In the wake of navigating through inflation and escalating prices, Americans are expressing increased optimism about their financial prospects in 2024, prompting a surge in financial resolution-setting, as revealed by a recent survey conducted by Edward Jones. The survey found that approximately 80% of Americans established at least one financial resolution for 2024. Notably, only 22% managed to adhere to financial resolutions throughout 2023.
Leading the pack among financial objectives for 2024 is the aspiration to boost income, cited by 17% of respondents. Building savings closely follows, with 16% expressing this goal, while 15% aim to eliminate credit card debt during the year.
Findings in the Survey:
The survey also identified the predominant challenge hindering the realization of these financial goals, with 61% of Americans pointing to lingering high inflation. Despite recent indicators of moderation, concerns persist about achieving the Federal Reserve’s 2% inflation target. November’s Consumer Price Index (CPI) showed a year-over-year increase of 3.1%, slightly down from 3.2% in the previous period. Additionally, 35% of respondents expressed apprehension about unexpected financial strains, while an equal percentage cited potential disruptions due to changes in economic markets.
To mitigate economic concerns, individuals are advised to consider reducing high-interest debt through personal loans featuring lower interest rates. The moderation in inflation has contributed to increased spending power for middle-income households, as revealed by Primerica’s Household Budget Index (HBI). The index reported a rise in the purchasing power of middle-income households (earning between $30,000 and $130,000) from 99.1% in October to 100.5% in November 2023, compared to 93.7% a year earlier.
Is it a Positive Shift?
Despite this positive shift, middle-income households have grappled with cumulative budget deficits of nearly $2,500 due to heightened costs of essential items since 2021. Concurrently, Americans face a record amount of credit debt, totaling $1.08 trillion, following a collective increase of $48 billion in the third quarter of 2023, according to a report from the Federal Reserve Bank of New York.
2024 financial resolutions to consider
Economic adviser Amy Crews Cutts from Primerica highlighted the complexities, acknowledging the HBI’s return to the baseline value as a positive outcome but noting that the impact of the pandemic has left middle-income households with less savings and an increased burden of credit card debt, a scenario diverging from a hypothetical situation without the pandemic.
Approximately 80% of respondents have set financial resolutions, contrasting with the 22% who sustained such financial resolutions in 2023. The top financial priority for 17% is income growth, followed by 16% aiming to build savings, and 15% intending to clear credit card debt. Lingering high inflation remains a concern for 61% of respondents, while 35% worry about unexpected financial strains and economic market changes.
