Half of Americans Don’t Have a Written Financial Plan—Here’s Why That’s a Problem

Almost half of Americans say they don’t have a financial plan, and many feel unable to meet their goals. Without a roadmap to managing money, saving for retirement, and weathering hardships, it’s difficult to envision a safe financial future.

According to Allianz Life’s 2025 Retirement study, 47% of Americans do not have a written financial plan. Moreover, only 70% feel confident that they can meet their financial goals, down from 83% in 2020. Poor financial planning is a major factor in that insecurity.

A written financial plan is more than just numbers in a notepad or spreadsheet. It can provide security and peace of mind. If you don’t have one yet, here are some tips to get started.

Why Many Americans Avoid Financial Planning

There’s a strong psychological aspect to financial planning, which is why many people avoid it. People sometimes don’t know how to get started, or worry about what a financial plan may reveal about their current situation.

“The most common emotional barrier I see is uncertainty,” says Jenny Giemza, CFP, CEPA, and Senior Vice President at Wealthspire Advisors. “When it comes to creating a written financial plan, many people simply don’t know where to start. They may be unsure about who to go to for help, what the process may cost, what questions to ask, or what’s necessary to complete the plan.”

Giemza adds, “Some may be afraid of the results of the financial plan.”

Having high debt, insufficient savings, or being unable to retire can scare people away from examining their finances. Many people feel safer avoiding the bad news.

Other people might hold off because they are perfectionists. They might be looking for the best budgeting app, the perfect retirement account, or the right time. Perfectionism often prevents people from getting started at all, even when it’s better to jump in without knowing every answer.

These are all very human feelings, Giemza says. However, they shouldn’t prevent you from starting a financial plan. While it may seem daunting, it will only help you in the long run by removing the issues that are preventing you from getting started in the first place.

“Acknowledging and addressing fears and emotions regarding [one’s] financial journey is essential to building a plan that feels both realistic and achievable,” says Giemza.

Importance of a Financial Plan

Generally, having a plan for anything in life can give you a sense of direction. The same goes for managing your money.

A financial plan takes a topic that may feel overwhelming and breaks it down into actionable steps. It shows you your current situation, what you’re working towards, and how to get there. This removes uncertainty, and the shift from guessing to action can be empowering.

Financial planning greatly helps with mental health as well, since financial stress is one of the leading causes of anxiety. When you create a framework for your finances, you’ll feel more in control, and that sense of control will give you greater agency in your decisions.

How to Create a Financial Plan

Set Your Goals

Any plan needs to start by defining what you’re working towards. Are you looking to pay off student debt, save for a home, boost retirement savings, or save up for a trip? Your goals will shape your plans, and you can break them down into short, medium, or long-term.

Short-term goals might include creating an emergency fund, medium-term ones could be saving for a trip, wedding, or downpayment for a house, and long-term goals can include retirement and saving for your kid’s college.

Know Your Cash Flow

Tracking your income and expenses will give you insight into what’s coming in and how it’s being used. You can use apps like Mint, YNAB, or a spreadsheet. The goal is to know what you earn and where your money is going, and if the latter aligns with your goals.

“The quality of a financial plan is only as strong as the accuracy of the information it’s built on,” Giemza says. “If you significantly understate or overstate your lifestyle and spending habits, the results of your financial plan may be misleading or inaccurate.”

Make a Budget

Making a budget is the best way to allocate your income. It doesn’t have to be limiting, just a plan for how you want to utilize your money. A common guide is the 50/30/20 rule: Spend 50% of income on needs, such as housing and food, 30% on wants, such as eating out and entertainment, and 20% on savings and debt repayment.

Tackle Debt

Debt is a drag on finances, especially if it has a high interest rate, such as credit card debt. List out all of your debts: credit cards, student loans, medical bills, etc., and implement a strategy to pay them down.

The two most common strategies are the snowball method and the avalanche method. The snowball method involves paying off the smallest debts first to generate momentum, and the avalanche method focuses on paying off the high-interest debt first to save money.

Build an Emergency Fund

An emergency fund can help when an unforeseen event strikes, such as a job layoff or a high medical bill. Having cash set aside allows you to address such scenarios without financial strain or taking on more debt, especially credit card debt with high interest rates.

Try putting aside at least three months’ worth of expenses. Of course, the more you can save, the better. It’s okay to start with one month’s expenses and build up from there. If you use part of your emergency fund, make it a priority to build it up again.

Save for Retirement

If you’re working, you’ll most likely have access to Social Security when you retire. However, Social Security can’t replace all of your income, so you’ll need extra savings in your non-working years.

Workplace retirement plans, like a 401(k), are a great place to start saving for retirement. If you can get matching contributions, they are essentially free money.

If you don’t have an employer-sponsored retirement plan, contribute to a traditional or Roth IRA instead. Automate your contributions if possible, as consistency and compounding interest can help your savings grow over time.

Set Up an Estate Plan

Have an estate plan ready, even if it’s just a will. This makes it easier for your heirs to receive your assets. Additionally, if you have beneficiaries, a life insurance policy can help with expenses in the event of your passing.

Review and Reassess

Since life is constantly changing, your financial plan shouldn’t be set in stone. Revisit your plan whenever important life events occur.

“We recommend that individuals should revisit their financial plan at least once a year to ensure they remain on track,” Giemza says. “If there are significant changes to their financial situation, such as a new job, major purchase, or unexpected expense, or if a major financial decision is on the horizon, it’s wise to revisit the plan even more frequently.”

The Bottom Line

Creating a financial plan may seem scary at first, but it’s a useful tool to bring clarity and control to your finances. You don’t need to figure it all out on day one. Rather, consider it a way to be honest about your circumstances and how to improve from there.

Whether you’re saving for an emergency fund, a down payment on a house, paying down debt, or simply trying to reduce your anxiety around money, putting your plan in writing can help you achieve your goals and bring them within reach.