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With New Year’s Eve right around the corner, financial resolutions will be on people’s minds this season, according to a new study by Fidelity Investments. The top resolution for 2016 is saving more (54%), while spending less (19%) and paying off debt (16%) are part of the plan too. Optimism is up too, with 72% of people gearing up for an upswing in their personal financial picture.
In Fidelity Investments seventh annual New Year Financial Resolutions Study, they queried people about their plans for 2016, finding that 37% are thinking about making money-related resolutions, up six points from last year.
This uptick in financial resolutions, may be due to the market’s volatility during the summer. “While the market volatility of August may be out of sight, it’s not out of mind. Periods of economic uncertainty tend to be a reminder about why having a financial plan—and sticking to it—is important,” said Ken Hevert, senior vice president of Retirement at Fidelity.
Saving more, and paying down debt
Saving is definitely in style next year, with just about two-thirds (63%) of people aiming to build up their savings in order to meet long term goals, including financing college, and saving for retirement, up from 57% last year. But short-term saving is up as well, with six out of ten people saying they are looking to increase their emergency fund.
Yet reducing credit card debt is also on people’s minds, and is at an all-time high, weighing in at 11%, having doubled from what it was in 2010. Since some people’s debt went up in 2015, this is not surprising, and of those 19% cited unexpected and increased health care costs as being the reason why they owe more. It is the top reason for debt, having tripled over the last four years.
Optimism is up, but concerns remain
While people see clear sailing financially next year, they do have some concerns, which might throw a monkey wrench into their plans. With unexpected expenses being the top concern for 62% of people. But the ups and downs of the economy come in a close second at 52%, for some fueled by three factors – interest rates, global unrest, and stock market volatility.
Retirement has some very real upsides, but for people in this study it brings along some concerns as well, with the cost of healthcare during their later years being a source of worry for 47% of respondents. This concern also fueled a New Year’s resolution for some – socking away money to pay for retiree health care costs.
Fidelity's New Year Financial Resolutions Study was conducted between October 15 and 25 through interviews with 2,013 people who were over 18 years old.