Americans would choose money over love in 2019, survey finds

The beginning of the new calendar year is the traditional time to make resolutions to change your behavior or habits. And although plenty of people will use this time to focus on their diet or fitness routine, many others are focused on one thing and one thing only: their finances.

Resolutions can provide some important insight into what fears are driving Americans to try to find solutions. That’s why GOBankingRates conducted a survey of some 1,000 Americans to get a sense of what financial resolutions they’re going to focus on for 2019. The results show that — despite a booming economy and record low unemployment — plenty of Americans are still concerned about their finances

RELATED: Check out these pieces of financial advice you can't afford to ignore:

14 PHOTOS
13 pieces of money advice you can't afford to ignore
See Gallery
13 pieces of money advice you can't afford to ignore

1. Pay yourself first

"People still don't grasp the fact that they need to save a dime out of every dollar," author and self-made millionaire David Bach told Business Insider in a Facebook Live interview. He said the average American who's saving money is saving just 15 minutes a day of their income, when they should be saving an hour.

Bach noted troubling research from the Federal Reserve that revealed nearly half of Americans wouldn't have enough money on hand to cover a $400 emergency. Yet, he continued, millions of those people will buy a coffee at Starbucks today and expect to buy the new $800 iPhone next year. Americans have money, he says, but we aren't saving it.

So get on the "pay-yourself-first plan," as Bach calls it, and automatically save an hour a day of your income. "When that money is moved before you can touch it, that's how real wealth is built," he said.

2. Beware of lifestyle creep

There's a lot of pressure in your 20s and 30s to keep up with your friends. Maybe they're buying a nicer car or a house, but if you're not in the financial position to keep up, don't try.

"I always refer to it as 'lifestyle creep' because one of the big things that people can do — that's an advantage to them — is keep their fixed expenses somewhat stable and reasonable for what they make," Katie Brewer, a Dallas-based certified financial planner who founded Your Richest Life, told Business Insider.

Planning for your recurring costs — like mortgage, rent, a car payment, and insurance — ensures that expenses won't creep up on you and derail your financial future. Of course, Brewer said, if you're making good money you should have the freedom to spend it how you wish, as long as your lifestyle doesn't overtake your income.

In short: Live below your means.

3. Take advantage of an employer-sponsored 401(k)

Putting money into a retirement plan as early as you can, no matter the amount, is a smart and easy way to pay yourself first.

If your company offers a 401(k) plan, take advantage of it. In some cases, employers will offer a contribution match. "That means the company contributes a set amount — say, 50 cents for a dollar — for every dollar you contribute up to a specified percentage of your salary," Beth Kobliner writes in her book "Get a Financial Life: Personal Finance In Your Twenties and Thirties."

"That's free money, equivalent to a 50% or 100% return. There's nowhere you can beat this!" she writes.

Plus, 401(k)s allow you to contribute your pre-tax money, meaning the more you contribute now, the greater the growth (thanks, compound interest) and the more money you'll have down the road, though you will be taxed when you withdraw the money for retirement. For 2017, the maximum contribution to a 401(k) is $18,000.

4. Invest in the stock market, just don't try to time it

"No one can time the market, so know that if there is a decline, it's going to bounce back. Over time, being in the market pays off more so than staying out of it," Michael Solari, a certified financial planner with Solari Financial Planning, told Business Insider.

A smart play, according to Solari, is to put your money in a low-cost target date retirement fund.

Sometimes known as "set it and forget it" investments, these diversified funds automatically adjust their asset allocation and risk exposure based on your age and retirement horizon. Early on, when the need for that money is still a couple decades away, the fund will adopt a more growth-focused strategy. As you ripen toward retirement, it dials back the risk.

You may not get the average annual return of 11% in your target date fund — given you'll be invested in a blend of stocks, bonds, and alternative assets — but if you get even 6% per year, an original $10,000 investment will be worth more than $32,000 in 20 years without you having to do a single thing. Compare that with $12,200 in your high-yield savings account or $10,020.20 in your traditional savings account.

kid put coin to piggy bank on the vintage wood background, a saving money for future education concept and copy space for input text.

5. Build an emergency fund

Let's face it: It's really not a matter of if you'll need to fork over cash for a car or home repair, child expense, or medical emergency, but a matter of when.

"No matter how well you plan or how positively you think, there are always things out of your control that can go wrong," Bach writes in his bestseller "The Automatic Millionaire."

