Study: Most Americans say they’re optimistic about a brighter financial future in 2021

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 percent 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 percent of Americans are considering a financial resolution for 2021, which is down marginally from last year (67 percent), 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 percent of all Gen Z and Millennial respondents considering a financial resolution compared to 59 percent 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.

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 percent) of people working with a financial professional were able to stick to their financial resolution in 2020, compared to just half (50 percent) of those who did not work with one.