The more discipline an individual brings to their finances, the more financially secure he or she feels in the present, and the greater likelihood they’ll be happy in the future, according to a new study.

The study, by Northwestern Mutual, also explores who the most disciplined planners are among American adults, and finds they come from opposite ends of the age spectrum (18-39 and 60+). Meanwhile, young Baby Boomers (aged 50-59) seem particularly disinterested in planning even though they acknowledge a strong need to improving their saving and investing discipline.

The study found that 70 percent of “highly disciplined planners” feel “very financially secure” compared to 51 percent of “disciplined planners,” 34 percent of “informal planners” and 17 percent of “non-planners.” Highly disciplined planners who are retired are much more likely than non-planners to say that they are ‘happy in retirement’ (91 percent compared to 63 percent).

“Happiness can’t be bought, of course, but it can be planned for,” said Northwestern Mutual executive vice president Greg Oberland in a statement. “The links between discipline, financial security and happiness are quite distinct. There’s some powerful evidence to suggest that the small steps you take today can make a real difference tomorrow.”

Oberland noted that the overall level of discipline that Americans bring to their finances remains low. According to the study, less than one in five U.S. adults (18 percent) consider themselves a highly disciplined financial planner; that is, they know their exact goals, have developed specific plans to meet them, and rarely deviate from those plans.

Over one-third (36 percent) consider themselves disciplined; that is, they know their exact goals and have developed specific plans to meet them, but those plans can deviate at times because they don’t always stay on top of them.

Nearly half of adults (46 percent) are either informal planners or don’t do any planning at all.
In addition, 60 percent of all respondents in the study believe their financial planning could use improvement; and the number one roadblock, cited by more than one in four (27 percent), is lack of time.

Younger adults (18-39) and more senior adults (60+) represent the most disciplined financial planners in the U.S. Meanwhile, adults who fall between the ages 40 and 59 are the most financially unprepared and most likely to identify themselves as informal or non-planners.  The study also found that 59 percent of younger adults (18-39) and 54 percent of more senior adults (60+) identify themselves as disciplined financial planners, while less than half of adults aged 40-50 believe they are disciplined.

More than half (51 percent) of adults aged 40-59 identify themselves as informal or non-planners, while that number drops to 41 percent in younger adults (18-39) and 46 percent in senior adults (60+)

“It’s interesting to see the differences in discipline among age groups, and whether they signal a pronounced shift in attitudes toward financial security in America,” said Oberland. “It’s worth noting that both young adults and seniors have experienced tough economic cycles during formative periods of their financial lives. Regardless of the explanation, we see the return to realistic expectations, prudent decision making and disciplined patience as a very positive trend.”

The study found that 60 percent of the youngest Baby Boomers (50-59) acknowledged the need to improve their savings and investing discipline, yet they have the least appetite for doing so.

To explain the reason for that finding, Oberland said that for 25 percent of Americans aged 50-59, the biggest barrier is simply a lack of interest (25 percent), while 13 percent cite lack of money. 

Among these younger Boomers, 70 percent don’t use a financial advisor, 40 percent said they take an “informal” approach to financial planning, and 12 percent said they wouldn’t call themselves planners at all—the highest percentage of any age bracket surveyed

“Becoming financially disciplined is often a matter of priorities,” said Oberland. “We work with young Boomers all the time, helping them juggle what can sometimes feel like financial overload. That’s why the most critical piece is to address the issues head on rather than putting one’s head in the sand.”