Survey: Nearly 2 in 3 Americans Do Not Expect Personal Finances to Improve in 2023
A new Bankrate report found that only 34 percent of Americans expect their personal financial state to improve in 2023, leaving nearly two-thirds who do not expect their finances to improve. Of the latter group, 29 percent expect their financial situation to get worse, and 36 percent expect it to stay about the same.
“Inflation is the runaway reason people feel that way, by more than a 2-to-1 margin over any other factor,” said Greg McBride, Bankrate’s Chief Financial Analyst. “Inflation is high and there isn’t a lot of optimism that it will come down in a meaningful way. Even among those expecting their finances to improve in 2023, just 19 percent felt that would be due to lower inflation.”
For those who do not think their finances will improve, continuing inflation was the main reason why at 63 percent. Other reasons include work done by elected officials at 29 percent, stagnant or reduced income at 27 percent, changing interest rates at 25 percent, and the amount of outstanding debt at 18 percent.
Of those expecting financial improvement, only 19 percent said it would be due to lower levels of inflation, which fell significantly behind reasons like increased income (41 percent), having less debt (30 percent), and changes in life circumstances (25 percent).
Younger generations are more optimistic about their financial situations, as almost half (48 percent) of Gen Z and millennials expect their finances to improve, compared to 32 percent of Gen X and 39 percent of baby boomers. Regardless of age and income level, the top financial goal for this year is paying down debt.
“Americans’ financial goals reflect an expectation of tougher times to come,” said McBride. “With households focused on paying down debt, budgeting better, and saving more for emergencies in 2023. High inflation and rising interest rates are squeezing budgets while the additional savings compiled during the pandemic are depleting, highlighting the course corrections Americans are looking to make with their finances.”