CONSIDER THIS: As the new year draws near, many Americans will turn their thoughts to making their New Year's resolutions. According to the most recent survey from Georgia Credit Union Affiliates, 49 percent of respondents say their top financial goal for the next 12 months is to pay down debt. This closely mirrors the top financial resolutions for 2011.
New Year's resolutions are often about fresh starts and positive outlooks for the future. However, in 2011, surrounded by a sluggish economy, declining home values and a stagnant job market, most Americans faced a tremendous amount of uncertainty. Will the pressures and unknowns of the slow and painful recession recovery impact people's outlook on the new year? Will there be a shift in the types of New Year's resolutions made by people still facing the lingering effects of tough economic times?
According to TD Ameritrade Holding Corporation's annual New Year's Resolution survey, 89 percent of respondents plan to make at least one personal resolution this year. Studies indicate that there has been a shift in top resolutions over the last decade. FC Organizational Products LLC recently released the results of its annual New Year's Resolutions Survey as well as a comparison of this year's results with its first survey in 2002. They report that the top three resolutions for 2012 were also on the list in 2002: 1) become more physically fit; 2) improve one's financial condition; and 3) improve health.
However, 2002's top resolution (weight loss) fell to number four in 2012. Four resolutions that appeared on the top 10 list in 2002 no longer made the cut in 2012: quit/reduce smoking, change career or job, continue education, and improve work habits and career situation. The shift seems to indicate that Americans are reluctant to pursue career changes in the current economy.
Uncertainty regarding the economy complicates the process of planning and setting goals for many Americans. According to the TD Ameritrade survey, "more than half (52 percent) of respondents said there is still too much volatility and uncertainty in the market to predict what 2012 will hold." Nevertheless, Americans are still ready to set financial goals. TD Ameritrade reports that 51 percent plan to reduce spending, 51 percent want to save for a financial emergency (such as a job loss or loss of a spouse) and 47 percent plan to reduce debt. This mirrors a GCUA study from earlier this year.
You may want to know:
- Will the economic outlook affect the resolutions people make?
- Do people who make resolutions also make a concrete plan for keeping them?
- How do Americans plan to reduce spending this year?
- Are people more likely to make personal or financial resolutions?
- What percentage of people who make resolutions go on to keep them?
An insider's perspective:
"While financial resolutions have always been important, they are certainly more top-of-mind now than ever before," said Cindy Owens, president of Piedmont Hospital Federal Credit Union. Owens believes that an increasing number of people are realizing that they can't afford to ignore financial issues and wait for things to improve.
"What we have seen is people taking the initiative with their financial problems," Owens added. "They are setting goals to help them get back on track. People who had a credit card with an astronomical rate and built up debt are coming to us for help in consolidating their debt and paying it down."
According to Owens, members are looking to reduce the amount they spend on financial services so they can focus on getting out of debt. She believes the best way for people to motivate themselves to stick to their financial resolutions is to keep the benefits of reaching the end goal in view.
"When people come to us, we try to show them that there is some benefit to them in reaching their goal. If they have a goal of improving their credit, we help them see the benefit of each small step along the way," Owens said. "When they take out a small $500 loan and repay it on time, then their credit score improves. With a better credit score, they will be able to qualify for a low-interest car loan. Each step builds on the one before it."
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*Views and opinions expressed on these videos do not necessarily reflect those of Georgia Credit Union Affiliates.