"People lose their jobs, their health, their spouses. The economy can go sour, the stock market can drop, businesses can go bankrupt. Circumstances change. If there's anything you can count on, it's that life is filled with unexpected changes," he wrote.

Most financial planners suggest stockpiling anywhere from three to nine months worth of expenses in an emergency fund that you can turn to when in need. If you don't have savings at the ready, you run the risk of having to rely on family or friends for help, or worse, falling into debt.

6. Pay off your credit card balance in full every month

Sometimes a credit card can feel like free money, until you're slapped with the bill. Even then, most credit cards only require you to pay 1% to 3% of your balance each month, which can be an alluring prospect if your budget is tight. But consistently paying the minimum could cost you a fortune in the long run, damage your credit score, and affect your ability to qualify for a mortgage.

Farnoosh Torabi, a financial expert, author, and host of the "So Money" podcast learned this lesson the hard way.

Not only did she swipe her credit card with no reservations and adopt the bad habit of paying just the minimum amount — Torabi said she once forgot to pay the bill all together.

She remembered incurring a late fee that showed up on her credit report and gave her a true "wake-up call." The incident happened before she "realized the power of automating" her bills, a practice that can save you money on late fees and relinquish you from remembering due dates and the embarrassment of missing a payment.

7. Don't sit on too much savings

Saving money is important — and could be easier than it sounds — but if you're saving too much, you may be keeping yourself from building wealth.

Though you're "never going to kill your financial future" by accumulating money, Brewer says, "you're losing out on opportunity costs by having money sitting around ... especially if it's sitting in an account making barely anything in interest."

If you're risk-averse, one way to manage savings overflow is to move your money into a high-yield savings account, where you could be earning 1% interest on your money, rather than the 0.01% earned in a traditional savings account. Or, as previously mentioned, stick it in a low-cost target date fund and see your returns balloon over time, with little to no work required.

8. Have more than one credit card

It may seem financially reckless to have a wallet full of credit cards, but it's actually smart. According to John Ulzheimer, credit expert at CreditSesame.com, having a single credit card can damage your credit score, thanks to something called your credit utilization ratio — that is, how much of your available credit you're actually using.

"That percentage is very, very influential in your credit score," explains Ulzheimer. "People say that you're in good shape if you keep your utilization within 50% of your available credit, or 30%, but really, it should be below 10%."

Available credit counts all the cards you have: If you have one card with an $8,000 limit and one with a $6,000 limit, your total available credit is $14,000, even if you only spend $1,000 a month. With a single card, you have no unused credit cushioning the impact of your spending. The closer you get to your limit, the harder the hit on your credit score.

9. Pay off high-interest debt first

Sallie Krawcheck, a former Wall Street executive and the founder and CEO of Ellevest, says paying down high-interest debt should always be prioritized, even above building an emergency fund.

She explained the math in an article on Ellevest:

"Say you have $5,000 of credit card debt at an 18% interest rate. Say you happen upon $5,000 of money. If you take some of the advice out there, and split the use of that $5,000 (half to establish an emergency fund, half to pay down credit card debt), you still have $2,500 of credit card debt and $2,500 of money sitting in cash.

"The $2,500 of credit card debt at an 18% interest rate costs you $450 a year. The emergency fund earns almost nothing in interest. So you're out $450."

Bottom line: You'll save more paying off the debt than you'd earn if you invested it, whether in a high-yield savings account or the stock market.

10. Always be insured

Every American citizen is required to have health insurance, or be fined hundreds of dollars by the IRS each year. Kobliner advises signing up for insurance should be "your No. 1 financial priority" because it'll protect you from unforeseen accidents or illness, and prevent yourself or your family from going bankrupt in the case of an emergency.

If your employer offers health insurance, take it, Kobliner says. It's almost always cheaper than buying a policy on your own (but keep in mind that you can be covered by your parent's insurance until age 26). Before signing up, though, make sure you understand the cost and extent of the plan, including your deductible, or how much you'll be paying out-of-pocket before insurance takes over.

If you do end up needing to purchase a policy on your own, head over to healthcare.gov to compare plans and pricing.

11. Track your spending

Business Insider's Libby Kane has written, edited, and read hundreds, maybe thousands, of stories about money during her career, and says she's learned that "the best, most critical first step you can take to improve your finances is to track your spending."

