After nearly two years of worrying about our health and well-being, Americans are beginning to return to familiar daily routines. While the impact of this difficult period will linger, there are some habits we have formed that are worth holding onto. From walks with our new puppies to family dinners to fitness programs we’re finally going to stick with, it does feel good to consider the positive outcomes of this challenging chapter.
Changes to our habits don’t stop there, many people are thinking about their futures as well. When it comes to managing personal finances, we’ve seen the pandemic shift behaviors in ways that boosted confidence in achieving their financial goals. Overall, consumers are feeling more confident this year than last about their ability pay the bills (67%), cover housing expenses (58%), and afford the expenses of their desired lifestyle (53%), according to New York Life’s recent Wealth Watch survey. Well over half (58%) spend more time thinking about their finances compared to last year, and some have even built nest eggs and are more willing to work with a financial professional as a result.1
Still, a lot of misconceptions echo throughout the financial guidance arena. To clear the air and learn more about protecting your financial future, we are going to explore some common myths when talking about finances.
Myth: Financial Guidance Is For The Super-Rich
Fact: Whether you are working towards long- or short-term goals, or just starting your financial plan, building a relationship with a financial professional—who will act as a trusted partner, answer your questions, help with budgeting and saving, while keeping you on track for retirement—can help secure your financial future, regardless of how much money you earn or have in savings. They’ll take the time to understand you, your financial philosophy, and what you want to achieve; and make sure you are 100% comfortable with every decision.
Myth: Younger People Aren’t Interested In Guidance From Financial Professionals
Fact: Due to paused expenses during the pandemic, millennials and Gen Zers reported saving—for some, the first time in their life. Because of this new-found savings, they are now more likely to consider getting help from a financial professional (53% and 51%, respectively). People are emerging from the pandemic with a sense of optimism and their openness to hands-on professional guidance is very encouraging. Data shows that people who do work with financial professionals see improvements to their financial well-being—making them less likely to make financial decisions they regret.2
Myth: Budgeting And Planning Are The Same
Fact: Quite the opposite is true! Working with a financial professional to develop a plan for achieving your long-term financial goals will actually help people manage their day-to-day spending to satisfy more immediate goals. There are synergies between protecting the future and meeting more tangible short-term goals. It’s all about finding the balance between pleasurable experiences today, such as dinner with friends at the new trendy restaurant, and the delayed gratification of financial security, including home ownership, or living a desired lifestyle in retirement.
Myth: You’re Too Young To Start Investing
Fact: It’s simply never too early to begin planning your financial future. In fact, the earlier you start saving, the greater the impact that compounding can have on your savings or investments. It may be hard to imagine retirement while you’re still early in your career, but this is a great time to create your roadmap to retirement. The same thinking applies when making investment decisions that could help build a nest egg or fulfill other financial goals. Still, the large majority of younger generations still don’t have plans for retirement. In fact, 78% if Gen Zers and 51% of millennials say they have neither retirement strategy nor retirement savings. When it comes to personal finance regrets, a recent study of older workers revealed that adults between 67-73 wished they started saving earlier (71%) and wish they saved more (77%).
The pandemic has taught us to do all we can to protect ourselves and our loved ones; preparedness is key since we don’t know what tomorrow will bring.
Read the original article in Financial Advisor here.
1 New York Life Wealth Watch/Morning Consult survey conducted between September 10 - September 14, 2021, among a national sample of 2,200 adults. The interviews were conducted online, and the data were weighted to approximate a target sample of adults based on gender, educational attainment, age, race, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.
2 New York Life Wealth Watch/Morning Consult survey conducted between June 16 and June 20, 2021, among a national sample of 2,200 adults. The interviews were conducted online, and the data were weighted to approximate a target sample of adults based on gender, educational attainment, age, race, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.
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