Why Financial Planning Books Aren’t Working

We have a big, big problem in the United States. People are not saving enough money, and as a result, they live life fearing how they’ll afford retirement and unforeseen financial crises. While it is true that since the financial crisis of 2008, many families have reduced their debt, the overwhelming majority of couples still has depleted savings and has done little or nothing to save for retirement. I’ve seen statistics and read articles that suggested as much as 40 percent of working Americans are not saving for retirement and 25 percent of American families have no savings at all. How could it possibly be that so many couples and households find themselves in this financial situation when hundreds of books have been written on the topics of financial planning and investing? Part of the problem lies in the fact that the traditional pathways to wealth are shrinking. For instance:
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Wants Often Masquerade as Needs 

If you ask people to stop and think about how a want is different from a need, they will probably be able to clearly distinguish one from the other. As concepts, people get that these two things are clearly different. The problem is that when people are living in a Spending Mindset day in and day out, they are not really conscious of this difference when it comes to making buying decisions. The line between wants and needs is blurred and, over time, everything that’s interesting or desirable around them looks like something they need to buy.
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What Couples in a Wealth Mindset Do Extremely Well 

Couples living in a Wealth Mindset do five things extremely well:

  1. Distinguishing needs from wants (food is a need; designer shoes are a want).
  2. Agreeing as a couple on what the needs and wants of the household are.
  3. Prioritizing spending based on what is needed, not what can be afforded.
  4. Separating real needs (food) from automatic purchasing decisions (for example, food is a real need; buying that food from a restaurant is not).
  5. Finding ways to fulfill needs in the most economical way possible (e.g., carpooling or buying a used Chevy rather than a new Lexus).

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