computer and ask yourselves a few questions. What do we want our money to do for us this year? What do we want our money to do for us in the next five years? What do we want our money to do for us long term? The answers to these questions should be things like: Go to Florida. Start saving for college. Pay off the credit cards. Retire at 65. Then ask: How much are these things going to cost? The Internet can be very helpful at coming up with numerical answers to those questions. Finally ask: How are we going to come up with the money to get us from here to there. You may be able to look at your income and spending and figure out how to funnel money out of one pot and into others to meet your goals. But if you get stuck, this is where a comprehensive financial advisor comes in very handy. Make an appointment. I belive you won’t be sorry.

Jean Chatzky

About Jean Chatzky

Jean Chatzky, the financial editor for NBC’s TODAY show, is an award-winning personal finance journalist, AARP’s personal finance ambassador, and a contributing editor for Fortune magazine. Jean is a best-selling author; her eighth and most recent book is Money Rules: The Simple Path to Lifelong Security. She believes knowing how to manage our money is one of the most important life skills for people at every age and has made it her mission to help simplify money matters, increasing financial literacy both now and for the future. In April 2013 Jean launched Jean Chatzky's Money School , a series of college-style, interactive online personal finance courses that give men and women across the country the opportunity to learn from and interact directly with her. Jean lives with her family in Westchester County, New York.
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2 Responses to Survey says “having a plan…”

  1. Anonymous says:

    if my husband, 48, is the bread winner and I just have a part time minimum wage job at 50 years old making about $125 a week, can I invest all of my money into a 401K Plan to try to catch up?

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