Americans know they did not save enough in 2019, but many are planning to do something about it in 2020 if a new study from Principal Financial Group is any indication.
Principal’s just-released Holiday Spending & 2020 Outlook shows that “Not Saving Enough” continues to be Americans’ top financial blunder by a wide margin, cited by 22% of respondents this year just as in 2018.
That’s twice as high as the next most common financial blunders, “not budgeting properly” and “accumulating credit card debt,” which both were cited by 11% of respondents. “Spending outside my means” was the next biggest blunder (10%).
Notably, 2% of respondents said “taking out a 401k loan” was their biggest financial blunder, same as in 2018. And 4% said “investing too little in my retirement” was their biggest blunder, again unchanged from last year.
But as the time for making New Year’s Resolutions approaches, the survey also found that saving—and saving for retirement specifically—weighs heavily on the minds of Americans as 2020 nears.
Per the study, the top personal finance resolutions being made this December are to:
- Save more each month (45%)
- Reduce spending each month (38%)
- Pay off credit card debt (33%)
- Build an emergency fund (30%, up from 24% in 2018)
- Save more for my retirement (21%)
Each of the first four most common financial resolutions would seem to eventually help No. 5, “save more for retirement,” be more likely to occur at some point.
“The new year is a great time to re-evaluate your financial situation and take tangible steps toward better habits,” said Reddy. “There’s no secret sauce to spending versus saving, but the more consumers can consider how both fit into their lives, the better the potential financial outcomes in 2020.”
Americans remain optimistic about 2020, with more than half (52%) saying they’re somewhat or extremely optimistic about the 2020 economic outlook.
Despite the sunny disposition, concerns remain, including: health care changes (40%), gas prices (35%), food prices (35%), 2020 elections (34%), and political uncertainty (28%).
2019 holiday spending
The study found 67% of Americans are spending the same or more than last year’s holiday season, with more than half (57%) planning to spend less than $500 on gifts.
Significantly more men (17%) say they will spend more this year than women (9%), and 37% of women said they plan to spend “significantly less” this year than men (30%).
Significantly more Millennials (19%) plan to spend more this year than both Gen X (10%) and Boomers (8%).
Americans also say they are making smart choices to manage their money during the holidays. Fifty-six percent plan to set a budget for holiday gifts and 29% have saved for gifts throughout the year. These strong saving habits, the survey report says, are reflected in low stress levels, as 69% say the holidays put little to no stress on their personal finance situation.
“The holidays are a great time to give your loved ones something special, but the expenses add up pretty quickly if you’re not yet prepared on how to manage costs,” said Sri Reddy, senior vice president of retirement and income solutions at Principal. “Strong savings habits throughout the year can make a big difference in how you finish 2019 and head to 2020.”
2019 budget-busters
While holiday spending and savings are looking strong, Americans still identified a number of places they broke the bank in 2019, including:
- Dining out (27%)
- Food/groceries (24%)
- Entertainment (19%)
- Clothing/apparel/shoes (16%)
- Vehicle expenses (16%)
Principal’s Holiday Spending & 2020 Outlook results come from a Nov. 4-6 online survey of 1,002 U.S. consumers over the age of 18.