Nearly two-thirds of employees say holiday spending puts some level of stress on their personal financial situation, according to The Principal Financial Well-Being Index: American Workers survey.
Men fare better than women, with 40% saying the holidays put no stress on their financial situation, compared with only 30% of women. Men are also more likely than women to say they’re happy with their overall financial situation (46% vs. 32%).
Dining out (24%), food/groceries (19%) and entertainment (15%) are top areas that employees indicate they blew their budget in 2015.
Gen Y (34%) and Gen X (25%) employees are more likely than Baby Boomer employees (14%) to say they blew their budget on dining out. Gen X (27%) and Baby Boomer (47%) employees are more likely than Gen Y (16%) employees to say they did not blow their budget in 2015.
This year, half (52%) planned to set a budget for holiday gifts, and 85% of those who set a budget said they are likely to stick to it.
The top New Year’s resolution, at 31%: putting money into a savings account each month, up from 24% a year ago. The top money management priorities are paying down debt (28%), saving for retirement (25%) and building a savings account for emergencies (15%).
New Year’s Resolute?
Looking past the holidays, Fidelity Investments’ seventh annual New Year Financial Resolutions Study finds that the number of Americans ringing in the New Year by making financial resolutions is on the rise, with 37% considering one, compared with 31% in 2015.
Echoing the findings of the Principal survey, the top three financial resolutions for 2016 are:
- saving more (54%);
- spending less (19%); and
- paying off debt (16%).
For those identifying saving as a top priority, nearly two-thirds (63%) preferred to set aside money for long-term goals (such as college, retirement, and health care), up from 57% in 2014. Among the 32% saving for short-term goals, 6 out of 10 said they would use their savings to build up an emergency fund, up from 52% in 2014.
Three key concerns are weighing on the minds of Americans as the New Year approaches. “Unexpected expenses” tops the list at 62%, followed by “the economy” (53%), but “health care costs in retirement” follows closely behind at 47%.
For those saving more for long-term goals, an all-time high of 41% cited saving for retiree health care costs as an important focus.
Can making financial resolutions actually improve your economic outlook? Looking strictly at those who nearly or completely achieved their 2015 resolution, 56% said they were in a better financial situation this year, compared with 34% of those who didn’t come as close to achieving their resolution, while 51% said they were less in debt, compared with 40% who didn’t stick with their resolution last year.