Keeping tabs on where your money is going, whether fixed expenses like rent or mortgage payments and transportation costs or discretionary spending like dining out and travel, is a crucial part of mastering your money.

Setting up a spreadsheet or using a service like LearnVest or Mint can help you make cuts where necessary and even set you on a path to early retirement, if that's what you're after.

12. Pay your taxes — and be smart about it

"Whether you owe money to the tax man at the end of the year or not, it's always a smart move to file your taxes," Kobliner advises. 

And be aware that you can save money on taxes by taking advantage of deductions, or the specific expenses you're allowed to take out of your income before calculating your owed taxes. The standard deduction — $6,300 for singles and $12,600 for couples — is a good place to start, Kobliner says.

You can also itemize deductions to maximize your savings by listing specific deductions, including expenses for housing costs like mortgage interest or property taxes, and charitable donations, or making use of tax credits.

And if you don't file your taxes? You could pay a penalty fee of at least $135, plus interest on the money you owe, and lose ground on your credit report, among a host of other financial consequences.

13. Be patient

When bestselling author and motivational speaker Tony Robbins asked billionaire Warren Buffett a few years ago, "What made you the wealthiest man in the world?" Buffett replied, "Three things: Living in America for the great opportunities, having good genes so I lived a long time, and compound interest."

"The biggest thing about making money is time," the investor, who's now worth more than $76 billion, said in a recent HBO documentary about his life. "You don't have to be particularly smart, you just have to be patient."

In his latest letter to Berkshire Hathaway shareholders, Buffett announced that he was on his way to winning a $1 million bet he made in 2007 that his investment in an S&P 500 index fund would outperform five hedge funds over a decade.

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

 

A Quarter of Americans Are Worried About Their Finances in 2019

About one in four people polled responded that they’re worried about their finances in the coming year. And even that belies people’s worries as the 13-17 age group — many of whom are probably still living at home and attending high school — only had about one in 10 say they were worried about money. For people aged 35-44 and 55-64, it’s more like one in three people revealing concerns about the state of their financial lives.

Women, meanwhile, are definitely more concerned about the issue than men. Some 29 percent of women answered that they’re concerned about their finances compared to just 22 percent for men.

Which Americans Are the Most Worried About Their Finances in 2019?
Age/Gender% of Respondents Who Are Worried
Ages 13-179%
Ages 18-2426%
Ages 25-3429%
Ages 35-4433%
Ages 45-5430%
Ages 55-6432%
Ages 65 and Over25%
Men22%
Women29%

Many Americans Worry About ‘Not Having Enough to Get By’ in 2019

For those Americans who are worried about their finances, worrying about having enough money to get by is the most common response from those polled — overall and in each individual age group save for 55-64, where rising healthcare costs edged it out by a single percentage point. Worrying about not having enough to get by was most common for those in the 25-34 age group at 40 percent, but at least about one in three people or more cited the issue as a concern in each of the other groups.

Americans’ Biggest Financial Worries for 2019, by Age and Gender
 Falling Into DebtNot Having Enough Money to Get ByLosing a JobLosing a House, Car or Other Major AssetLosing Money in the Stock MarketRising Healthcare CostsHaving to Pay More in TaxesOther
Ages 13-178%30%12%11%7%7%12%3%
Ages 18-2424%34%14%7%7%12%12%2%
Ages 25-3432%40%16%14%6%26%25%1%
Ages 35-4429%39%13%11%7%25%17%3%
Ages 45-5428%39%18%8%11%37%21%2%
Ages 55-6421%34%8%8%16%35%16%4%
Ages 65 and Over19%31%5%5%8%24%17%2%
Men20%29%13%7%9%19%15%2%
Women26%41%12%12%7%25%19%3%
Survey respondents could select all that apply.

Rising healthcare costs were also a major concern. The 55-64 age group had that as its most common response, but they were actually the second-highest response rate for that answer with the 45-54 age group coming back with 37 percent of respondents saying they were worried about the cost of healthcare.

Worries about debt and healthcare costs were indirectly related, as young adults were more concerned with debt, giving way to worries about healthcare being more prominent among older adults. About one in three Americans aged 25-34 cited going into debt as a concern, but that rate decreased in each older group. Healthcare cost worries increased, though, with each age group up to the 45-54 group, then decreased only slightly for 55-64 before dropping to 24 percent for those 65 and over — probably a function of the availability of Medicare to senior citizens.

