New Year Prompts Financial Housecleaning - Other News

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New Year Prompts Financial Housecleaning

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New Year Prompts Financial Housecleaning

As 2013 draws to a close, many of us are checking our credit reports and thinking about how we’ll manage our finances over the coming year.

Managing debt, reviewing credit scores, making sure bills are paid on time and sticking to a budget are just some of the ways people are tidying up their financial houses this time of year. An annual survey from Wells Fargo called “How America Buys and Borrows” details how people are feeling when it comes to their bank accounts and what things they’re doing to keep their finances in shape. The 2013 results show that people are generally optimistic about their financial picture.

Checking credit before major purchases

Sixty percent of respondents said they’ve checked their credit scores or reports sometime during the last twelve months. People are more apt to check their credit when they are planning a major purchase, and 80% of people indicated that they do plan to make a purchase of $2,000 or more within two years. Forty-one percent anticipate buying a new house or doing costly home improvements. Thirty-two percent will spend a significant amount on travel and 28% said they plan to buy a car in the next two years.

Good financial habits lead to good financial feelings

Not too many people seem worried about their credit scores, however. Only 22% said they are concerned about their credit, and 40% said they are proud of their scores. The majority of people surveyed felt good about their finances, with over three-quarters of respondents (77%) reporting that their financial situation is moderate to good.

When asked about their financial habits, 39% of people said they pay their credit cards off in full each month. Thirty-eight percent said that when they need to make a big purchase they save up for it rather than putting it on a credit card. And 32% said they stick to a monthly budget. Almost one-third said that they are debt-free, with the exception of a mortgage.

Looking ahead to 2014 and beyond

When they think about the future, 43% of people said they expect their finances to get better over the next year. Forty-four percent feel that things will stay about the same. When it comes to saving money, one-third said they are saving more now than they were a few years ago. But only 20% feel financially prepared in the case of an emergency.

Only 25% of respondents feel they are doing a good job when it comes to financial housekeeping; the same percentage who rated themselves as “financially savvy.”

The Wells Fargo “How America Buys and Borrows” survey polled over 2,000 people about their financial attitudes and practices. It was conducted online in September 2013.

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