Anxious Americans feel the need to choose — financially speaking, that is.
According to a new survey by diversified financial services provider Thrivent, concerns about the economy and rising levels of personal debt have an increasing number of Americans feeling pressured to prioritize their financial needs.
Most notably, Thrivent’s 2023 Financial Crossroads Survey found 53% of respondents would take a job working harder and longer hours to make and save more rather than making less money, but having more free time to do what they love (47%). The study also showed that 56% of respondents would save money for their children’s college over saving for their own retirement (44%).
Additional trade-offs showed that 73% of Americans would invest bonus money for the future over splurging on a vacation (27%). And 75% would save for their own retirement over funding their parents’ extended care (25%).
When it comes to their personal liabilities, the report said 42% of Americans would choose to pay off their debt if they received an unexpected large sum of money, far outweighing the other choices presented to them, like investing for the future (22%), making home improvements (6%), traveling and experiences (5%) or donating to a charity (3%).
When it comes to choices related to his clients’ financial futures, Andrew Fincher, financial advisor with VLP Financial Advisors, says he categorizes goals into “needs, wants, and wishes.”
“The needs are nonnegotiables, such as retirement monthly expenses, medical, recurring future car purchases and so on. From there we work over to vacations, paying for education or weddings and that type of expense, and then we work to legacy in wishes. If there’s a shortfall we cut from the wishes first and work our way over,” Fincher said.
Likewise, Steve Oniya, president of OM Investments, said whatever is important or a need to the client is up to them. His role is to help “clarify their values and goals, as well as provide efficient evidence-proven methods through our deep relationship to help them achieve those goals.”
“Many people expect this period of financial uncertainty to continue, and their fears could be getting in the way of making financial decisions that reflect their intention and values,” Loren Hansen, vice president of Thrivent Advisor Groups, said in a statement.
“Increasingly, we’re seeing a need for purpose-based financial advice that helps people manage their money in the present and allows them to consistently connect those decisions to their main purpose and guiding values,” Hansen added.
Along those lines, the survey found respondents would prefer to bring financial decisions closer to their values if they could. In fact, 65% of those surveyed said their values are important to them when making financial decisions, yet 71% feel as if their decisions only sometimes or rarely align with their values.
Breaking it down further, Americans regard their family (76%), health and well-being (57%) and financial stability (39%) as their top three values, the study showed.
“Everyone wants to be able to retire comfortably, but to some that might include certain funds put away for dream vacations. For others, the goal is leaving a legacy either as a bequest to children or to help fund charities important to them. Whatever it is that inspires clients, we start there and then work backwards to determine how we can help them get there,” Fincher said.
OM Investments’ Oniya says he relies on open-ended questions to drill down on a client’s values.
“A few classic examples are: ‘what’s on your mind that keeps you up at night?’ ‘Why is money important to you?’ And even direct questions like ‘What do you value’ or ‘What are your family values?’” Oniya said. “Open-ended questions, like these among others, help us set up a financial plan that we both can agree upon and understand as we navigate life’s journey with our own values compass.”
Similarly, Steve Stanganelli, certified financial planner with Clear View Wealth Advisors, has clients inventory their values and concerns in a questionnaire, then he sits down for a wide-ranging and honest conversation.
“In some ways, these conversations may highlight their investment values and may point to some kind of ESG investing approach. If that’s the case, then I’ll be able to model in their financial plan the impact of ESG investing versus using standard investing approaches. Then they can put their money where their values are or not,” Stanganelli said.
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