• Top Financial Concerns: Unexpected Expenses, Rising Health Care Costs and Stock Market & Economy Still Loom Large
• Spending Time with Loved Ones Is the No. 1 Self-Care Priority for 2019
BOSTON, Dec. 13, 2018 – Have the big swings in the stock market shaken Americans from their bull market complacency? Fidelity Investments’® tenth annual New Year Financial Resolutions Study finds the percentage of people committing to make financial resolutions is staging a comeback, with 32 percent of respondents indicating they intend to make a financial resolution for the year ahead, compared to just 27 percent for 2018, an all-time low in the study’s decade-long history. Encouragingly, respondents’ outlook remains rosy for the year ahead. Four-in-ten (42 percent) say they are currently in a better financial situation than last year and 75 percent predict they will be better off financially in 2019. Those who say are better off financially this year compared to last credit strong money habits. (See graphic for more Key Findings.)
For the tenth year running, topping the list of the three most popular financial resolutions for 2019 is saving more money (a median of $200 per month), followed by paying down debt and spending less money.
“The uptick we’re seeing in financial resolutions tells us people are no longer willing to remain complacent about their finances because the stock market has performed well in the last decade,” says Ken Hevert, senior vice president of Retirement and Income Solutions at Fidelity Investments. “On the heels of what is the longest bull market in history, Americans are re-examining their past financial mistakes and revisiting areas that could stand improvement. They want to maintain momentum in the New Year, no matter what the market brings.”
Despite headlines questioning how much longer this aging bull market can run, Americans’ confidence in their personal financial situation remains surprisingly high. The Fidelity study finds people are optimistic about their futures and about the financial progress they’ve made in the last decade. In fact, when asked to reflect on the areas where they made the most personal progress over the last decade, financial health topped the list:
When asked to assess whether their family is better off, worse off, or in a similar financial situation compared to this time last year, 87 percent of people say they are in a better or similar financial situation. To what do they attribute this good news? Those who feel they are in a better situation point to a strong savings discipline: 55 percent say saving more money has helped, followed by budgeting (53 percent). Getting a new job or promotion and reducing debt tied as the third most popular reasons (44 percent each).
As Americans prepare for a new year, their resolve to improve their finances is only getting stronger, with more respondents than ever saying they’re committed to saving more toward long-term goals like retirement, college, health care and long-term care. In fact, of those who pledged to save more in 2019, the percentage saying they plan to save for long-term goals hit an all-time high of 66 percent, up from 54 percent in 2017. Notably, when it comes to saving more for retirement, 48 percent of all respondents say they intend to increase their annual savings to a 401(k) or IRA by one percent or more of their salary in 2019, up from 43 percent in 2017—an encouraging sign considering federal contribution limits for these accounts will increase in 2019.
Past Financial Fumbles and Concerns for 2019
Still, Americans’ faith in their prospects for the future isn’t blind, with respondents expressing concerns about their own financial behavior and the outside world as they plan for the year ahead. Although an overwhelming 74 percent were able to stick with their resolution last year, more than half of all respondents (58 percent) confessed to making financial mistakes along the way that derailed their progress toward their overall goals.
Beyond the financial fumbles, Americans cite additional factors outside of their control keeping them up at night. Half of respondents say unexpected expenses top their list of financial concerns going into 2019, closely followed by rising health care costs (47 percent) and the economy, including stock market volatility and rising interest rates (43 percent).
“Investors are protective about the financial progress they’ve made. They don’t want to be caught blindsided by factors beyond their control – whether it’s an ill-timed pullback in the market, an emergency home repair, or unexpected health event,” says Hevert. “Heading into 2019, they’re preparing for the unexpected by prioritizing saving and investing no matter the ebb and flow of the economy, or their own financial slip-ups.”
Money Isn’t Everything: Make More Time for Loved Ones and Yourself
Despite concerns about whether an unexpected expense or volatile market could derail their progress, many are well-aware that money isn’t everything. Putting family first as well as their own health and well-being were prominent themes in this year’s study. When asked what they want to do for themselves in 2019 to enhance their mental health and happiness, the overwhelming majority (78 percent) cite spending time with those they love as a priority, followed by exercising more (64 percent) and carving out more “me time” and practicing mindfulness (46 percent each).
In fact, 94 percent of respondents want to tackle at least one of the following self-care resolutions in 2019:
Need Help Focusing on Finances? Tips for Getting Started
Sticking to financial resolutions takes discipline, but it helps to be forewarned about the obstacles that can come between even the best-intentioned savers and their financial goals. According to the survey, 22 percent of those who made resolutions for 2018 were unable to stick to them. The top reasons were unexpected setbacks such as unemployment or healthcare costs (58 percent), failing to set milestones to stay motivated (42 percent) and the need for more knowledge and/or guidance (33 percent).
Fidelity offers the following online resources to help people achieve their 2019 resolutions:
• Fact Sheet: Includes additional findings from Fidelity’s New Year Financial Resolutions Study.
• Fidelity.com/resolutions: A webpage dedicated to New Year resolutions, guidance on how to set goals and stick to a plan, as well as a video of tips for making and keeping a financial resolution.
• Essential money moves to make before year end: A Fidelity Viewpoints® article with tips to help prepare for taxes and manage finances before the curtain closes on 2018.
• Fidelity Retirement Score: Answer six simple questions in the online tool to get a personal retirement score and next steps to consider. Fidelity customers can also obtain more information in the Fidelity Planning & Guidance Center.
• Just 1% more can make a big difference: Learn how increasing savings by 1% now could mean a lot by retirement in this Fidelity Viewpoints article.
About the New Year Financial Resolutions Study
This study presents the findings of a telephone survey conducted among two national probability samples, consisting of 2,005 adults, 18 years of age and older. Interviewing for this CARAVAN® Survey was completed on October 4-7 and 11-14, 2018 by Engine Insights, which is not affiliated with Fidelity Investments. The results of this survey may not be representative of all adults meeting the same criteria as those surveyed for this study.
About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $7.0 trillion, including managed assets of $2.5 trillion as of October 31, 2018, we focus on meeting the unique needs of a diverse set of customers: helping more than 28 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 13,000 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.
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