Are You a Financial Doer or Dreamer?

Moneyland details a TD Ameritrade survey that separates financial doers from financial dreamers. The survey identified eight sound money practices with "doers" engaging in at least five of the behaviors while "dreamers" engage in just four or fewer. Their list:

• Act more like a saver than a spender
• Live within your means
• Automatically deposit money into savings each month
• Stick to a budget
• Track household expenses
• Pay off credit card debt in a timely way
• Regularly contribute to a 401(k)
• Have contributed to an IRA

I'll comment on these in a minute, but for now let's look at how they came to their conclusions:

In the survey, those who engaged in at least five of these practices – the doers – expressed far greater confidence in their financial future; 80% said they expect to reach their retirement goals vs. just 59% of dreamers with similar expectations. The starkest dividing line: 78% of doers identified themselves as savers vs. just 33% of dreamers who did the same.

Here's how I stack up on the eight:

• Saver over spender: What do you think after looking at my finances?


• Live within means: Yep, been doing this forever.


• Automatically deposit money into savings: My paycheck automatically goes into my checking account, then to Vanguard where it is invested.


• Having a budget: We had budgets for many years, but don't have an "official" one now. Our spending is so under control (and we're fairly frugal) that we don't really need one. That said, I do track spending via Quicken to make sure we stay within historical limits. ;-)


• Track household expenses: Yes. See above.


• Pay off credit card debt in a timely way: Better than that -- I have never had credit card debt. In fact, I haven't had any debt for about 15 years now.


• Regularly contribute to a 401(k): Each month part of my paycheck has gone into my 401k. I've contributed the maximum to it for almost 20 years now.


• Have contributed to an IRA: I have in the past, but now invest in either my 401k or a taxable account at Vanguard.

So if you don't count the budget item (which you could if you wanted), I score seven of eight.

How about you? I'm guessing many FMF readers do pretty well on these measures. Where do you stack up on this list?

Comments

[Lurker Carl]

7 out of 8.

We don't follow a budget. We have been thrifty for so many years that our spending behavior is frugal automatically. It wouldn't be hard to write up a budget and follow it, we just don't need to.

[Luis]

I'd say you are indeed a saver....and a giver too. If you had just flat out spend 65% of your takehome then you'd probably have been borderline! :)

[Jonathan]

We're savers, live within our means, pay off CCs each month, and contribute to IRAs. We don't have a budget or track expenses, automatically transfer money to savings (rather, all money is stored in checking accounts until eventually invested), nor contribute to a 401k as neither of our employers offer them. So 4 of 8.

I'm not really sure how this list correlates to "doers vs. dreamers" or even what those terms exactly mean in this context. I would say a financial "doer" is someone who actively takes steps toward securing their financial future, and we definitely fall into that category.

[Matt]

Doer.

There are two that I could do better on. Budget and automatic tranfer but I am pleased with my progress

[Nashville]

•Act more like a saver than a spender
My wife and I do this.
•Live within your means.
We do this too.
•Automatically deposit money into savings each month.
We automatically deposit money into our checking account each month which acts like our savings account.
•Stick to a budget.
We don't do this and really never had. I would feel oh so restricted/confined if I thought I had to follow a strict budget. Luckily, we have not needed to do this.
•Track household expenses.
See above. But I must add that I monitor our net worth religiously and know immediately if adjustmnents are needed.
•Pay off credit card debt in a timely way.
Always.
•Regularly contribute to a 401(k.
I have contributed the max every year for many years even though my employer hasn't matched for last 3 - 4 years.
•Have contributed to an IRA.
We do this indirectly. I had opportunity to move a portion of my 401(k) a couple of years ago into a separate IRA. I moved some into an IRA then but we don't contribute to it. Roughly 20% of our net worth (not incl house) is in IRAs.

[retirebyforty]

I'm 6 out of 8.
I don't auto-deposit money into saving. I actively manage this and move money manually into saving and investing accounts.

stick to budget - I'm bad at budgeting and don't really stick to it all that much.

I think we are doing pretty well in general.

[Old Limey]

We have been retired for over 19 years and rather than putting money into our IRAs we now have to take mandatory distributions every year.

We don't budget at all - we're on auto pilot. We started a pattern of living within our means more than 55 years ago so that it's now automatic. It goes without saying that we have no debt and pay off our cash reward CCs in full every month.

It's hard for young people to believe that this year our income from all sources was 5.65 times what it was when we retired and the amount we plough back into our investment portfolio increases steadily every year without denying ourselves anything that either of us need. At 77 and 78, we like life's simple pleasures and don't lead the kind of lifestyle that the business world wishes we did. The only major purchases we make are when something needs replacing. We made our last overseas trip in 2010 since my wife's mobility over cobble streets and up and down steep steps and trails isn't what it used to be, plus we had also run out of destinations that we had any desire to visit - cruises on gigantic ocean liners have never had the slightest appeal to us.

[billyjobob]

Yep... I do all of these. Like others I do not have a real budget. I save plenty and am frugal enough. If I made a budget, I'd probably have to go out and spend more just to keep my numbers up a little. ;-)