Study Shows Most Americans Optimistic About a Brighter Financial Future in 2021

As you’re planning out your 2021, one more essential item to put on your list is a financial checkup. According to Fidelity Investments’ 2021 New Year Financial Resolutions Study, more than two-thirds of Americans experienced financial setbacks in 2020, often from the loss of a job or household income or another emergency expense. Even those lucky enough to maintain their income still may have had to tap savings to help others, as nearly one in five attribute their financial setback to providing “unexpected financial assistance to family members or friends.”

Despite this, many Americans remain optimistic and determined to make their money work harder in the New Year, with 72 percent confident they’ll be in a better financial position in 2021.

“Americans are clearly ready to leave 2020 behind and start 2021 off on the right foot, including when it comes to their finances,” said Stacey Watson, senior vice president with oversight for Life Event Planning at Fidelity Investments. “This year’s top financial resolutions are consistent with what we’ve seen in the past; however, what makes 2021 unique is how people will achieve them, given the financial pressures and major life events many continue to experience throughout the pandemic.”

According to the Fidelity Investments’ survey, 65 percent of Americans were considering a financial resolution for 2021. That’s down marginally from the previous year (67 percent), but still quite strong given the headwinds experienced by so many families.

Younger generations appear to be more committed to actively improving their finances in the new year, with 78 percent of all Generation Z and millennial respondents considering a financial resolution, compared to 59 percent of all Generation X and boomers.

“Younger generations are building up their careers, families and finances, so it makes sense they have important financial resolutions to make. Still, Gen-X-ers and boomers also experienced significant financial challenges in 2020 and may want to consider making some resolutions of their own to build a stronger financial future particularly when it comes to retirement readiness,” Watson said.

Making a Resolution and Checking it Twice

Resolutions are an important start, but the key is to keep good financial routines going strong well beyond January — and ultimately have them become lifelong habits. The study reveals the key to a successful resolution is the good feeling of making progress and setting clear and specific financial goals.

Having someone to help keep you on track and hold you accountable also plays a role, as nearly one-in-five indicated this was a major reason they were able to stick to a financial resolution last year. In fact, more than three-quarters of people working with a financial professional were able to stick to their financial resolution in 2020, compared to just half of those who did not work with one.

Putting 2020 in the Rearview

To help build a better financial future, consider these three things you can do to move forward:

• Begin with a budget: Of those who said they were in a better financial situation compared to the previous year, more than one in five attributed the success to budgeting better. With so many online tools to make tracking your spending and savings easier, including Fidelity’s Budget Checkup, there are simple ways to create and stick to a budget aligned with a “50-15-5” guideline.
• Replenish that rainy-day fund: More than 8 in 10 Americans say they’ll build up their emergency savings in 2021, an important money move considering that many may have tapped into their stash of cash due to financial setbacks in 2020.
• Find new sources of income: Nearly two-thirds say they plan to find new ways to make money in the new year, whether with a side hustle, selling items online or getting a part-time job. And with 30 percent of Americans planning to declutter their homes in 2021, there’s a good opportunity to find more than just loose change in those cushions and closets.

To get more tips for making and keeping your financial resolutions, visit Fidelity.com.