As tax day approaches, money is on the minds of Americans across the country.
Nearly 86% of Americans feel stressed about finances, with debt and everyday expenses being the leading causes of anxiety, according to a surveydone byORCInternational, on behalf of the Certified Financial Planner Board of Standards, Inc. (CFPBoard).
This anxiety is usually caused by a lack of or poor planning according to Key Bank Certified financial planner Joel Redmond.
“If you have this innate, unsettling dread about knowing you have more debt than you should, knowing you’re spending more than you want to, then probably what you haven’t done is gone and gotten a piece of paper and written down the expenses and tracked them... or seen what you actually spend over a given period of time,” Redmond said.
According to the survey, developing a financial plan and becoming more knowledgeable in certain areas of finance are the best ways to reduce financial stress.
“There’s room for almost any demographic of society to benefit from financial planning,” Redmond said. “Even the emerging... young people that are getting ready to enter the workforce can begin to set up savings plans, think about starting families and getting powers like insurance, buying homes, [and establish] programs to pay out their debt and increase their savings.”
To make the process less intimidating, Redmond recommends people analyze their spending and saving habits in small pieces, taking it even as small as day by day. Large-scale, comprehensive plans can be helpful, however, the goal is consistency.
“It’s really the execution and implementation of an ongoing spending management plan that’s way more important than any initial ideas you can come up with,” Redmond said.
OTHER FINDINGS FROM CFP FINANCIAL STRESS SURVEY
- Leading causes of financial stress: Debt (23%), Everyday Expenses (21%), Health Expenses (14%), Retirement (13%)
- Demographic Changes: Respondents age 65 or older are more likely to stress about health expenses (22%), whereas younger respondents (ages 18-24) stress about high education costs (23%)
- Financial Plans: 27% say having a financial plan would help with their stress; among younger respondents (18-44) that jumps to 35%; More knowledge in financial areas would help 22%, while 12% would rest easier if they had more time to focus on finances.
April is designated as financial planning month. Redmond says people can get financial management tips and find a planner at LetsMakeAPlan.org