Americans are looking ahead to a year of “living practically,” according to Fidelity Investments 2025 New Year’s Financial Resolutions study, released this week.
“Adopting a sensible perspective can have a positive impact as Americans look to move from simply spending to building up a savings buffer.”
Sangeeta Moorjani, Fidelity Investments
While continuing to feel the impact of inflation and the high cost of living, the new research finds the majority of Americans are entering 2025 sensibly, with nearly two-thirds (65%) considering a financial resolution for the year ahead.
“Understandably, financial pressures continue to weigh on the minds of many Americans, so having a practical mindset to 2025 will aid in building financial goals for the new year,” says Sangeeta Moorjani, head of Tax-Exempt Market and Lifetime Engagement at Fidelity Investments. “Adopting a sensible perspective can have a positive impact as Americans look to move from simply spending to building up a savings buffer.”
The study, which has been conducted for the past 16 years, shows a third (33%) of those considering a financial resolution are pursuing more conservative goals for 2025 given events of the last couple of years. An increasing number are only considering goals within their control (29%). Unexpected expenses moved up to the top financial concern for Americans in the coming year (38%), although inflation and its impact on day-to-day expenses and savings continues to be a major challenge for individuals (37%), followed closely by economic uncertainty/recession (32%).
Despite these financial concerns, many Americans also are feeling a renewed sense of optimism heading into the new year. According to the study, 68% feel they are in the same or a better situation than last year and 65% believe they’ll be better off financially in the new year.
Emergency savings a top focus
Part of this focus on living sensibly can be attributed to the fact that more than half (53%) of Americans feel overwhelmed by their personal finances and nearly one-third (30%) describe their relationship with money as stressful. When thinking about last year’s financial resolutions, among those who were unsuccessful in keeping them, 39% were not able to stick to it because they had less money due to inflation’s impact on day-to-day expenses.
Compared to recent years, many Americans are also feeling more stressed about their:
- Ability to pay monthly bills (35%)
- Having money left over to save for other goals after paying monthly bills (36%)
- Ability to pay down debt (33%)
- Having enough retirement savings to retire as planned (32%)
This stress is understandable, when one considers the fact that nearly 3-in-4 Americans (72%) report experiencing a financial setback this year. To handle setbacks, nearly half (46%) were forced to dip into emergency savings at some point over the last year. The women who had an emergency savings fund to dip into were fortunate, as significantly more women (30%) than men (19%) indicated they didn’t have an emergency fund to dip into at all.
One-in-five respondents (20%) say having an unexpected non-health emergency—like a car repair or home repair—could set them back financially in the coming year. With this in mind, perhaps there’s no surprise that 79% of respondents plan to build up their emergency savings—most notably 80% of women.
Resolving to be different in 2025
Of those Americans considering a financial resolution in the year ahead, the top resolutions remain consistent with years past: save more money (43%), pay down debt (37%), and spend less money (31%).
Among Americans considering ‘save more money’ as one of those financial resolutions, most are focused on short-term savings goals in the coming year—including credit card debt, emergency savings, mortgage payments, and big-ticket purchases—more than long-term goals (including retirement, college savings, health care, and long-term care) (55% vs 45%). This is a shift from the 2024 study, where long-term goals were more of a top priority for respondents. Fortunately, recent Fidelity data on workplace retirement savings suggests that, at least so far, this increased focus on short-term financial goals is not coming at the expense of long-term savings.
The good news is that the majority of respondents (72%) have a plan in place for reaching their financial goals. In fact, most Americans believe having a financial plan can help them to better deal with the unexpected (80%) and have learned to practice mindful spending and saving habits (78%).
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