Most Americans considering a financial resolution for 2024
Faced with stress over personal finances, two-thirds of American surveyed say they are planning New Year’s resolutions to conquer their financial goals and gear up for a year of “new chapters” and “living practically.”
According to Fidelity Investments’ 2024 New Year’s Financial Resolutions study, which has been conducted for the past 15 years, more than half (54%) of respondents admit to feeling overwhelmed by their personal finances and 31% said that they have a stressful relationship with money.
More than 2 in 5 adults who experienced financial setbacks admit to dipping into their emergency savings, while 40% of all respondents anticipate continued financial struggles in the year ahead because of a higher cost of living.
But there is good news, the survey pointed out: 70% of Americans claim they have a plan for reaching their financial goals, paving the way for a steady and secure 2024. Women are leading the way: 83% agree that having a plan in place will help them better handle the unexpected, compared to 78% of men. Younger respondents continue to express the most confidence, with more than 3 in 4 claiming that they’ll be better off financially in 2024.
“With the number of Americans tapping into their emergency savings after a year of financial stressors and setbacks, it’s not surprising to see them look forward to new, brighter chapters in 2024,” said Kelly Lannan, senior vice president of Emerging Customers at Fidelity Investments. “Encouragingly, it’s great to see so many taking a practical and confident outlook for the year ahead, while they navigate choppy financial waters and fine-tune their financial wellness habits and savings goals.”
Thinking differently in 2024
Of the respondents who are planning a financial resolution for the year ahead, 92% are thinking differently given the events of the last couple of years. One-third are planning to make their finances more of a priority and 38% are considering more conservative goals. These findings are similar to trends seen in other Fidelity data, including an increase in customers completing plans – totaling 6.6 million to date. Even with the majority of respondents committed to thinking differently, the top resolutions remain consistent with those of years past: Save more money (41%), pay down debt (38%), and spend less money (30%).
In a slight change from the 2023 study, more Americans are looking to prioritize long-term savings goals (52% vs 48%) for 2024, compared to short-term goals (47% vs 53%) for 2023 as part of their New Year’s resolution. Notably, savings priorities differ across age, race, and gender identity, with more women (54%), Baby Boomers (57%) and Hispanic (51%) respondents still prioritizing short-term savings.
As inflation lingers and concerns about the global economy remain, 45% of respondents and 51% of young respondents who experienced financial setbacks said that they had to dip into their emergency fund. With 3 in 4 Americans worrying about cost-of-living increases having an impact on their budget, it’s encouraging to see that most respondents (81%) say they plan to build up their emergency savings next year, the survey said.
Helping clients set achievable resolutions
So, as consumers get ready to work on their financial resolutions for 2024, what advice should advisors give to their clients to help them make their resolutions achievable? David Appel, with Appel Insurance Advisors, LLC, offered the following suggestions:
Resolutions need to remain visible, and if you need to, find someone (friend, family member, or professional) to hold you accountable for your resolutions, maybe for all of them or different people for different resolutions.
Do your own research. Don’t rely solely on family or friends for financial advice or insurance-related decisions. They may have had bad experiences with agents and/or investment advisors and steered away from that type of planning. “Do not let them influence you. Be your own person when it comes to these very important life decisions,” Appel said.
Don’t bite off more than you can chew. For instance, if you are designing a life insurance portfolio, come up with a plan that gives you the amount of coverage you need first, and make sure that can go into place. Once that is finalized, look at cash flow and see how much permanent life insurance versus term life insurance is the right amount, based on your personal cash flow. Again, make sure the total life insurance amount is there, since that is the most important part for your family.
Find a strong team of advisors who collaborate with one another–a CPA, an estate attorney, insurance professionals (both on the life insurance side and the P&C side), and a strong, holistic, investment-advisory firm.
“Have a few far-reaching financial resolutions,” Appel added, “but make sure there are a handful of goals/resolutions that you know you can achieve with some effort. Do not make them so easy but make some of them achievable so that you can feel like a winner when you accomplish them.”
The Fidelity study presents the findings of a national online survey, consisting of 3,002 adults, 18 years of age and older. Interviewing for this CARAVAN Survey was conducted October 20-29, 2023, by Big Village, which is not affiliated with Fidelity Investments.
Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at amseka@INNfeedback.com.
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