PHOENIX — In 2023, 53% of Americans are setting New Year’s resolutions relating to money, according to a survey conducted by Affirm.
In early November, Affirm, a buy-now-pay-later option for retail purchases, surveyed over 1,000 customers throughout the U.S. to get a sense of how consumers were feeling ahead of the holiday season.
“So as that relates to resolutions, just like the holiday season, finances are definitely top of mind for consumers as they prepare for the new year,” said Katrina Holt, a financial health expert at Affirm.
According to the survey, saving money is the number one New Year’s resolution for 42% of Gen-Z-ers, and 28% of millennials.
Focus on spending power is what differentiates the two generations’ mindset toward money, according to Holt.
“Gen-Z-ers just overall have less spending power,” Holt said. “They're earlier in their career, they haven't saved up for the emergency savings fund. They're working through a high inflationary environment.”
In June of 2022, inflation reached a record high of 9%. The inflation spike, according to Holt, is one of the reasons Americans are becoming more budget conscious.
“What we are seeing in the survey, and we're seeing it come through in the actual data, is that people are being far more intentional this year about how they are spending,” Holt said.
To help consumers analyze their spending habits, Holt suggests auditing monthly expenses to see where money is coming and going.
“Go through and make sure you understand what expenses that you have and write them all down,” she said. “Tie it to your income. How much income do you have coming in? How much do you want to set aside for savings? How much do you want to set aside for potentially giving? And then what's left to fit within your budget? Is the easiest, not overcomplicating, simple way to do it.”
She also recommends creating a budget, but not for the entire year. Instead, Holt uses “touchpoints” throughout the year.
“The timing of the touch points is really person dependent in terms of how tightly you want to manage that budget,” Holt said. “But I think the thing to remember is that a whole year of thinking about what are you going to need to spend on. What are you going to need to save on, what will the price of things be? What will be your current income? All of those things change pretty frequently, as we have seen over this last year.”
Brian Larson, the Vice President and Northwest Arizona Retail Division Manager at WaFd Bank, recommends looking for places within a budget where it’s possible to save, suggesting consumers look at their insurance policies.
“I know we're getting bombarded with insurance commercials that promise the world, right? But there is some truth in that,” Larsen said. “You can save $50 to $100 a month. It is very likely that you can do that, just by going ahead and shopping your insurance package.”
Larsen also suggests opening a savings account and treating deposits into the account like a bill that needs to be paid.
“Just make sure you can't access that money directly with a debit card,” he said. “So, the idea is to treat it as a bill, instead of as something as a savings, a way to keep thinking about it [is]: It’s just a bill. Put the money away.”