While close to nine in 10 American households are engaged in some type of formal or informal financial planning, the extent of this planning varies greatly, according to new research from the Consumer Federation of America and Certified Financial Planner Board of Standards.

The research showed that only one in five household decision-makers (19%) was a comprehensive planner who takes a methodical approach to financial planning, while one in 10 (10%) did virtually no financial planning at all.

The research further identified nearly two-fifths of households (38%) as basic planners and one-third of households (33%) as limited planners.  

According to the CFA and the CFP Board, one of the most compelling findings was that the more extensively households plan, the better prepared they are financially in terms of their likelihood of saving, investing and managing credit card debt.

While higher-income households were more likely than lower-income households to plan, more than half (54%) of comprehensive planners have annual incomes below $100,000.

With assistance from Princeton Survey Research Associates International, the CFA and CFP Board said from April 12 to 24, it surveyed a representative sample of 1,002 financial decision- makers nationwide.

“Those families with the lowest incomes are the ones who would benefit the most from financial planning,” noted Stephen Brobeck, CFA's executive director. “Households with the fewest financial resources benefit the most from carefully planning spending, saving, and debt management.”

The analysis identified four distinct financial planning profiles that include all American households:

• Comprehensive Planners (19%): All members of this group have a comprehensive financial plan that goes beyond a simple household budget to cover things like retirement savings and insurance. 
• Basic Planners (38%): The large majority of basic planners (80%) have a plan for one or more specific savings goals, though only 35% have a comprehensive plan that organizes these plans, with another 31% saying they are likely to make a plan in the coming year. 
• Limited Planners (33%): A large majority of limited planners (69%) either have a household budget or a plan to address at least one individual savings goal – typically for retirement savings – but not both. 
• Non-Planners (10%): This group does virtually no financial planning. Nine in 10 (92%) say they have no plan for any specific savings goal, and virtually none (99%) think they will create a comprehensive financial plan in the next year.