With 2015 out and 2016 already rolling along, now is the time we get a fresh start and begin a list of goals and resolutions we hope to accomplish for the upcoming year. For many of us, our resolutions may include some form of financial goal. In fact, in a recent survey, LendingTree found that nearly 85% of Americans had at least one financial goal they wanted to achieve in 2016.
Reflecting Back on 2015
To many Americans, 2015 was financially a lukewarm year. Only a small number (13%) of Americans felt they were great and that their finances were where they wanted them to be. But almost the same amount of Americans (11%) felt they were in a bad spot as of the end of 2015. An additional 18% felt 2015 was a struggle and they were not financially in a good spot. Most Americans fell in the middle, feeling they had room for improvement, but ended 2015 at least relatively stable.
Money remains at the top of many Americans’ minds even as the economy stabilizes. But even with a better economy, many Americans are still facing financial woes. Some of these issues may be due to larger economic factors, such as low income growth and high cost of education. But, some problems may be due to our own actions and ability to manage money as nearly 76% of Americans stated they had at least one financial regret in 2015. Budgeting issues and impulsivity may be especially true amongst millennials, as 89% stated they had at least one financial regret in 2015.
The Outlook for 2016
As a whole, America’s financial optimism for 2016 is decent but reserved. Only 11% state it will be a great year and that their finances will be fine. Most Americans feel the year will be OK with some financial ups and downs (40%) or that it will be a good year and a year for some financial improvement (30%). Still, about 1 in 5 (19%) Americans have a pessimistic outlook on their personal finances for 2016, stating it will either be a bad or very bad year with money continuing to be a struggle or that personal finances may worsen.
America’s Financial Resolutions for 2016
American’s financially resolutions for 2016 are closely in line with their regrets and reflection of 2015. Many American’s feel money has been tight which has affected our ability to save either extra cash or for a big purchase.
Millennials, whom had a more regrettable 2015, were more likely to include finance-based resolutions for this year. About 58% wished they had put more into general savings, 50% wished they better followed a set a monthly budget, and 43% wished they reduced or paid off more debt last year. While millennials may be more impulsive with their budget, and may be facing cash flow challenges due high student debts and low salaries, they want to be financially responsible and understand it’s important to maintain a healthy budget. Unsurprising, as this generation both saw and directly felt the aftermath of the recent economic crash.
The Silver Lining
Though American outlook towards finances is somewhat reserved for 2016, we may see some positive trends in the market based on what survey respondents say they have planned for the year. Nearly 1 in 4 Americans expect to purchase a home or may purchase a home this year depending on their financial situation and available opportunities.
Much of this pool of potential homebuyers in 2016 will be first-time homebuyers, 37.85%. And a significant portion of these first-time homebuyers will be Millennials, almost 43%. Millennials could be a significant driver for home purchases this year, which is a sign of positive economic growth and stability.
Another important driver in home purchases to watch for this year are previous homeowners looking to return to the homebuyer market. The survey shows about 13.4% of potential homebuyers will be previous homeowners returning to the market. These numbers may include normally active homeowners in transition or homeowners who lost a home during the financial crisis. The housing bubble occurred in 2008 and 2015 marked the seventh anniversary year of the crash. Many people lost their homes to foreclosure during the bubble, but since foreclosures drop off credit reports after seven years, many of these people who have since rebuilt their credit could qualify for a home purchase again in 2016.
Reaching Your 2016 Goals
Luckily, most Americans are actively watching their finances and have some sort of financial goal in mind for the year. Whether it’s paying off student loans, saving for a home, or building their credit score.
Unfortunately, many of us fail to accomplish our resolutions. Less than 1 in 4 of surveyed Americans completed all their resolutions last year. And about 1 in 5 Americans state they, on average, last a week or less with resolutions! That means 20 percent of America has already stopped focusing on their resolutions as of this article’s release!
To stay on track with your financial goals this year, follow these tips:
- Make a plan: Create specific action steps that will help you reach your goals. Set deadlines and benchmarks for yourself so there is a measurable way of tracking your progress. If you’re trying to save a specific amount by the end of the year, set small monthly goal amounts for yourself.
- Write everything down: Write down your goal and write down your plan. Having a reminder and blueprint will increase your likelihood of staying on track.
- Be realistic: Your goals should be challenging but achievable. Again, break larger goals down into smaller goals and manageable pieces so they seem less daunting. You’ll be more committed to them.
- Share your plan: Tell someone else your goals and plans for the year. Having another person to hold you accountable may push you to keep trying when you may otherwise want to quit.
- Make it a competition: It can be fun to have a little bit of rivalry and often times it pushes us to be better. If the goal makes sense, find a partner that will challenge you to do your best. Make it a game between you two to see who can reach the same goal the fastest.
Good luck, America! And happy 2016!