At a Glance
2020 felt like a warm-up to the challenges 2021 would bring. Despite vaccine rollout, we dealt with the impact of several COVID-19 variants. On the job market front, The Great Resignation had companies struggling to attract and retain talent while adapting to permanent remote and hybrid work models. Student loan debt ballooned to record highs with 45 million borrowers owing $1.7 trillion.
But our 2022 Financial Goals report shows that despite the rollercoaster that was 2021, including market fluctuations, rising inflation, and continued uncertainty around the pandemic, Americans are still meeting their financial goals – and younger generations are optimistic about the future. The survey of 1,257 people was conducted by YouGov Plc on behalf of Credello in December 2021.
Key findings about financial goals
- Almost half of Americans were able to reach their financial goals: 4 in 10 Americans (42%) were able to complete at least some of their financial goals, and 20% were able to complete all of them.
- Spending less on food, entertainment and travel helped: 38% of respondents said they were able to save more due to spending less on entertainment and activities such as dining out, concerts, or going to the movies. And 34% said they were able to save more due to spending less on travel.
- Financial planning, stock market investments and salary increases: 33% of Americans said they made a financial plan/budget, while 22% said they invested wisely in the stock market. And 20% increased their salary – with the Great Resignation in full swing, it was a good time to negotiate.
- Debt is still a concern: Of those who did not complete their financial goals in 2021, nearly 3 in 10 noted that they spent more than their income allowed and took on debt. And not paying down debt was the biggest financial regret of 2021, especially for those who weren’t able to meet their goals. (apparently, they weren’t aware of debt consolidation loan options.)
- Gen Z is optimistic about crypto: Younger Americans are weary of traditional stock market investments, with only 7% of people aged 18-34 investing in the stock market vs. 33% of those aged 55+. However, the younger age group believes that cryptocurrency will improve their financial standing, with 23% of respondents expressing confidence in crypto investments.
- Younger Americans are also confident about their earning potential: Those aged 18-34 were more than 4 times as likely to cite that a new job with better salary will help them improve their financial position.
- Hope still prevails: Concerns about rising inflation and economic growth remain high, but 1 in 3 Americans feel hopeful that their financial standing will be better in one year than it is today. And younger Americans are even more likely to feel hopeful than their older counterparts (38% compared to 32% of those aged 35-54 and 26% of those aged 55+).
Avoiding and restructuring debt may be key to meeting goals
Our report shows that to meet financial goals, there are several things you can do to avoid taking on debt, pay down any existing debt and grow your savings. Making a budget, cutting down on variable expenses, increasing your salary and investing in the stock market helped people meet their yearly financial goals. Debt restructuring is also key: 11% of those who were able to meet their financial goals in 2021 noted that they were able to do so because they restructured their debt payments.
Men more likely to favor investments to improve finances
While women were almost as likely as men (24% vs. 29%) to favor conventional investments such as CDs, index funds, stock funds and mutual funds, they were a little less inclined to buy cryptocurrency, with 18% of men believing that cryptocurrency investments will improve their financial standing vs. only 8% of women. Men also had more confidence in real estate, with 21% of men believing that purchasing a primary residence will improve their finances vs. 14% of women.
Concerns about inflation and the economy remain high
Half of Americans are still planning on setting financial goals this year, though concerns about rising inflation and economic growth remain high. In the year ahead, the top concern for Americans in all age groups is rising inflation. The other most pressing concerns include economic growth affecting the ability to grow savings, as well as worrying about economic growth affecting the ability to pay down debt.