A new survey finds that Americans are feeling better about their financial situation – though that may be dampening their enthusiasm for good financial resolutions.
According to Fidelity Investments’ eighth annual New Year Financial Resolutions Study, 45% say they are in a better financial situation this year – the highest level since the survey was launched, and compared with 39% a year ago. Looking forward, 70% predict they will be better off financially in 2017. Nearly 9 in 10 (87%) Millennials believe they will be better off financially in 2017, though there were concerns for what the future may hold.
Almost two-thirds (64%) want to save more for retirement in an IRA or 401(k), up considerably over the previous year (53%). Significantly, nearly half of all respondents plan to increase their retirement saving by one percent or more in the year ahead – and 61% of Millennials plan to do so.
Resolutes Better Off?
People who made financial resolutions at the start of 2016 are:
- More optimistic: 52% feel strongly they will be better off financially in 2017, while only 37% of those who didn’t strongly agree with this statement.
- More debt-free: 45% say they are less in debt this year compared to last year, compared with only about a third (34%) who feel that way in the other group.
- More financially secure: More than half (52%) say they are in a better financial situation this year than last. Only 42% of those who didn’t make resolutions feel the same way.
Of those who were successful in following through with their financial resolutions, 66% say they are now in a better financial situation.
The number of people planning to ring in the New Year with a financial resolution is holding steady for the second year in a row (36% in 2016 vs. 37% in 2015). The top picks among those considering a financial resolution are:
- Save more (50%, down from 54% a year ago)
- Pay down debt (28%, down from 32% in 2015)
- Spend less (16%, down from 19% last year)
For the second year in a row, “unexpected expenses” topped the list of financial concerns (65%, up slightly from 2015), although fears related to the economy followed closely behind at 62% – well ahead of the 53% citing that concern a year ago. Among those worried about the economy, 42% said they were most concerned about global or political instability, while 29% pointed to the economy’s overall strength.
Among those listing saving as one of their top financial resolutions for 2017, the majority (62%) plan to do so for long-term goals, while 32% plan to focus on the near term.
Among those who plan to focus on the short term, 72% want to put more into an emergency fund. This number is an increase over last year (60%) and a 20-percentage point jump from 2014 (52%).
Respondents identified the following as top motivators:
- Feeling encouraged by the progress you’ve made so far (75%)
- Being able to see the bottom-line benefit of sticking to a resolution over the year (69%)
- Breaking a goal into smaller, more attainable short-term goals (63%)
- Rewarding yourself when you reach your goal (63%)
Looking for additional information? Fidelity has published a new Viewpoints entitled “Three financial resolutions for 2017.” In addition, “Important money moves before year end” and “Six tax-saving tips to complete by year end” offer financial reality checks, with guidance on preparing for 2016 taxes and managing finances in the New Year. For those looking to improve retirement savings, Fidelity has introduced the Fidelity Retirement Score 63% – a credit-card-like score for retirement. In less than 60 seconds, anyone can see how they are doing against their estimated retirement needs and get ideas for improving the score. Fidelity customers can also obtain more information at the Fidelity Planning & Guidance Center.
For more information on Fidelity’s New Year Financial Resolutions Study, a factsheet and infographic can be found on Fidelity.com.