Employees' lack of confidence in their ability to manage their financial future is undermining their financial priorities by making them behave in ways that prevent them from advancing toward their goals.
That's according to findings from the "Guardian Study of Financial and Emotional Confidence," from the Guardian Life Insurance Company of America.
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The study found that while 78 percent of working American families are "stressed and worried" about their financial future, regardless of age, gender, income or other demographics, the way they behave keeps them from doing what needs to be done.
For instance, although 52 percent of respondents say that building savings is a major priority, more than two thirds wouldn't describe themselves as being good at living within their means.
In addition, while nearly 60 percent say that having at least some guaranteed income in retirement, apart from Social Security, is a major priority, only 33 percent say that the statement "I'm much more focused on the long term than the short term" describes them "very accurately."
Study respondents were classified, according to their replies, as day-to-day decisionmakers, ambitious spenders, retirement realists and confident planners.
Interestingly, the study found that the four segments are not defined primarily by their demographic characteristics, such as income, education or age. Instead, the day-to-day decisionmakers had the highest concentration of women, while ambitious spenders had the highest concentration of small business owners; retirement realists were looking for guaranteed income in retirement and the confident planners were the oldest and most educated group.
However, the study proposes that if people short on financial confidence adopt "model behaviors" that the study identified as belonging to the respondents categorized as "confident planners," they will be able to modify their own behavior to the point that they achieve better results.
The model behaviors suggested by the study are planning (living within set means and having a written financial plan with specific objectives); education (learning more about fundamental financial concepts and products); ownership (seeking ownership of products that match needs and objectives, while addressing growth and protection); and strategic relationships (seeking the right advisor and/or financial tools to assist in planning).
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