Saturday, December 28, 2019

Thrifty Thinking: Financial New Year's Resolutions

Resolution season is fast approaching, money is still America’s top stressor, and nearly 99 million people are planning to make a financial resolution for 2020, according to a new WalletHub survey, released today. In order to provide a playbook for how to make financial resolutions a reality, WalletHub also released its list of the Top 10 Financial Resolutions for 2020. You can find a handful of highlights below. 
  • The #1 financial resolution for men is to save more, while women are focused on paying off debt.
  • WalletHub’s Top 10 New Year’s Financial Resolutions for 2020 start with 1) Repay 20% of your credit card debt and 2) Add one month’s pay to your emergency fund.
  • 7 in 10 people admit they’ve cheated on a New Year’s resolution before.
  • Conservatives are 2.5X more likely than Liberals to think it is NOT ok to adjust your New Year’s Resolution later in the year.
  • Millennials are twice as likely as baby boomers to break a resolution due to laziness.
Q&A with WalletHub CEO Odysseas Papadimitriou

What are the top New Year’s financial resolutions that people should make for 2020?

“The top New Year’s financial resolutions that people should make for 2020 are to pay off existing credit card debt and to save as much as possible,” said WalletHub CEO Odysseas Papadimitriou. “I’m predicting that 2020 will be a very strong year for the economy. But we shouldn’t forget that it’s only a matter of time until the next recession, and now is the time to strengthen our financial foundation. The good news is that people seem to at least realize the need to improve in these areas. Six in 10 people say that if they make a financial resolution this year, it will be related to paying off debt or saving more, according to WalletHub’s latest survey.”

Why do you think most people have trouble sticking to their New Year’s resolutions?

“Two of the biggest reasons that people don’t stick to their New Year’s resolutions are low expectations and the lack of a clear plan. Nearly half of 2020 resolution-makers expect to keep their resolution for just six months or less, WalletHub’s survey found, with 15% of people admitting that laziness is most likely to be their resolution’s downfall,” said WalletHub CEO Odysseas Papadimitriou. “Plus, far too many of us confuse resolutions with hopes and wishes. A resolution should be considered a vow to achieve a goal, and that means you need to make a realistic plan for getting there.”

Is it OK to adjust your New Year’s Resolution during the year?

“Eight in 10 people believe that it is OK to adjust their New Year’s resolutions throughout the year, per WalletHub’s survey, but it really depends on the circumstances. It’s not a good idea to adjust your resolution just to make yourself feel better, especially if lowering the bar starts to take the teeth out of your resolution, making it ineffectual. On the other hand, if you need to recalibrate because your circumstances have changed, it makes a lot of sense,” said WalletHub CEO Odysseas Papadimitriou. “It could actually be a good idea to go month-to-month with your resolutions. Breaking up your goals into smaller bites might make things more manageable and produce better results overall.”

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