Americans' Financial Plan Is Not to Plan

Some people might prefer bathing the dog to sitting down and creating a f inancial plan. However, adults who take the time to develop a comprehensive financial plan are more likely to manage their money successfully, and are more confident about reaching their goals, like saving for retirement or paying off credit-card debt, according to a report released Wednesday.

Unfortunately, they're in the minority. Only one-third (32 percent) of some 1,002 people surveyed say they've created a comprehensive financial plan. And one in two (52 percent) say they don't have a plan at all and they're not likely to make one in the next year.

The people surveyed by the Consumer Federation of America and the Certified Financial Planner Board of Standardx weren't exactly inexperienced with money. They were the decision-makers in their households for financial matters. Among the questions they were asked: how much time did they spend creating and updating a plan and what did their savings goals look like.

Related: Are You Saving Enough?

Respondents were scored on the basis of how well or poorly they followed established financial planning principles. Among those who scored the highest and were deemed "comprehensive financial planners," more than half (53 percent) said they were very confident in their money management skills. Conversely, only about one in four (26 percent) of those who scored the lowest, the so-called "non-planners," felt very confident. One possible reason: four in 10 non-planners say they have substantial credit-card debt and nine in 10 say they have no plan in place to pay it down.

You don't have to make a lot of money to reap the benefits of setting a financial plan, which should include household budgeting, saving for emergencies and retirement, and making a will. More than half (54 percent) of those who had comprehensive plans earned below $100,000 annually. Of course, the tough economy hasn't made it easy for people, particularly those at the lower end of the earnings spectrum, to stash away cash.

Among the findings from the report:

• 88 percent of those with a financial plan are saving for retirement.
• 86 percent are saving for emergencies.
• 28 percent with a comprehensive plan used a financial professional or got help from a computer program or online tool.
• 19 percent used a financial adviser who had a fiduciary responsibility (PDF) to act in the investor's best interest.