You don't need a report to tell you that many American families are struggling to make ends meet -- and can only dream of the concept of saving. But in case you had any doubt, research released this week by the Consumer Federation of America (CFA) and Certified Financial Planner Board of Standards (CFP Board) confirmed it.
Oh, and one more tidbit for your "well, duh!" file: The survey also shows that those who have prepared a personal financial plan feel more confident and report more success managing money, savings, and investments than those who have not.
While the findings are more depressing than illuminating, they're none the worth sharing, just in case you want to refute someone who is delusional enough to think the economy is doing just fine.
Nearly two-fifths (38%) of the 1,508 household financial decision makers surveyed said they live paycheck-to-paycheck, up from 32% in 1997. Less than one-third (30%) indicated they felt comfortable financially -- down from 38% in 1997 -- and only about one-third (34%) think that they can afford to retire by age 65. The survey was conducted by Princeton Survey Research Associates International (PSRAI).
Those with financial plans -- and, I suspect, jobs -- feel better about their situations than those who don't have them. They're more likely to feel they are on pace to meet all of their financial goals, such as saving for retirement or for emergencies; feel "very confident" about managing money, savings, and investments; and are more likely to describe themselves as living comfortably.
The problem is only 31% of respondents said they had a comprehensive financial plan. About two-thirds (65%), however, reported that they follow a plan for at least one of their savings goals.
The survey also found more than half of respondents said "it's hard for me to know who to trust for financial advice" (55%), "investing seems complicated" (52%), and "I'm worried about losing my money if I invest it" (55%).
Kevin R. Keller, CEO of CFP Board, called those fears understandable given recent revelations about financial fraud, and the manipulation and abuse of clients by dubious financial professionals. Do you agree? More importantly, do you think fear of investing is perpetuating this cycle of financial gloom-and-doom -- paycheck-to-paycheck living, with no real end in sight?