According to research from Edward Jones, the new year brings fresh hope and new financial resolutions for many Americans. While only 10% of Americans aged 65 years and older made and kept financial New Year’s resolutions in 2023, a staggering 71% have committed to making such resolutions for the quickly approaching new year.
Lena Haas, head of wealth management advice and solutions at Edward Jones, emphasizes the importance of starting the year on the right financial foot. "While the new year can be a time for lifestyle resolutions, it’s also important to begin the year on the right financial foot," she says.
Edward Jones' research reveals that among Americans aged 65 and above who are setting financial resolutions for 2024, the top three goals include paying off credit-card debt (21%), setting up a savings account (18%), and establishing a budget (8%).
Credit-card debt is not only a concern for retirees but a significant problem for many Americans. According to Lending Tree, the average credit-card debt among all U.S. cardholders with unpaid balances in the third quarter of 2023 was $6,993. Additionally, statistics from the Federal Reserve Bank of New York show that Americans' total credit-card balance reached a record $1.079 trillion during that time.
Haas underscores the impact of inflation on managing debt and advises individuals to pay their bills promptly to avoid rising interest rates. She further suggests exploring opportunities to transfer balances to lower-interest rate cards, depending on credit scores. For those carrying multiple credit cards, Haas recommends considering a fixed-rate debt-consolidation loan. Lowering debt payments allows individuals to allocate more funds towards their retirement goals.
As the new year approaches, may it be a time of financial renewal and progress towards a brighter financial future.
Financial Resolutions for 2024: A Guide for Americans Aged 65+
As the new year begins, many Americans aged 65 and above are setting financial resolutions to stay on track with their goals. According to a recent survey conducted by Edward Jones, 73% of seniors consider budgeting as the most helpful tool in achieving their financial objectives.
Regular Financial Check-ins for Improved Success
In order to ensure progress towards your financial goals, it is important to regularly check in with your finances. As Haas from Edward Jones explains, spending needs can change on a yearly, monthly, or even weekly basis. By outlining and comparing your expenses against your retirement income, you gain a better understanding of your current financial situation.
The Power of Budgeting Through Organization
While there are various ways to budget, one effective approach involves creating lists. By organizing your money into categories such as "needs," "wants," and "nice-to-haves," you can gain insights into your daily spending habits. This method aligns your expenses with your values and enables you to simultaneously work towards your savings and retirement goals.
Not Everyone Makes New Year's Resolutions
While financial resolutions are common, it is worth mentioning that not everyone chooses to make them. According to the survey by Edward Jones, approximately 29% of older Americans surveyed opt out of setting financial resolutions for 2024. This group feels comfortable with their current financial position and does not see the need for additional resolutions.
Other reasons cited for not making financial resolutions include never making New Year's resolutions before (43%), not feeling financially capable of accomplishing goals (11%), and uncertainty about future finances in 2024 (9%).
Proactive Goal Setting Yields Better Results
Research suggests that approach-oriented goals have higher success rates compared to avoidance-oriented goals. Instead of trying to avoid certain behaviors, such as curbing chocolate cravings or cutting unnecessary spending, it is more effective to adopt proactive strategies. Creating a to-do list and actively sticking to it can significantly improve your chances of achieving your financial resolutions.
Remember, the new year offers a fresh start and an opportunity to take control of your financial future. By setting realistic goals and regularly assessing your finances, you can work towards a more secure and prosperous future.