Some New Year's resolutions come in the form of exercise, diet, hobby, or other personal-improvement changes. But unlike a crash diet, financial resolutions can be small and still make a big difference.
For the first time in the 14 years of the Fidelity Investments 2023 Financial Resolutions Study, people are prioritizing short term financial goals over long term goals.
Meredith Stoddard, life events experience lead for Fidelity Investments, said this is a sign of resilience among rising inflation and interest rates. Just over half of Americans are prioritizing short-term goals like credit card debt and emergency savings over long-term goals (47%), which would be equal to retirement and college savings.
The Denver region is equally reflected in national numbers, according to Stephen Austin, a Fidelity spokesman.
This survey aims to explore the attitudes around making a New Year's financial resolutions. The findings conclude that 2023 is likely to be a year of living sensibly when it comes to finances. More than a third of Americans say they are in worse financial shape than a year ago, but the top three goals this year, for most, are to save more money, pay down debt and spend less.
“People who make a resolution tend to have more optimism about being better off financially,” Stoddard said. “I think its really around the ability to control what you can control and take some steps to change things.”
There is a gap in optimism, it seems, between generations. While 81% of Gen Z'ers are likely to make a finical resolution, Boomers are only 51% likely to do the same. Additionally, more than “4 in 10 Boomers say they and their family are in worse shape than this time last year,” according to the report. Gen Z also reported the highest numbers in prioritizing mental health, with 74% considering a mental health resolution.
“I think then hypothesis on that one is that a lot of Boomers are either on a fixed income, and so inflation is taking a much bigger hit,” Stoddard said. “The other one is that a lot of them have much bigger 401(K) balances, for those who have retirement balances, and so watching that drop is terrifying if its your entire nest egg where as if you’re in your 20’s and just starting out [it’s a non-issue].”
Stoddard said that for younger people trying to start seriously saving money it can be overwhelming. She recommends progress over perfection — putting away $25 a month in a savings account or investing in a 401(K) is a place to start.
“It’s okay to step into the realm of money and finances even if you don’t feel like you know everything,” Stoddard said.
Overall, 58% of people feel that they have a positive relationship with money, but women are slightly more likely than men to say their relationship with money is stressful — 36% versus 26% to be exact. Eight in 10 Americans report that they have a plan in place to deal with the unexpected.
For those who wish to stick to their goals, consider finding a financial advisor. About 80% of people were able to stick with their resolutions when working with a financial advisor, versus about 55% who did not.
The survey was conducted among 3,020 adults, 18 years of age and older.
