(BPT) - While preparing to ring in the new year, many Americans make resolutions about their finances. Unfortunately, some are feeling less optimistic about the year ahead, according to Fidelity Investments' 2023 New Year’s Financial Resolutions Study. Over one-third say they're in worse financial shape than last year, and only 65% believe they'll be better off in 2023. The good news? About half say they're ready to "live sensibly" or "plan ahead," making practical financial resolutions focusing on balancing short-term and long-term goals. Two-thirds of the survey respondents (66%) are considering a financial resolution for 2023.
What financial resolutions are Americans making?
Of those planning a financial New Year's resolution, 94% say they're approaching it differently, given the events of the last couple of years, focusing on practicality — with nearly half (45%) considering more conservative goals for the year ahead.
The top financial resolutions are:
1. Save more money (39%)
2. Pay down debt (32%)
3. Spend less money (28%)
For the first time in the study's 14-year history, more Americans resolve to save for short-term goals rather than long-term goals. Next generation savers (ages 18-35) are evenly split, with 50% saving for the short-term and 50% taking a longer view. Among those making financial resolutions, the top motivations are "achieving greater peace of mind" and "living a debt-free life."
Inflation was cited as the top financial setback experienced in 2022, and its impact is expected to continue. In fact, respondents ranked it their top financial concern for 2023.
Among those experiencing a financial setback in the past year, 44% had to dip into their emergency fund. Millennials led the way in this regard, with more than half (55%) reporting being forced to take this action. Additionally, 4 out of 10 (43%) Baby Boomers say they and their family are in worse shape financially compared to last year, possibly in part due to declining retirement balances.
Positive practices in a season of living sensibly
While 2022 presented challenges, the study also reveals encouraging news: More people express having a positive relationship with money. When asked to describe their expectations for 2023, 29% describe their outlook for next year as "the year of living sensibly." Encouragingly, nearly half (49%) expect to maintain savings habits developed during the pandemic, and a similar number (46%) plan to get more involved in charitable giving in 2023.
"Even if your focus is on immediate needs, long-term goals and objectives are what keep us going — and planning can help," said Stacey Watson, senior vice president of Life Event Planning, Fidelity Investments. "Taking charge of your financial situation is a great way to help you feel a sense of control, even when external forces bring challenges. Saving more and paying down debt, even small amounts, can have a tremendous impact on a household's financial and emotional well-being."
Sticking with resolutions
How can Americans resolve to build a stronger financial future in the new year? To start, those in better financial shape this year reported saving more, budgeting better and/or working more hours. In fact, over 80% of Americans say having a plan can help them deal with the unexpected. Making resolutions is a great way to start the year on the right foot — and this simple act can have a positive impact on your attitude and your finances.
Get help planning and reaching financial goals
Want to plan and set achievable financial resolutions? Help is just a click away. Fidelity's online resource, Life Events hub, was created to help anyone, Fidelity customer or not, plan for and manage life’s significant moments. You can find checklists and resources for situations including job changes, caring for loved ones, divorce and navigating the college journey.
No matter what your focus — building emergency savings, paying down debt, managing spending or saving for retirement — Fidelity can help you create a free, flexible plan for whatever matters most to you at Fidelity.com/freeplan. In January during Financial Wellness month, the company offers 31 days of educational events, financial tips and interactive tools to inspire you to kick off the new year with a renewed focus on finances.
Representatives are available at no cost to answer questions 24/7 at 1-800-FIDELITY, or online at Fidelity.com.
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