With many Americans experiencing financial setbacks in 2020, a sizable percentage is making financial resolutions for a better 2021. In fact, nearly 2 in 3 consumers — 65% — are closing out the year by setting financial goals, according to a recent survey by financial services company Fidelity.
For many, however, those goals won’t be particularly lofty, as consumers continue to focus on surviving the day-to-day financial toll brought on by the pandemic.
Saving money a top priority for 2021
Among those who are contemplating financial resolutions for the new year, the following goals were the most popular:
- Saving more money (44%)
- Paying down debt (43%)
- Spending less (30%)
Additionally, 1 in 6 respondents said that “recovering from financial losses due to the COVID-19 pandemic” is among their top financial goals for the new year. Half of workers have admitted to taking actions that were financially harmful this year — such as taking money out of their retirement accounts and depleting their emergency savings — due to challenges posed by the coronavirus pandemic.
Yet some consumers believe that 2021 may hold some of the same challenges widely experienced in 2020. Nearly 4 in 10 respondents — 38% — said they expect to be in “survival mode” next year, where they will be focused on covering day-to-day expenses and helping their families get through the next 12 months.
Older Americans feeling less optimistic
The survey found that the notion of spending 2021 in “survival mode” is more prevalent among older generations than younger ones. Specifically, 43% of baby boomers reported feeling this way compared with 42% of Generation X, 34% of millennials and 25% of Generation Z.
Women were also more likely to be focused on the day-to-day, with 42% expecting to be in “survival mode” next year compared with 34% of men.
When asked whether they think they will be better off financially in 2021 than 2020, millennials were most optimistic, with 79% saying “yes.” They were followed by 76% of Gen Xers, 73% of Gen Zers and 65% of boomers who felt that 2021 would be a better year as far as their finances are concerned. The lack of optimism among older Americans may reflect the fact that seniors have had a particularly tough time emotionally during the pandemic, as evidenced by a recent ValuePenguin survey.
Further reflecting their optimism, younger Americans were also more likely to make a resolution to better themselves financially in the new year. When asked whether they were creating financial resolutions for 2021, 79% of millennials said “yes,” followed by:
- 76% of Generation Z
- 67% of Generation X
- 51% of baby boomers
Making resolutions may, in fact, help some calm their fears. Of survey respondents, 56% said that doing so gives them “greater peace of mind.”
Methodology: Fidelity commissioned polling firm Engine Insights to survey 3,011 adults between Oct. 14-21, 2020. The age breakdown of the different generations is as follows: Baby boomers are ages 56-74; Gen X are ages 40-55; millennials are ages 24-39; and Gen Z are ages 18-23. The survey’s margin of error is plus or minus 1.79% at the 95% confidence level.