Are You Confident in Your Savings?
Blog post
12/18/24I was recently at the counter of a bookstore facing one of the worst deals of my life. I was looking to offload some books as I was organizing my office, they were never going to get read, and at this point these boxes had been sitting in my car for 2 weeks. I never thought about what the books were worth. I was just glad I found a bookstore to sell them. But when the lady across the counter blankly offered me $13.76, I was disgusted. Am I really going to let her get away with this? I could sell these books for way more. But I did not, I took the $13.76 and went on my way.
In most situations people choose the path of least resistance. One interesting discovery in our recent survey (2024 Emerging Wealth Family Report: Financial Habits, Brand Loyalties, and Hobbies) of next generation families is the mixed response on whether to use a budget. Only 23% of respondents said they always use a strict monthly budget to manage expenses. This may not be surprising, as following a budget is not easy. It takes effort to properly organize, trust/collaboration to manage, and conflict along the way about how to include items like an upcoming golf trip. (That line item is still under consideration in our household.)
What’s confounding in the data is the level of confidence (70% of respondents feel they are saving enough for retirement and 79% of respondents consider themselves financially literate and capable of making informed investment decisions) given the mixed use of budgeting and/or hiring an advisor. While we did find that savings is a priority among this group, my question is how do you know you are saving enough or in the right places? One of the greatest benefits of creating a budget is to give you the freedom to spend… up to an appropriate level that allows you to save. And one of the greatest benefits of a savings plan and a financial plan is to make sure these funds are going into the right places, and it is enough to support your lifestyle in the future. The coordination of those tools can be powerful and will inspire confidence.
There is not a one-size-fits-all way to budget. Even if you have sophisticated software and use a certified financial planner (CFP) like we have at THOR, it’s still going to take personalization and hard work. But I would argue that going down the budgeting path, although not the path of least resistance, is a worthy endeavor.
If you have questions and would like to talk with us further, please call us at 513-271-6777. For more THOR reading, click here to go to the Blogs and Market Updates section on our website. Follow us on social media: