Most Americans say they're optimistic about a brighter financial future in 2021
(BPT) - As we enter 2021, here’s one more essential item to put on your list in addition to canned goods and masks: a financial checkup. According to Fidelity Investments’ 2021 New Year Financial Resolutions Study, more than two-thirds of Americans experienced financial setbacks in 2020, often from the loss of a job or household income or another emergency expense. Even those lucky enough to maintain their income still may have had to tap savings to help others, as nearly one in five attribute their financial setback to providing “unexpected financial assistance to family members or friends.” Despite this, many Americans remain optimistic and determined to make their money work harder in the New Year, with 72% confident they’ll be in a better financial position in 2021.
“Americans are clearly ready to leave 2020 behind and start 2021 off on the right foot, including when it comes to their finances,” said Stacey Watson, senior vice president with oversight for Life Event Planning at Fidelity Investments. “This year’s top financial resolutions are consistent with what we’ve seen in the past, however, what makes 2021 unique is how people will achieve them, given the financial pressures and major life events many continue to experience throughout the pandemic.”
This year, 65% of Americans are considering a financial resolution for 2021, which is down marginally from last year (67%), but still quite strong given the headwinds experienced by so many families. Younger generations appear to be more committed to actively improving their finances in the new year, with 78% of all Gen Z and Millennial respondents considering a financial resolution compared to 59% of all Gen X and Boomers.
“Younger generations are building up their careers, families and finances, so it makes sense they have important financial resolutions to make. Still, Gen-X-ers and Boomers also experienced significant financial challenges in 2020 and may want to consider making some resolutions of their own to build a stronger financial future particularly when it comes to retirement readiness,” continued Watson.
Making a resolution, and checking it twice
Resolutions are an important start, but the key is to keep good financial routines going strong well beyond January — and ultimately have them become life-long habits. The study reveals the key to a successful resolution is the good feeling of making progress and setting clear and specific financial goals. Having someone to help keep you on track and hold you accountable also plays a role, as nearly one-in-five indicated this was a major reason they were able to stick to a financial resolution last year. In fact, more than three-quarters (77%) of people working with a financial professional were able to stick to their financial resolution in 2020, compared to just half (50%) of those who did not work with one.
Putting 2020 in the rearview
To help build a better financial future, consider these three things you can do to move forward:
To get more tips for making and keeping your financial resolutions, visit Fidelity.com.
This study presents the findings of a national online survey, consisting of 3,011 adults, 18 years of age and older. The generations are defined as: Baby Boomers (ages 56-74), Gen X (ages 40-55), millennials (ages24-39), and Gen Z (ages 18-23; although this generation has a wider range, we only surveyed adults for the purposes of this survey). Interviewing for this CARAVAN® Survey was conducted October 14-21, 2020 by Engine Insights, which is not affiliated with Fidelity Investments. The results of this survey may not be representative of all adults meeting the same criteria as those surveyed for this study. Margin of error is +/- 1.79% at the 95% confidence level. Smaller subgroups will have larger error margins.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
It is never too late to start planning for your future or even planning for next week. Managing your finances in your 20s is an essential step in order to be better prepared for the years ahead. This article serves as a guide on how to get started to secure your financial future - today!
When you are in your 20s, there are countless things to worry about: Creating an independent life on your own is challenging, a work-life balance isn’t always easy to achieve, and maintaining a healthy lifestyle can be difficult. Beyond all of that, it is also necessary to manage your finances. Money for bills and other life necessities is one aspect, but it is also essential to plan for your financial future. While it is never too early to start working towards this, if you are not careful, you might start planning for your financial future too late. There are also the added benefits of early financial planning, forming smart money habits, and small amounts now growing into much more significant amounts in the future.
Even if you are starting with small investments, starting early will have considerable benefits in the long run. While small investments will begin with small returns for you, those small returns will begin to grow from compounding interest. Monitoring your investment accounts and ensuring your returns are adequately reinvested will gradually become a source of personal wealth.
You Need a Healthy Financial Portfolio
As you begin to invest, it is best to not look into only one investment opportunity. Creating a diverse portfolio of investments allows your wealth to grow even in volatile markets. Beyond that, it is vital to understand the immediate impact of your financial health. Your financial portfolio determines how much of a house you can afford. It also affects lines of credit and other large purchases.
Planning Now Means Less Stress Later
Establishing a financial portfolio with smart investments is more than an immediate benefit; it is also a step towards your long-term financial planning. While retirement seems like a long way off during your 20s, It will happen before you realize it, and an intelligent financial portfolio can help you get set for it. Not to mention, emergencies will inevitably occur in your life that will make planning even more essential. By having a healthy portfolio, you might not be able to fully prepare for them, but you can at least be prepared to pay for them with a lesser degree of stress.
It is never too late to start planning for your future or even planning for next week. Managing your finances in your 20s is an essential step in order to be better prepared for the years ahead.
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Want to reach your money goals? Here's a four-step process to achieve your dreams!
(BPT) - The new year is just around the corner and it’s never too early to think about your 2020 goals — and for many, this means prioritizing finances. Taking the time to focus on your goals and determine what’s important to you financially is the best way to set yourself up for success, but actually following through can be difficult. These easy financial exercises from Vanderbilt Mortgage will help you reach your goals in the new decade.
1. Outline your plan
If you don’t already have one, establish your plan. Write down short-term financial goals, such as creating a monthly budget, and long-term goals, such as paying off a debt or buying a home. Defining these goals will help as you set your budget for the next year.
2. Create a monthly budget
Gather pay statements, bills and bank statements to get started. You can write down all this information or use a budget tool. Start by calculating your monthly income, which includes not only the amount you may get from a regular paycheck, but also any money you get in government aid, child support or pensions. The next step is to look at your bills and bank statements to find out exactly what you spend in various categories of expenses such as utilities, auto, medical, personal, insurance, etc. This accurate information will empower you to take control of your spending.
3. Set a savings goal
Saving is another important aspect of financial health. Whether you’re using a general savings account, adding to an emergency fund, or setting aside funds for a new home, saving for larger financial goals helps you prepare and gives you peace of mind no matter where life takes you. If you’re new to saving, start small. Simply skipping your daily latte from the coffee shop a few times a week can add up quickly.
4. Stick to it
The statistics on how many people actually follow through and keep their New Year’s resolutions are rather bleak, but sticking with your financial goals will pay off. Stay on track by monitoring your progress each week. As you get closer to your goals, excitement will build and you’ll be motivated to keep budgeting and saving.
Vanderbilt Mortgage offers helpful online resources whether you are looking to purchase a new home or keep your current home in great shape. “Here at Vanderbilt, we want to use our years of experience to help current and future homeowners.” Said Eric Hamilton, President of Vanderbilt Mortgage, “Providing educational materials for every step of homeownership is one of the ways Vanderbilt is with customers every step of the way.”
Vanderbilt Mortgage and Finance, Inc., 500 Alcoa Trail, Maryville, TN 37804, 865-380-3000, NMLS #1561, (http://www.nmlsconsumeraccess.org/), AZ Lic. #BK-0902616, Loans made or arranged pursuant to a California Finance Lenders Law license, GA Residential Mortgage (Lic. #6911), MT Lic. #1561, Licensed by PA Dept. of Banking. Sponsored ad content from Vanderbilt Mortgage and Finance, Inc.
(BPT) - If you had to grade your financial literacy, what would it be? Are you an A+ saver, investor and planner, or do you think you could do better? If you grade yourself average at best, you’re not alone.
When asked to grade their own financial literacy, more than half of Americans say they’d earn a “C” or lower, according to new data from Prudential Financial. This isn’t surprising, considering data from Prudential’s Financial Wellness Census shows less than half of Americans are on track to meet their financial goals, including planning for retirement.
“Regardless of where you are on your family’s financial wellness journey, the best way forward is through financial literacy,” says Prudential Advisors President Brad Hearn. “Researching, educating yourself and getting advice from a financial professional can help you make the best decisions based on your life stage, risk tolerance and goals.”
Hearn says each family’s situation and goals are unique, and things like life stage and personal preference will impact how they choose to prepare for their financial future. To get started, here are five financial wellness basics every family should master:
Set up an emergency fund
Life is a series of experiences, and sometimes the unexpected can hit your finances hard. Whether it’s a car breaking down, your AC unit on the fritz or even losing a job, it’s important to be prepared for emergencies. If you don’t already have an emergency fund, start saving a little each month until you reach your goal. A good rule of thumb is to have three months’ worth of expenses saved in an emergency fund. So, if your monthly expenses are $2,500, you should have $7,500 saved.
Create a budget
Saving for college? A new car? How about starting that emergency fund? Whatever your family’s financial goals are, it’s important to have a plan in place that helps you achieve those goals. Budget to manage day-to-day expenses, and include in that budget a commitment to save for bigger milestones. For tips on getting started, do some research. There’s no shortage of advice, whether you decide to go it alone or consider using the help of a professional financial advisor.
Plan for the unimaginable
If you have people who count on you for financial support or caregiving, you should have life insurance. A life insurance policy can help give your family financial peace of mind should the worst happen. There is no rule as to how much life insurance you need, but important things to consider are your annual income, mortgage debt, potential college costs for kids and other future financial obligations.
Save for retirement
According to Prudential data, of Americans who have retirement savings and debt, nearly one-quarter have more in total debt than in retirement savings (23%), while 15% of Americans say that they have no debt, but also have nothing saved for retirement. Planning for retirement is something that should start as soon as possible. If your work offers any type of matching program, make sure to take advantage. If you don’t, you’re essentially leaving free money on the table.
Seek professional advice
Retirement, life insurance and savings can be confusing. Information overload is partly to blame. According to Prudential data, two-thirds of Americans agree that the list of things they need to learn to successfully manage their finances keeps growing, not shrinking. That’s where financial literacy programs and professional financial advice can play a key role. Nearly two-thirds of Americans don’t have a financial advisor. They say they cannot afford one (42%) or don’t believe their financial situation warrants needing an advisor’s help (26%). The reality is that advice is more within reach than ever before — and it’s not just for the wealthy. A financial professional can help at various stages in life and work with you to create a strategy based on your timeline, risk tolerance and goals.
“Financial wellness isn’t always a matter of having more money,” says Hearn. “Instead, it’s a journey that takes a combination of proactive effort, dedication and professional guidance.”
Prudential Advisors is a brand name of The Prudential Insurance Company of America and its subsidiaries. Life insurance is issued by The Prudential Insurance Company of America, Newark, NJ and its affiliates.
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