Three in Four say they’ll be better off financially in 2019. Will you be among them?
Yep. It’s that time of year again. Out with the old in with the new…New Year’s resolutions that is.
For the tenth year in a row, saving more money (a median of $200 a month) tops the list of the most popular financial resolutions people plan to make in 2019, followed by paying down debt and spending less money, according to the Fidelity Investments’ 10th Annual New Year Financial Resolutions Study.
Four in ten (42%) say they’re currently in a better financial situation than last year and 75% predict they’ll be better off financially in 2019. Those who say they’re better off financially this year compared to last credit strong money habits. In addition to reporting that they or someone in their family is saving more money or received a new job or promotion, more than half (53%) mentioned that they have created a financial budget and 44% say they reduced debt.
Making New Year’s resolutions are a popular pastime, yet how well do we follow through on keeping them? Research published back in March 2002 cited in this 2017 Psychology Today article has some general findings to help frame answers to that question.
Researchers followed 200 people over two years who made New Year’s resolutions. Seventy-seven percent kept their resolutions for a week. At one month, 64% reported success, but that fell to 50% after three months and 46% after six months. Only 19% “deemed” themselves successful in reaching their goals when researchers followed up two years later.
But there’s some evidence that making a resolution can have positive, long-lasting effects despite what the general success rate shows. For example, the researchers from the University of Scranton who conducted the studies above, also found that those who made resolutions were 10 times more likely to make a positive change after six months compared to people who wanted to change but did not make a New Year’s resolution.
On the financial front, sticking with a financial resolution can, indeed, pay off. Of the 27% of people who told Fidelity that they made a financial resolution in 2018, 74% of them stuck with it. The result: Of those who were successful at keeping their financial resolution, 54% also said they were in a better financial situation than last year, compared to 28% of those who didn’t. And, 43% said they were less in debt, compared to 19% who didn’t make as much progress.
If you’re going to commit to a financial resolution in 2019 there are some common mistakes to avoid. The Fidelity study notes that 58% of respondents confessed to making at least one of the following mistakes in 2018:
- dined out too much (28%);
- splurged on something they really couldn’t afford (19%);
- neglected to return or exchange unwanted purchases (18%);
- continued to pay for unused subscriptions like apps, subscription retail boxes, or media streaming services (18%);
- paid too much in fees like ATM, financial account or transaction fees, credit cards or late payments (18%); and
- took a vacation they really couldn’t afford (5%).
Beyond money, 94% of the more than 2,000 people surveyed by Fidelity say they plan to engage in at least one self-care activity – with 78% saying they plan on spending time with those they love. We think that’s a resolution for the ages!
Let’s connect soon. Markets have shifted, perhaps your financial objectives have evolved since we last spoke, or you would like a brief checkup on your financial health. Call us and let’s make this the best year yet!
