Shifting Goals in the Face of Financial Pressures
A recent report by Fidelity Investments reveals that a significant majority of Americans planning financial resolutions for 2024 are adjusting their goals due to ongoing financial pressures. The “2024 New Year’s Resolutions” study, released by Fidelity on Thursday, indicates that 92% of those planning financial resolutions are altering their objectives based on the economic conditions experienced in recent years.
Top Concerns Driving Adjustments
Among the top concerns influencing these adjustments, inflation takes the lead, with 40% expressing worry about the impact of high prices on day-to-day expenses. Unexpected expenses rank as the second-highest concern at 37%, followed by economic uncertainty at 33%, and insufficient savings in an emergency fund at 25%.
Inflation’s Ongoing Impact
The Labor Department’s consumer price index, reflecting a 3.2% annual increase in prices in October, underscores the persistent impact of inflation. While the rate has reduced from its peak of 9.1% in July 2022, the cumulative effect over the past few years has resulted in a staggering 17.62% increase in prices compared to January 2021.
Financial Strain and Coping Mechanisms
The high cost of living has intensified financial strain on households, leading more Americans to dip into savings or resort to credit cards for everyday expenses. Over half (54%) of respondents feel overwhelmed by personal finances, with 31% admitting to a stressful relationship with money. Financial setbacks in 2023 prompted 2-in-5 respondents to tap into emergency savings, and 40% anticipate continued financial challenges in 2024.
Optimism Amidst Challenges
Despite the challenges, the report highlights a practical and confident outlook among respondents as they navigate financial uncertainties. Kelly Lannan, Senior Vice President of Emerging Customers at Fidelity Investments, notes the resilience of Americans facing financial stressors and setbacks while expressing optimism for new and brighter chapters in 2024.
Common Resolutions Mirror Past Trends
The most common financial resolutions for 2024 align with trends observed over the past 15 years. Saving more money tops the list at 41%, followed by paying down debt (38%) and spending less money (30%).
In the ever-evolving economic landscape, Americans are adapting their financial goals to address immediate concerns while maintaining a commitment to long-standing resolutions centered around saving, debt management, and frugal spending.
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