Yahoo Finance The Future of Financial Resolutions: How Money Goals Are Changing in 2024
Most Americans feel pretty meh about how their financial lives played out in 2023.
A new GOBankingRates survey of more than 1,000 adults found that nearly 1 in 3 people think they are doing OK but still have plenty of work to do. The next-largest group, about 28%, said they’re struggling but still getting by. Another 19% are on the fence, assessing their situation as neither good nor bad.
Much smaller percentages say they spent the year in either the best or worst financial shape of their lives.
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Most people feel lukewarm about their own financial standing, but they also express a combination of intense anxiety and hopeful optimism for their prospects in 2024 — and those emotions are revealed in New Year’s resolutions that are evolving to keep pace with a rapidly changing world.
The Big 3 Money Goals Survived the Pandemic Intact
The COVID-19 crisis brought radical financial and economic changes, including the remote work movement, stimulus payments, 9%-plus inflation, history’s hottest housing market, record-low gas prices that became record-high gas prices and record-low interest rates that are now higher than they’ve been in more than 20 years.
But despite all the turmoil, a trio of money goals that dominated pre-pandemic New Year’s resolutions still command the top three spots today.
According to the annual Fidelity Investments Financial Resolutions Study, now in its 15th year, saving more money, digging out of debt and reining in spending — in that order — were the top money goals at the end of 2018 heading into 2019, the final pre-pandemic year. They held the same rank in the five years that have since passed and still maintain the top three going into 2024.
Although it didn’t ask about spending, the GOBankingRates study confirms Fidelity’s findings, with saving and debt reduction claiming the top two spots.
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Resolutions Reflect Evolving Aspirations and Anxieties
Both the GOBankingRates and Fidelity studies show that inflation was the primary financial concern in 2022 and remains so at the end of 2023. Rising prices, after all, reduce household purchasing power, inhibit people’s lifestyles and make it harder to save and invest while making it easier to fall into debt.
Even so, an undercurrent of optimism prevails.
The Fidelity study found that although 35% say their finances are in worse shape than this time last year, 2 out of 3 expect their circumstances to improve in 2024. The GOBankingRates study backs up that conclusion. Despite widespread trepidation about rising prices and general economic anxiety, large majorities plan to invest, build an emergency fund, further their education, advance in their careers and save four- or even five-figure sums next year. About 90% of people who aren’t in debt expect to remain debt-free in 2024, and people are pursuing major milestones like buying a home or car, expanding their families, paying for a wedding, retiring or taking an expensive vacation in nearly identical percentages as last year.
But sunny end-of-year outlooks are nothing new.
Even in 2020, as the pre-vaccine pandemic raged, Fidelity found that most people were optimistic about a brighter financial future despite 40% expecting to spend 2021 in “survival mode.”
The twin storylines of optimism and apprehension are revealed in how resolutions are evolving with changing economic conditions.
Holistic Wealth Is Trending — and It Shows in Today’s Resolutions
The dictionary defines “holistic” as “The belief that the parts of something are interconnected and can be explained only by reference to the whole.”
Traditionally, the term applied mostly to medicine. But in 2019, Harvard-trained economist, policy expert and bestselling author Keisha Blair was credited with coining the term “holistic wealth” in her book, “Holistic Wealth: 32 Life Lessons to Help You Find Purpose, Prosperity, and Happiness.”
The founder of the Institute on Holistic Wealth and host of the Holistic Wealth podcast, she’s watched the concept she pioneered find its way into more and more post-pandemic money goals.
“As we head into 2024, people around the world are once again setting New Year’s resolutions, with a generational shift towards a more holistic approach to financial well-being,” she said. “Over the years, the landscape of financial resolutions has changed, reflecting changing priorities and an increased awareness of the interconnectedness of various aspects of life.”
Debt, spending, saving, investing and the other pieces of the personal finance puzzle don’t exist in a vacuum. A change to one impacts them all, and Blair has noticed a shift away from singular goals in favor of resolutions that treat personal finance as a whole that’s greater than the sum of its parts.
“People are reframing their priorities to fit a more holistically wealthy lifestyle,” she said.
Wealth and Health Resolutions Become One
Historically, most resolutions involved either fitness or money — but many are now merging health and wealth into one goal as they come to accept that the latter isn’t possible without the former.
“Holistic wealth extends beyond monetary considerations, emphasizing mental and physical well-being,” said Blair.
This trend is still emerging.
As recently as 2019, Fidelity’s final pre-COVID annual study found that people were more likely to report making progress with their financial health than with their emotional or physical health, implying that most still viewed them as unrelated standalone issues.
But now, the two concepts are merging.
“In 2024, many individuals are setting resolutions that include allocating resources for self-care, mental health services and fitness, recognizing the profound impact these elements have on overall life satisfaction,” said Blair.
Investing as a Political Tool and Social Statement
Investing has emerged as a major front in America’s escalating culture wars and political polarization. A yearslong trend toward ethical, sustainable investing triggered a backlash among some who deliberately divested from ESG funds in recent years. ESG proponents, on the other hand, doubled down. Brands like Bud Light and Disney found themselves on the front lines as more investors are resolving to support only the companies and causes that validate their worldviews.
“Investors are now aligning their financial goals with their values, seeking avenues that promote positive change while still generating returns,” said Blair. “This shift reflects a broader understanding of wealth that goes beyond personal gain to include societal and environmental impacts.”
Financial Education as a Tool of Economic Resilience
Traditional end-of-year money vows dealt mostly with actions that deliver observable results, like eliminating debt, saving more and spending less. But the last few years brought crises that disproved several commonly accepted money axioms and humbled many people who previously considered themselves financially savvy. In the coming years, money knowledge will be as important for financial resilience as money itself — and people are keen to arm themselves with the knowledge needed to endure the next catastrophe.
“In 2024, an increasing number of people are resolving to enhance their financial literacy,” said Blair. “People are seeking to educate themselves on emerging trends, investment opportunities and risk management. This commitment to ongoing learning reflects a proactive approach to financial well-being.”
Mindful Spending Replaces Minimized Spending
Where resolutions of old might have included vows to spend less in the coming year, people today are instead striving to spend more deliberately.
“In contrast to the consumer-driven resolutions of the past, a growing number of people are embracing mindful spending and minimalism,” said Blair. “This shift reflects a desire for quality over quantity, emphasizing experiences over possessions and recognizing that true wealth extends beyond material accumulation. This also includes taking sabbaticals when needed and long-term travel to explore other interests.”
As the World Gets More Complicated, Resolutions Become More Complex
The coming year is expected to bring lower interest rates and normal inflation levels. If stocks and the job market remain strong, and the economy continues to grow, 2024 will bring prosperity to many — but people’s revamped money goals reflect the hard lessons they learned over the last few years when staying financially healthy suddenly got a whole lot more complicated.
“The financial New Year’s resolutions of 2024 reflect a broader understanding of wealth that goes beyond money,” said Blair. “The emphasis on holistic wealth encompasses financial, physical and mental well-being, as well as a commitment to sustainability, continuous learning and resilience. As individuals reshape their financial goals, the evolution towards a more holistic approach signals a positive shift towards a more balanced and fulfilling life.”
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This article originally appeared on GOBankingRates.com: The Future of Financial Resolutions: How Money Goals Are Changing in 2024
