What's the big deal?Personal financial planning can be an intensely private matter, but the survey reveals some disturbing trends that come out of our reluctance to talk about cash flow and savings. Seventy-one percent of respondents to the survey indicated that they learned about finance and saving from their parents. Only 36 percent of parents reported talking about personal finance to their children on a regular basis. That's a lot of important lessons NOT being learned.
Why the hush-hush?Financial worries are among Americans' top concerns. Around one-third of the survey respondents reported that financial health concerns outweighed their physical health concerns.Lack of confidence and knowledge seems to be part of the reluctance to talk. Thirty-five percent of the reported barriers to better financial health were “knowing the best approach.” Only 40 percent of Americans surveyed feel good about their savings and emergency funds, even if many of them feel good about their day-to-day spending.Around one-third of Americans have some sort of family budget or financial plan, the rest may not have the knowledge and guidance to improve their financial health, Wells Fargo reports. While a majority of Americans consider themselves healthy when addressing immediate finances, much of that confidence evaporates when it comes to savings and retirement planning.
What's the takeaway?
Families need to relax and get comfortable with talking about personal financial planning. They also need to get equipped with a few financial tools and strategies. A few ideas:
- Find an experienced financial adviser to help guide your financial planning journey.
- Learn about savings, investment, insurance and retirement options.
- Start tracking household finances. Review expenditures regularly and make a family budget.
- Set short and long-term financial goals and determine the steps needed to achieve them.
- Evaluate your family budget and find ways to reduce expenses to meet your monthly savings target.
- Talk about the family budget frequently, have regular check-ins and keep everyone motivated.
Teach your children about money
- Involve your children in the budgeting, saving and spending decisions.
- Engage your kids with their own short-term milestones. Look for opportunities to help them practice making their own budgeting and spending decisions.
- Don't gloss over financial details. Share your financial successes and shortcomings.
Talking about your finances won't be comfortable at first, but it will be worthwhile, and it will get easier with practice. Don't wait another day to harness the biggest elephant in the room!