A recent Bankrate Financial Outlook Survey found that while most respondents don’t expect their finances to improve next year, there is growing optimism that things are improving.
Upward Trajectory
Despite the fact that less than half of those surveyed believe their financial outlook will improve, there is some good news. The percentage of respondents that expressed optimism rose to 44%, a 7 percent increase from 2023’s survey. It’s even more impressive when you consider that these figures were 34% and 21%, respectively, in 2022 and 2021.
Inflation Worries Wane
One driving force behind this increased optimism is lessening concerns over inflation. Since inflation reached a 41-year record high in 2022, the Federal Reserve has taken measures to bring that number closer to its target of 2%. November reports put the Consumer Price Index (CPI) at 2.7%. Even among those who remain pessimistic, fears over inflation’s impacts have dropped 17%.
Gen Z’s Optimistic Outlook
Respondent’s perceptions of their 2025 finances vary by generation. Leading the optimistic charge is Gen Z (ages 18-27), with a majority 55% feeling that their economic outlook will improve in the coming year. Millennials (ages 28-43) come in next at 49%, followed by Gen X (44-59) and Baby Boomers (60-78) at 38% and 37% respectively.
Financial Goals
The most common financial objective of those surveyed was paying down debt (21%). With credit card interest rates near all-time highs and half of all Americans carrying a balance from month to month, that expensive debt is weighing on households’ bottom lines. Beefing up the emergency fund is next on the list with 12% aiming to put more aside for those unexpected expenses.
Shifting Attitudes
While many in the financial industry have been touting the economy’s resilience and recovery, not all Americans shared that perception. Despite cooling inflation rates, prices for goods, housing, and services remain significantly higher than pre-pandemic levels. We continue to feel the pinch at the grocery store, gas pump, and in rent/mortgage costs, which erodes confidence. But, as the survey indicates, our attitudes might finally be shifting.
Plan For The Future
No matter what the future holds, you need to be prepared, and the New Year is an ideal time to get ahead. To make meaningful progress in 2025, schedule a free appointment with an FRC® trained advisor who will take time to thoroughly evaluate your current financial situation, set new goals, and create a financial plan.
