A new study from Northwestern Mutual highlights how many Americans were struggling in their lives to have financial stability, even before the COVID-19 outbreak that has led unemployment to skyrocket putting millions of Americans out of work. Yet prior to the pandemic and subsequent market crash, 33 percent of Americans were already close to economic uncertainty and within just three paychecks of having to either borrow money or skip bills.
Every year, Northwestern Mutual releases a Planning and Progress Study, which explores Americans attitudes and behaviors towards money, financial decision-making, and broader issues that impact their long-term financial security. The study found that during economic uncertainty and market volatility, close to half of Americans rely on cash and money market funds and just under 20 percent rely on stocks, bonds and life insurance.
Over 70 percent of Americans say they need to improve their financial planning, though many still consider themselves “highly disciplined” or “disciplined” planners. That is one positive sign in the data that people are setting precise goals and utilize a plan to meet these goals.
The study encouraged people to recognize the importance of financial planning, which often comes in the form of professional help, such as an advisor. Already 29 percent of Americans work with an advisor, indicating that many are ready to confront their financial situation, but there is still ways to go for many people who would benefit from analyzing their finances and taking educated steps towards their long-term goals.
“Whether it comes from a sense of instinct or responsibility, most people recognize the importance of planning,” said Christian Mitchell, executive VP and chief customer officer at Northwester Mututal. “Our message to people at this unprecedented time is simple: if you don’t have a plan, it’s time to work with an advisor that can help you create an actionable financial plan to meet your needs today and in the days ahead.”
Read How a Recession Offers Unique Opportunities in Starting a Business
