Despite the general chaos of 2020, more than half of Americans will make a money resolution for 2021, and another 16% are undecided, according to the latest MagnifyMoney survey. Among those planning a 2021 money resolution, about half said they want to reduce debt or become debt-free.
In light of the COVID-19 pandemic, MagnifyMoney also looked at how people did with their 2020 money resolutions. According to the survey of more than 1,000 Americans, 53% of those who set a money resolution for 2020 achieved it, and another 36% have made progress.
Key Findings:
- 51% of Americans will make a money resolution for 2021, up from 47% this year. Those most likely to set a financial goal include six-figure earners (67%), college graduates (64%), millennials (62%) and men (55%).
- The top three 2021 money resolutions are reducing debt and/or becoming debt-free (50%), raising credit scores (46%) and increasing savings (45%).
- About 59% of those who will set a resolution said the pandemic’s continued economic impact may prevent them from achieving that goal. In all, 97% of resolution setters named at least one barrier they may face.
- 53% of those who set a 2020 financial resolution have achieved that goal, and an additional 36% have made progress. Men (62%) and Gen Zers (58%) were most likely to achieve their resolution.
- 62% of those who set a 2020 financial goal changed it because of the crisis. That number jumps to 83% for those who were laid off or furloughed and 76% for those whose salary or hours were cut, compared with just 40% who didn’t lose income.
Resolution-setting is popular in the U.S., and Americans will have various resolutions for 2021.
“New Year’s resolutions are all about improving and feeling better about yourself,” said Matt Schulz, LendingTree chief credit analyst. “The truth is that little makes people feel better about themselves than getting out of debt. That’s why it is always one of the most common resolutions each year, along with improving your health.”
The pandemic’s impact has been widespread and has impacted people’s resolutions. The way that plays out can vary widely based on individual circumstances.
“Those who were able to keep their jobs and avoid contracting the virus may have found that the pandemic helped their resolutions,” said Ken Tumin, founder of DepositAccounts, noting that reduced travel and entertainment expenses could also be a helpful factor. “The low-interest rate environment that took hold when the pandemic began has made it possible for people to save money by refinancing mortgages and other loans. All of these may have made it easier to accomplish money resolutions this year.”
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Methodology
MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,052 Americans, with the sample base proportioned to represent the overall population. The survey was fielded Nov. 19-24, 2020.
MagnifyMoney defined generations as the following ages in 2020:
- Generation Z: 18 to 23
- Millennial: 24 to 39
- Generation X: 40 to 54
- Baby boomer: 55 to 74
While the survey also included consumers from the silent generation (defined as those 75 and older), the sample size for that group was so small that findings related to that group weren’t included in the generational breakdowns.
