As we head into 2019, many people are focusing on their hopes and goals for next year, outlining their New Year’s resolutions. Many may pledge to eat better, exercise more, spend more time with loved ones, or kick a bad habit. But what about resolving to manage money better, invest and save more, spend less on frivolous things, or break bad financial habits?
These types of resolutions may seem less glamorous, but according to the 10th annual New Year’s Resolution Study from Allianz Life, just over a quarter (27 percent) of Americans are making financial stability their top priority in 2019. Not surprisingly health and wellness top the list with 49 percent. If you’ve ever had to wait in line for the treadmill at your gym in January, you know what this means.
While about a quarter of people are prioritizing financial stability next year, that number is actually down from 32 percent last year. So why are Americans putting less of a focus on financial fitness in 2019? There are a couple of interesting reasons why this might be so, mostly tied to a positive outlook across a number of key economic factors.
Only 23 percent of Americans are concerned about stagnant wages heading into 2019, down from 30 percent last year. Getting a pay bump can certainly boost someone’s confidence, and perhaps make them feel more financially stable. In addition, fewer Americans are worried about their job security, further adding to increased feelings of hopefulness about the year ahead.
These factors combined could be leading more people to feel increasingly comfortable with their current financial situation, possibly allowing them to feel less of a need or any urgency to make changes in 2019.
Millennials lead the way. Say what you will about millennials, but when it comes to their financial outlook for the coming year, they actually tend to be more optimistic than baby boomers and Gen Xers. Across all the generations, they are feeling the most hopeful about growing wages and solid job security than they were last year.
And they are doing a good job at breaking some of their bad financial habits. Fewer millennials fessed up to spending too much and not saving enough money in 2018. Those are two areas where everyone can follow their example.
Perhaps because of this increased optimism and improved financial habits, fewer millennials plan to focus on achieving financial stability in 2019 as compared to 2018. Yet, interestingly, the generation as a whole still leads boomers and Gen Xers in resolving to improve their financial planning in the year ahead.
Still looking for guidance. While financial confidence is certainly a trait to be admired, and it’s encouraging to see many millennials stepping up to break bad financial habits, just because things are going well doesn’t mean you still don’t have to plan ahead and be proactive.
That’s like not getting your oil changed regularly just because your car gets you to and from work every day just fine. Or not eating right just because you haven’t had a heart attack yet.
Practicing good financial habits like creating and sticking to a budget, paying bills on time, and developing a savings strategy are important steps to build a solid financial foundation and, over time, it can even help boost confidence.
Another clear reason to stay in proactive financial planning mode is the recent market volatility. Despite this increased level of optimism about finances, nearly a third (31 percent) of people believe there will be a major recession in 2019. If people have good financial habits in place and feel they are on solid financial and investment footing, they have a better chance of maintaining that feeling of resilience — despite dark financial clouds that may be gathering on the horizon.
So what is a good next step? Leveraging an experienced financial professional can help set you up for financial success. Almost a third (31 percent) of Americans say they are more likely to seek the advice of a financial professional in 2019. Again, millennials are leading the charge, with almost half (47 percent) noting they would like the help of a financial professional in 2019. This is compared to just 26 percent of Gen Xers, and 21 percent for boomers.
But remember it’s not just about millennials. No matter what age you are or how optimistic you are feeling about finances next year, everyone can potentially benefit from working with a financial professional. They can help you identify some financial resolutions for 2019 — whether it be saving more, making smarter investments, or paying down debt. More importantly, they can also help you stick with your financial resolutions. They may be less helpful when it comes to your resolution to run a marathon, though.
For those that do have a financial professional already, it’s always a good idea to meet at the start of the year, and discuss what your goals are for the year ahead and beyond. If you’re not currently working with a financial professional, a good resolution might be to take that first step and do some research to find someone who can help you get into better financial shape in the new year.
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