NDSU Extension Service - Ramsey County


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Much, Some or No Planning

Much, Some or No Planning


Northwestern Mutual Life Insurance Company recently released finding form a 2014 study that asked the question – “When it comes to your finances, how much do you plan?”

The researchers asked: When it comes to planning your finances, are you a highly disciplined planner (meaning that you have exact goals and have developed a specific road map to meet them), a disciplined planner (you have goals and plans but sometimes deviate along the way), an informal planner (you have goals but no plans to achieve them) or a no planner (you have no goals and no plans). They then correlated the results with happiness.

Just over half of respondents indicated that they're planning in a disciplined or highly disciplined way; 46 percent were not planning at all.  Nearly three-quarters of the highly disciplined folks say they feel "very financially secure." Just 17 percent of non-planners said the same.  70% of Highly Disciplined planners felt ‘very financially secure’ vs. 51% of disciplined planners, 34% of Informal planners and 17% of non-planners.

As for happiness in retirement? Ninety-one percent of highly disciplined folks report they are happy in retirement.  And the non-planners?  63 percent reported they were happy in retirement.

The survey certainly confirms the idea that having a plan is one of the factors that boosts financial happiness. Other habits that the planners reported included:

Making saving a habit - Although financial planners often advocate saving at least 10 percent of whatever you're bringing in (and 15 percent if you're getting a late start), crossing the 5 percent line is enough to boost your mood — as long as you do it habitually.

Pay your bills as they arrive - People who do are significantly happier. Two thoughts on the “why” of this is that paying all your bills at once adds up to a large sum of money coming out of your accounts at once. Paying one bill at a time is less painful.  And second, paying a bill immediately gives you time to adjust your credit card use, adjust the thermostat or lower your grocery bill before the next billing cycle so you are more in control of your spending

Give back - Being charitable provides a boost to your psyche that is tough to replicate in any other way. Volunteering and donating your old or unused belongings have the same result.

Communicate- Finally, none of these things work if you've got a spouse or partner aiming in the opposite direction. So, when you sit down to make your plan — make an effort to do it together.

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