Heads up, financial planners. This could be a busy year for you.
According to a new survey from Lincoln Financial Group, 59% of consumers said they plan to make permanent changes to the way they spend and save money as a result of the COVID-19 pandemic. The same percentage said they are thinking differently about financial planning and are open to financial planning advice.
The survey was conducted between June and October 2021 of 1,000 adults each month and included quotas to be representative of the total U.S. adult population, Lincoln said.
Sixty-six percent said they believe they are doing an OK job planning for their financial future but still could use some help.
“We are seeing greater focus on spending habits and savings and a real desire to address that rainy day fund, said Sharon Scanlon, senior vice president, customer experience, producer solutions and retirement operations for Lincoln. “People are also more interested and really looking to employers when they have a savings plan, because it's really one of the most economical ways to save.”
Like many businesses, families are seeing differences in the way they spend and allocate assets in the pandemic era, Scanlon said.
“People have more time to think about their finances and there’s a lot of stress around the topic, which impacts productivity,” she said. “But there’s this quality of life imbalance that I think folks are seeing during the pandemic that you don't have to spend money on dry cleaning and you don't have to spend money on gas to commute. Those trade-offs that didn’t exist before mean you can start thinking differently about your savings and spending.”
The message financial planners are hearing, she said, is “let’s take advantage of where we’re spending less, so that we can save more.”
Consumers’ top three financial concerns, according to the survey, include emergency savings, inflation, and having enough for retirement. Probably not surprising responses during a pandemic and the current economic conditions.
Lincoln’s announcement about the survey included steps or resolutions consumers might want to make at the start of the New Year to secure their finances. They included a holistic approach to reviewing finances, preparing for the unexpected, and planning for the future.
“Some things haven’t changed,” Scanlon said. “If you try to bite off too much or overwhelm them with information, consumers will tune you out. The dialogue typically is, ‘What will I need for retirement? What are my monthly retirement needs?’ We start with a budget, does your plan have a match, and go from there. You want to make planning manageable and realistic without intimidation.”
Lincoln’s survey tracks well with others conducted by financial institutions and government agencies. Those studies also found consumers are paying far more at attention to their finances than they did before the pandemic and are approaching their savings and spending strategies differently.
“Consumers are especially interested in protection during times of financial uncertainty, which reinforces the need for financial planning,” Scanlon said.
Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].