PROVIDENCE – Nearly 40% of Americans predict they will be in financial “survival mode” in 2021, after a majority faced financial setbacks in 2020, according to a Dec. 8 study from Fidelity Investments Inc.
More than two-thirds of those surveyed for the 2021 New Year Financial Resolutions study reported some kind of financial setback – a lost job or income, unexpected emergency – health-related or other – or providing unexpected financial assistance to family or friends. Just under 30% said they were in worse financial shape than a year ago, up from the 19% who said that in 2019 about the prior year.
Older generations were more likely to anticipate budget constraints in 2021, with 43% of baby boomers characterizing their 2021 financial situation as “survival mode” compared with 25% of Generation Z. The economic fallout from COVID-19 topped the list of financial concerns for the year ahead, named by 46% of those surveyed, followed by unexpected expenses (35%) and rising costs of food and essentials (34%).
Despite these worries, 72% were optimistic about improving their financial position in 2021, with financial-related resolutions a goal among 65% of survey-takers. Increasing savings, paying down debt and cutting expenses were the most popular financial resolutions, motivated by reasons such as “peace of mind” and eliminating the financial worries caused by unforeseen expenses.
To help resolution-makers accomplish their financial goals, Fidelity emphasized the importance of setting and sticking to a budget, creating a “rainy day fund” for emergencies and finding new sources of income such as a part-time job or selling things online.
The study surveyed 3,000 adults nationwide in October.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
