Just 25 Percent of Americans Use This Wealth-Building Tool

Just 25 Percent of Americans Use This Wealth-Building Tool
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Putting your financial plans in writing can significantly improve your odds of accomplishing financial goals — even basic goals like saving money — a recent survey shows. But few Americans have bothered to put pen to paper when it comes to their finances.

Only 25 percent of Americans have a financial plan that they have put in writing, according to the 2018 Modern Wealth Index from Charles Schwab Corp. Additionally, 29 percent of Americans have no financial plan at all.

The Modern Wealth Index findings are based on a survey of 1,000 Americans ages 21 to 75.

The value of a written financial plan

People with a written financial plan are more likely to report having habits that can help build wealth.

For example, the survey shows that 75 percent of folks with a written plan say they are able to pay their bills and still have money left to save every month.

Only 33 percent of folks without a written plan can say the same, however. That effectively means folks with a written plan are more than twice as likely to save money regularly.

The survey also found that people with a written plan excel in other areas of saving. For example, 65 percent with a plan have an emergency fund. That compares with just 24 percent without a plan.

And that plan helps people feel better about their money, with 62 percent of people with a plan feeling financially stable, compared with just 32 percent of folks without a plan.

Charles Schwab’s survey is not alone in its findings.

A 2017 Wells Fargo/Gallup survey of 1,000 investors in the U.S. also found that fewer than half had a written financial plan. That included 37 percent of nonretired investors and 40 percent of retired investors who had a written plan.

Putting a financial plan in writing

If you’re among the majority of Americans who have yet to put a financial plan in writing, you might want to start by getting a handle on your current financial situation.

It’s impossible to determine how much money you could or should save each month if you don’t know how much you’re spending — and how your spending compares with your earnings. For help with that, see “How to Automatically Track Your Spending and Goals.”

From there, check out “9 Tips to Ensure You’ll Have Enough to Retire.”

Do you have a written financial plan? Let us know below or on our Facebook page.

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