Two-thirds or 66% of Americans plan to make New Year’s financial resolutions by 2023, according to a Fidelity Investments survey. However, the economic turmoil of 2022 is persuading many to approach the new year with caution.
More than a third of those surveyed said they are in a worse financial situation this year than the year before. About half say they are ready to “live sensibly” or “plan ahead,” according to the survey.
“After the stresses of recent years, it’s understandable that Americans take a pragmatic view of their financial situation,” Stacey Watson, senior vice president of Life Event Planning at Fidelity Investments, said in a news release. “This is an encouraging indication of the determination and resilience we can draw on when financial things get tough. Given the ups and downs experienced, being creative and establishing new habits of financial wellness are positive signs that many are finding ways to shift focus, to pay off debt or build up emergency savings. Proper planning and balance are key.”
In the future, 39% of those surveyed plan to save more money, 28% are looking to spend less money, and 32% want to pay off debt.
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Inflation was the biggest financial setback of 2022
Americans ranked inflation the biggest financial setback in 2022, according to the Fidelity survey.
The Consumer Price Index (CPI), a measure of inflation, rose 7.1% year-over-year in November. While still unusually high, that spike marked the slowest monthly rise since late 2021. Nonetheless, the inflation rate is close to its June peak of 9.1% when it reached levels not seen since the 1980s.
Given the events of the past few years, 45% of respondents say they are considering more conservative goals for the coming year, according to the Fidelity survey.
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Economists warn of recession in 2023
As many Americans plan to live more conservatively in the new year, they may be heading into a recession. economists with Bank of America announced that it expects a mild recession.
“Our economists call for a 3-quarter recession with a recovery expected in the fourth quarter of 2023, as well as a significant reduction in the Fed’s asset base through a $1.1 trillion quantitative tightening over the next year,” Savita Subramanian, head of US equity strategy, quant strategy and ESG research at Bank of America, said.
The Mortgage Bankers Association (MBA) also predicts a recession.
“Next year will be particularly challenging for the US and global economies,” Mike Fratantoni, MBA’s chief economist and senior vice president, said at the 2022 MBA annual conference in Nashville. “The sharp increase in interest rates this year, as a consequence of the Federal Reserve’s efforts to curb inflation, will lead to an equally sharp slowdown in the economy, matching the recession that is occurring right now in the equity market. living place”.
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