Money isn’t everything, but any normal, rational, well-balanced human being wants a solid financial life. Granted, a “solid financial life” is a vague term, and certainly the details of what constitutes a solid financial life will vary with each individual. But the concept encompasses desires that are almost universal: to feed one’s family, secure good housing, provide education and opportunities for their children, and ensure an income in old age—with a minimal level of stress and reasonable level of assurance or guarantee.
Unfortunately, many individuals, even in the United States, fall short of reaching these primary financial objectives. Most Americans may get by, but they struggle to get ahead. A brief sampling from last week’s financial headlines: “Americans’ Retirement Optimism Likely Built on Shaky Ground,” “Future High Earners May Not Get Social Security,” “Car Shoppers Drown in Debt,” and “Risks From Falling Home Prices.”
Even if some of the headlines are hype, the underlying story is: most Americans are not succeeding in their financial planning. And for the most part, the failure is not because they lack the resources, but rather because they have been unable to consistently execute basic financial strategies.
Why do most Americans fail to achieve a solid financial life? From empirical observation and statistical surveys, those in the financial services field would answer as follows:
1. They don’t start soon enough
2. They don’t plan long enough
Why don’t most Americans start soon enough and plan long enough? You could list a number of factors that contribute to this misunderstanding. But (in our humble opinion), one of the biggest reasons most Americans don’t start planning soon enough and don’t plan long enough is because they don’t fully understand the immediate and long-term consequences of their current financial decisions. Financial planning isn’t about a better future its about a better “now.”
Financial planning is often perceived as a decision about delayed gratification. It’s something that involves “tomorrow.” A “tomorrow” mindset invites procrastination, because as long as you can put it off until tomorrow, why do it today? In our financial culture, “tomorrow” is retirement. And even though retirement is an important financial topic, it’s not urgent. So if you are:
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