Having a financial strategy can be quite valuable, though there may be many individuals who are looking in the wrong places for their budgeting help.
Nearly 80 percent of young people noted that they look to the financial methods of their friends to decide what to do for themselves, according to a report completed jointly between the Ad Council and the American Institute of CPAs. Close to two-thirds explained that they also try to move to the same places their friends do, while 64 percent noted that they do this regarding clothing, as well. Another 66 percent noted that it is hard to not feel pressure regarding doing the same things their friends do.
“As the old saying goes: Be careful about the company you keep,” said Ernie Almonte, chair of the AICPA’s National Financial Literacy Commission. “Many young adults are building financial foundations with the wrong blueprints. They need to make sure they’re modeling the best behavior for their long-term financial stability.”
This notion of financial stability is specific for many young Americans. The report noted that 70 percent of this group felt that if they paid their bills on a monthly basis, they were financially stable. However, when it came to gender, women thought they were more financially stable than men were. This may be partly due to more men looking to keep up with their friends than women typically do.
Not enough people have financial strategies
While some people might be looking in the wrong places to get their financial methods, there also may be a sizable number of individuals who are not proactive enough to get their finances in order.
More than 25 percent of those who are considering making an investment do not have some type of financial strategy in place, according to a report from Nationwide Funds. Approximately 31 percent noted that they haven’t created one of these methods, while 20 percent said that they do not think having one is necessary. However, 15 percent noted that they don’t know where to start.
“We live in an era when Americans are more responsible for their own financial security than ever before,” said Michael Spangler, president of Nationwide Funds. “However, for various reasons far too many haven’t taken the time to draft a detailed financial plan to help them achieve their goals over the short, medium and long terms.”