Here's the Shockingly Small Amount of Time Americans Spend on Financial Planning

Americans spend an average of just 1.8 minutes per day on financial planning and management. That's according to recent financial planning research from The Motley Fool Ascent, but there's also a caveat worth mentioning.

The vast majority (97%) of Americans spend no time on money management on any given day. As you can imagine, that drags down the average quite a bit. The remaining 3% of Americans spend an average of 54 minutes per day managing their money.

The immediate reaction may be that 3% of Americans are doing well and 97% are making a huge mistake. It's not quite so cut and dry. While managing your finances is important, it's also an area where more isn't always better.

Financial planning has its benefits -- and many Americans are missing out

When it comes to personal finance, it's good to have a plan. Planners tend to do better with money than non-planners. They're more likely to save at least 10% of their income, according to research by Hearts and Wallets. And in Schwab's 2021 Modern Wealth Survey, it found that Americans with a financial plan were more likely to:

• Have a three-month emergency fund: 65% of planners compared to 33% of non-planners
• Feel financially stable: 65% of planners compared to 40% of non-planners
• Never carry a credit card balance: 47% of planners compared to 29% of non-planners

Unfortunately, many Americans (but not 97%) do fall short in terms of financial planning. Only 46% do it regularly. Another 30% said they make financial plans before large purchases or investments, and 24% only do it when they have unexpected expenses or a loss of income.

That's not ideal. Financial planning is something you should do regularly to prepare for the future and figure out how to make the most of your money. If you only do it because you want to buy something expensive or because you're going through money troubles, you're missing out on many of the benefits of having a plan.

So, if you don't have a financial plan yet, set aside time to make one. It doesn't need to be complex. A financial plan just involves setting your money goals and deciding how you're going to use your money to reach those goals. For example, if you want to retire early at age 50, part of your financial plan could be to invest 25% to 30% of your income.

You don't need to spend a lot of time on your finances

Financial planning and management should be a part of your routine, but they don't need to be a part of your daily routine.

There's no benefit to spending time every day on financial management. Your financial plan isn't going to change that often. You should absolutely review your financial plan on a regular basis. But doing this once a month is better than doing it once a day. This gives you time to see how it's working and decide if you want to make adjustments.

Managing your money also shouldn't be an everyday activity. If you're constantly making payments on credit cards or transferring money between bank accounts, it may be a sign you're juggling too many accounts. Or, that you should set up automatic payments and transfers. You'll free up some time for yourself, and you won't need to worry about keeping track of everything.