For many Americans, the start of a new year is a chance to reset and plan for the months ahead. Because of the economic impacts caused by last year’s recession and the coronavirus pandemic, the Million Dollar Round Table (MDRT) found that 72% of those who make New Year’s resolutions put a renewed priority on their personal finances this year.
This determination comes after a year of stress and increased financial burdens for many. In fact, 57% of survey participants revealed that 2020’s economic conditions hurt their ability to save for important life goals in the years ahead.
Americans Saw Widespread Household Income Changes Last Year
According to the MDRT survey, 54% of Americans observed changes in their household income in 2020 compared to the year before, while 35% reported a decrease in their household income even with government assistance.
Another study by Doxo revealed that for almost 7 in 10 Americans, their personal finances will need more than a year to recover from the events that took place in 2020.
However, younger adults and people of color have been affected by 2020’s economic crises the most.
In comparison to the 43% of Americans aged 65 and older who predict long-term difficulties with their finances, 62% of 18-to-34-year-olds and 67% of 35-to-44-year olds report the same. Meanwhile, 66% of Latinos surveyed are experiencing long-term effects of last year compared to 53% of their white American counterparts.
Many Look Toward a Hopeful Future for Their Finances
Despite the grim outlook, many have taken 2020 as a learning moment for their personal finances as 83% of survey participants learned at least one financial lesson in 2020, with the top three being:
- Having an emergency fund (52%)
- Paying down debt (36%)
- Discussing finances with others (29%)
As a result, a KeyBank survey reported that 53% of Americans are now more confident in handling their finances than they were before the pandemic.
Many are keeping money top of mind for this year, with 72% of Americans that make New Year’s resolutions focusing on ones related to personal finance.
The MDRT survey also showed that 44% of survey respondents that don’t have a financial advisor now understand the benefits of working with one. If they do decide to work with an advisor:
- 30% will focus on identifying and preparing for long-term financial goals
- 28% on setting up an emergency fund
- 26% on paying down debt
- 20% on recovering from the financial impact of the pandemic