Ninety-five percent (95%) of American families are not financially prepared for retirement (this figure may vary a few percentages depending on the source, but the essence is the same. It is a seriously bad number)!
“How can this be?” you ask.
In an age where so much financial information us readily available, with all that is known and obvious around us including the popular awareness of 401Ks and Roths, the pressure to invest, and hundreds of how-to books and CDs, how can we still be so woefully out of control financially? Why, with all these resources and available financial tools, do we have such a wealth of information and a dearth of knowledge?
Having information is not the same as the knowledge needed to put that information to good use. Knowledge is about facts, information, and skill acquired by a person through experience and education resulting in a theoretical or practical understanding of a subject. It does Americans no good to be exposed to all the wonderful financial tools and resources if they don’t know how to use them. Such a problem consumers face… So much information and so little knowledge!
The absence of financial knowledge can make you subject to the winds of financial change that blow you hither and yon. When interest rates go down, you react by refinancing your home at a significant increase in cost over time. Your employer offers a matching 401(k) but since you’re in debt and aren’t making enough 
interest on a 401(k) to keep up with debt interest, you aren’t in reality making any money. And what about the last time you got a big check for commissions or bonus and spent it all catching up from over-spending the last time you got an extra big check? You save money for emergencies every month but then have to dip into that savings to pay bills. You give money to your kids and wonder why they don’t pay it back. You make a good income but are’t sure about retirement and you are still living paycheck to paycheck.
And so it goes, the result of which is a national statistic that reflects unfavorably on our nation’s financial preparedness.
Here’s the problem of having lots of information and no knowledge about how to use it broken down.
Americans…
- Lack general attention to the management of money.
- Have no overarching financial Master Plan.
- Have no Spending Plan.
- Have no Debt Plan.
- Are taking taxes for granted.
- Are trying to make more money to solve the problem.
- Have inadequate communication between partners and amongst families.
But let’s not let all this negativity spoil our desire to be better prepared. There is hope, growth and financial opportunity available. Simply assume that what you don’t know about money is hurting you, and get help. When I say help, I mean holistic help — qualified help that is knowledgeable about all the problems listed above.
For more information on this and other personal financial questions, call Alan 801-292-1099, alan@moneymastery.com.
