Have you thought about your independence and what assures your future happiness? Northwestern Mutual’s 2014 Planning and Progress Study found that the more discipline individuals bring to their finances, the more financially secure they feel in the present, and the greater likelihood they’ll be happy in the future.
Specifically, the study found that 70 percent of “highly disciplined planners” feel “very financially secure” compared to 51 percent of “disciplined planners,” 34 percent of “informal planners,” and 17 percent of “non-planners.” What’s more, highly disciplined planners who are retired are much more likely than non-planners to say they are “happy in retirement” (91 percent compared to 63 percent).
Interestingly, the most disciplined planners come from opposite ends of the age spectrum. Fifty-nine percent of younger adults (18–39) and 54 percent of more senior adults (60+) identify themselves as disciplined financial planners. Adults who are 40 and 59 are the most financially unprepared; more than half (51 percent) identify themselves as informal or non-planners.
Overall, the study found that less than one in five U.S. adults (18 percent) consider themselves highly disciplined financial planners (i.e., those who have set exact goals and have developed specific plans to meet them). Nearly half of adults (46 percent) describe themselves either as informal planners or admit to not doing any planning at all. In addition, 60 percent of all study respondents said their financial planning could use improvement. The number one roadblock, cited by more than one in four (27 percent), was a lack of time.
Therefore, in the lazy days of summer, I propose a challenge: Set some time aside to think about and plan financially for the future. If you truly feel like you don’t have the time for that, consider another challenge issued by Carl Richards, the author of The One-Page Financial Plan: A Simple Way to Be Smart about Your Money. Richards, who has a knack for entertaining with his “back of the napkin drawings,” suggests that a self-imposed media fast could increase your happiness. See the image below for one of Richard’s “napkin drawings on happiness and the media:
As Richards writes, “Let’s hit the pause button for a short time and see how it feels. How do we feel during a day when we focus on what’s right in front of us versus what’s happening halfway around the world?”
I suggest that rather than tuning into CNN and spending time worrying about how events in Greece might unfold over the summer or whether interest rates will rise in the United States come September, you spend more time with your family and friends. Trust me, you can’t do anything about the situation in Greece or the Federal Reserve’s monetary policy. However, you can create some precious family memories! And I’m betting that, in addition to making you happy, some of those conversations on the beach or around a board game will give you new insights into your financial plan and increase your motivation to save for the future.
Here’s to a future filled with happiness and joy!