As Americans look to the new year and navigate different phases of life, adults surveyed reported COVID-19 being a key influence on their financial outlook
Generations report different confidence levels and financial goals for the new year
NEW YORK, January 25, 2022–(BUSINESS WIRE)–As Americans look to the future with their finances in mind, many are beginning the new year with hope or a sense of feeling “on track” toward a goal or lifestyle, with some feeling a sense of uncertainty. The latest New York Life Wealth Watch survey found that when asked how they were feeling about their finances going into the new year, nearly 40% of adults surveyed reported feeling “hopeful,” 1 in 4 (25%) reported feeling “on track towards a goal/lifestyle” and 28% reported feeling “uncertain.”
COVID-19’s Impact on Finances
COVID-19 has impacted how people across every generation build a financial strategy. When thinking about the new year, nearly half of adults (46%) say that the COVID-19 pandemic is now a factor when considering their financial strategy. In fact, COVID-19 has shifted the emphasis from a holistic financial strategy – that incorporates both long and short-term goals – to a more near-term oriented one, with many adults reporting focusing on short-term goals like building an emergency fund (38%), paying off credit card debt (31%) and paying for a vacation (27%).
Those who reported feeling the most confident in meeting their financial goals also reported having savings (46%), having a strategy in place (42%), and having success in managing debt (37%).
“Across the board we have seen COVID-19 impact financial futures and daily lives; now Americans are trying to evaluate and reprioritize their financial outlook. We see younger generations are beginning to understand the importance of building a sound financial strategy early, with nearly a third of Millennials and a quarter of Gen Zers looking for financial guidance,” said Aaron Ball, Senior Vice President, Head of Insurance Solutions, Service and Marketing, New York Life. “Even if they don’t know exactly where to start, the new year provides an opportunity to revisit their goals and priorities.”
Generational Differences Influence Priorities
Generations have unique needs and goals, with Gen Xers – the next cohort to retire – reporting lower levels of confidence in their retirement savings and strategy, with over half (53%) of Gen Xers feeling less prepared compared to their peers. The shift may be attributed to perceived higher living expenses in 2022, with nearly two-thirds (64%) of Gen Xers expecting their living expenses to be higher. Significant numbers of Gen Xers also reported concern about inflation (58%) and healthcare costs (43%).