A new study claims to have identified a pattern of behaviors that characterize the happiest and least-stressed Americans – and yes, it includes working closely with an advisor.
According to The Guardian Study of Financial and Emotional Confidence, 78% of working American families are stressed and worried about their financial future, regardless of age, gender, income or other demographics.
In its study, Guardian identified four categories of behaviors. One in particular, “Confident Planner,” was exhibited by 21% of survey respondents, and Guardian notes that individuals in this segment were not only the happiest and least-stressed, but significantly more likely to exhibit these four financial behaviors:
- Education: The Confident Planners have higher levels of education as well as financial competence as measured by an assertion of basic understanding of financial concepts and products.
- Plan: These individuals are more likely to live within their means and have some form of a written plan with specific details and clearly outlined objectives.
- Ownership: Most own products appropriate for their financial goals that incorporate both growth and protection solutions.
- Partnership: The majority work closely with an advisor and use some type of planning tool.
Yes, indeed – in the words of the survey authors, “The happiest and least-stressed Americans are the most financially literate, are more likely to have a detailed plan, and own appropriate products to financially protect their families.”
There is, of course, a reason – several, actually, why only one in five survey respondents are in that category. Guardian notes that:
- Nearly 60% of Americans identify having at least some guaranteed income in retirement, apart from Social Security, as a major priority, but fewer than one in four feel very confident in any aspect of their retirement finances.
- While just over half (52%) of Americans say that building savings is a major priority, more than two thirds would not describe themselves as good at living within their means.
- Having a solid, long-term plan for achieving your financial objectives is a major priority for 47% of Americans; however, 81% don’t feel that they are good at setting up a long-term financial plan and sticking with it.
The other behavioral groupings identified by Guardian are:
- Day-to-Day Decision-Maker: Generally stressed and struggling with finances. In the study this segment included the highest proportion of women and Gen Xers.
- Ambitious Spender: Stressed but coping. Small business owners comprised a large segment of this category in the study.
- Retirement Realist: Fearful of the future, with an above-average emphasis on savings and having adequate retirement income.
- And of course, the Confident Planner: Very positive on work/life balance. Study participants in this segment placed an above-average emphasis on retiring with a secure income, and making good investment decisions, leading to a higher degree of overall life satisfaction than the other segments.
Guardian conducted a national online survey of 4,971 Americans age 18 and older who are currently employed full-time or part-time, have never retired, and have household incomes of $50,000 or more.
You can take the Guardian Financial Confidence Quiz at https://www.guardianlife.com/insights-resources/financial-confidence-quiz.