Even before the COVID-19 outbreak led to a spike in unemployment and declines in the stock market and broader economy, 33% of Americans were already within three missed paychecks of having to either borrow money or skip bills.

These are the first set of findings from the 2020 Planning & Progress Study, an annual research project commissioned by Northwestern Mutual that explores Americans' attitudes and behaviors toward money, financial decision-making, and broader issues impacting people's long-term financial security.

"Every American today is adjusting to a new normal, focused first on trying to stabilize the worlds around them," said Christian Mitchell, executive vice president & chief customer officer at Northwestern Mutual. "In addition to concerns about their families' health and safety, people are dealing with questions about job security, financial losses, and paying their bills."

From a financial perspective, the research shows people view cash and money market funds (45%) as their best defense against economic uncertainty and market volatility, with stocks, bonds and life insurance in a three-way tie for second (all at 18%). At the same time, nearly a third (31%) of people are unsure of what their best financial defense should be at a time of uncertainty and volatility.

"Some relief is coming in the form of government stimulus, but for most Americans this is a critical time to plan," said Mitchell. "That can be difficult when so many people are feeling distracted and isolated. At the same time, a crisis can also be the catalyst to motivate change."

Critical to plan
The research shows that 71% of Americans say their financial planning needs improvement. That said, there are some encouraging signs in the data about people's instincts to plan and the discipline they bring to it.

22% consider themselves "highly disciplined" planners – They know their exact goals, have developed specific plans to meet them, and rarely deviate from those plans

39% consider themselves "disciplined" planners – 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

29% consider themselves "informal" planners – They have a general sense of their goals and how to meet them, but they do not have a formal plan in place

10% are not planners and have not established any goals

There's also a sizable percentage who say they enjoy planning, and a plurality that see it as necessary even if it's not their favorite thing to do. That said, 3 in 10 Americans struggle with confronting their financial situation, and given the economic downturn it's reasonable to expect that number could go up. Specific numbers regarding how people feel about financial planning were as follows:

Excited and inspired. Love to do it! (29%)

Not my favorite thing in the world but know it needs to get done – like a medical check-up (37%)

Worried, nervous about confronting the financial details of my life (16%)

Prefer to not deal with it until I absolutely have no choice (6%)

Frustrated, annoyed with my financial situation (8%)

Skeptical about the value of planning (3%)

"Whether it comes from a sense of instinct or responsibility, most people recognize the importance of planning. Our message to people at this unprecedented time is simple: if you don't have a plan, it's time to work with an advisor that can help you create an actionable financial plan to meet your needs today and in the days ahead."

Benefits of getting professional help
The study shows that 29% of Americans work with an advisor and 65% do not.

Interestingly, when asked who people trust the most for financial advice, the #1 response was themselves (28%), followed by a financial advisor (24%) then a family member (13%). Meanwhile, 15% said they don't get financial advice from anyone.

"The human connection of an advisor in these most extraordinary times can help to lighten not just the financial anxiety but the emotional load, too," said Mitchell. "Long-term financial success is not garnered only by how you behave when things are good. It's about how you react when things aren't easy. It is times like the one we're all experiencing today that the value of a good advisor is perhaps most clear."