Research and Statistics

Those with financial plans make other smart money moves


If you write down a financial plan, you’re much more likely to have an emergency fund and pay off your credit card bills monthly, Charles Schwab research shows

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Only about a quarter of Americans have a written financial plan, according to new research from Charles Schwab. But among those who do, it’s far from their only healthy money habit.

Schwab’s annual Modern Health Index survey found that adults with a written plan were far more likely than nonplanners to be regular savers, to be prepared for emergencies and to effectively manage their debt.

While about 1 in 4 nonplanners (26 percent) said they never carry a credit card balance and always make any loan payments on time, or have no debt at all, 42 percent of planners were able to say the same.

Similarly, only about a quarter of nonplanners (24 percent) reported having an emergency fund. But those with a written plan were more than 2.5 times as likely (65 percent) to say they had funds at the ready for an emergency.

Being able to cover monthly expenses and then still stash money in savings every month was another area where the two groups diverged substantially. Only a third of nonplanners said they save each month, compared to a whopping 75 percent of planners who do.

Behavior across generations varied, with millennials more focused on planning and saving than older generations.

Three in 10 millennials (31 percent) said they have a written financial plan compared to just 20 percent of Generation Xers and 22 percent of baby boomers. And 36 percent of young adults reported having specific savings goals. Only 25 percent of Gen X and 17 percent of baby boomers could say the same.

Schwab’s 2018 Modern Wealth Index survey was conducted online by Koski Research in mid-January, among 1,000 Americans aged 21 to 75. After weighting the results to be as demographically representative of the U.S. population as possible, Schwab’s findings were released May 15, 2018.

Those with a financial plan make other smart money moves

See related:How to create a budget, stick to it and save using apps and card rewards, More infographics

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