At the start of 2014, you've probably made promises to yourself or family or friends about doing things better than last year—and that includes making better financial decisions.
The way that you handle your money has a huge impact on your life and can have a lasting effect on your family's life as well. But many Americans are not planning for their financial future.
You may need help in navigating your financial life. It can be a challenging journey. You are not alone if you are unsure where to start or what your next move should be. Nearly a third of U.S. adults admit their lack of knowledge has led to poor financial decisions and more than 40 percent acknowledge they've missed out on good financial opportunities as a result, according to a Harris Interactive survey.
About 19 percent of Americans spend more money than they make and slightly more than a third are just breaking even, leaving little or no money for savings, according to a study by the Financial Industry Regulatory Authority's Investor Education Foundation. Only 41 percent of the 25,000 people surveyed said they spend less than their income.
Making matters worse, many people lack a cushion against unexpected money shocks. More than half do not have an emergency savings fund. In the U.S., 56 percent of individuals lack a rainy day fund to cover expenses for three months in case of sickness, job loss or other emergencies, according to a FINRA study. Without such a fund, many people lack adequate protection against financial emergencies or other shocks that threaten their financial stability.
Although you can't predict the future, you can protect yourself by making smart decisions about your money today. When it comes to dollars and cents, just as with diet and exercise, the chances of coming up with a strategy and goals that you'll actually stick to increase significantly when you take time to create a financial plan.