Find Out: Here’s Why Americans in Every State Can’t Save More Money

Focusing on gender, women were markedly more concerned about finding a way to make ends meet, with worries about finding money to get by being cited by 41 percent of respondents compared to a rate of just 29 percent among men. The only other category with such a notable gap was concerns about rising healthcare costs, where 25 percent of women are worried compared to just 19 percent of men.

More Than One-Third of Americans Want to Save More Money Next Year

As for what Americans are planning on changing in regard to their finances in 2019, the most common response was both simple and direct: save more money. Over one in three respondents said saving more money was their financial resolution for the new year. The next most common response was to pay off debt, something that just under one in four people answered was their plan for the next year.

Saving more money was definitely a much more common answer for younger people, as about half of respondents under the age of 34 included that as their planned resolution. Paying down debt, meanwhile, is not a major concern the 13-17 age group — as one might hope — but it jumps to 20 percent for the 18-24 age group and is about 30 percent for each older bracket save for those aged 65 or over.

Americans’ Financial New Year’s Resolutions for 2019, by Age and Gender
 Save More MoneyPay Off DebtInvest MoreBuy a HouseFind a New Job/Increase My IncomePut More Money Toward RetirementStick to a Monthly BudgetOther
Ages 13-1747%5%11%7%15%4%11%4%
Ages 18-2444%20%10%5%18%4%24%1%
Ages 25-3450%30%14%14%28%11%21%1%
Ages 35-4432%33%14%14%17%12%17%0%
Ages 45-5430%28%7%9%17%14%14%4%
Ages 55-6423%29%8%2%7%13%17%2%
Ages 65 and Over18%21%4%8%1%8%18%1%
Men28%23%9%9%13%10%14%2%
Women44%23%10%8%17%9%21%2%
Figures represent percentage of respondents who chose each answer option for the question, “What will be your financial New Year’s resolution(s) for 2019?” Survey respondents could select all that apply.

For women, though, saving more money is a much higher priority as a New Year’s resolution than it is for men. Some 44 percent of women said that was their planned resolution compared to just 28 percent of men. Much of that gap, though, appears to be made up of men who don’t see a need to make a resolution: 37 percent of men said they wouldn’t be making a financial resolution for the new year compared to just 24 percent of women.

Americans Want to Save More Than $26,000 in 2019

But how much are people planning to save for the new year? The average savings goal in the survey was just over $26,000 — an impressive figure given that the national median salary is just $55,322.

Much of that is driven by a number from younger Americans that is most likely wildly optimistic. The average savings goal of those aged 13-17 — a group where one would expect full-time work to be relatively rare — was a whopping $39,221. That figure doesn’t fall far for young adults, though. Each age group through age 44 gave an average savings goal of at least $30,000 for 2019, dropping to just over $25,000 for ages 45-54 before falling below $10,000 for those 55 and older.

Americans’ 2019 Savings Goals, by Age and Gender
Age/GenderAverage Savings Goal
Ages 13-17$39,221
Ages 18-24$33,315
Ages 25-34$30,869
Ages 35-44$33,515
Ages 45-54$25,177
Ages 55-64$6,604
Ages 65 and Over$7,077
Men$30,984
Women$21,421

At the end of the day, though, those figures are probably unrealistic. For starters, based on the 50-30-20 budget rule that allocates 20 percent of your income to savings, you would need to be making $130,000 a year after taxes to hit a savings goal of $26,000 in 2019. What’s more, previous GOBankingRates surveys have found that — regardless of what people are hoping to accomplish — the reality when it comes to saving money isn’t nearly as good. The 2018 Retirement Survey found that some 42 percent of Americans have less than $10,000 saved for retirement, and the savings survey found that a whopping 58 percent of respondents have less than $1,000 in savings.

Saving Money Is a More Popular Goal Than Finding Love, Traveling and More

So how does putting away more of your income rate as a New Year’s resolution? Highly.

The GOBankingRates survey also asked respondents to name their lifestyle New Year’s resolutions, such as traveling, finding love and exploring a new hobby. More than one-third of respondents said they are resolving to get in shape, and about one-quarter said they plan to spend more time with family and friends.

But when comparing the percentage of people who chose financial resolutions versus lifestyle resolutions, the survey found some financial goals outweighed the lifestyle goals. For example, a higher percentage of respondents said they wanted to save more money than said that they wanted to learn a new skill or hobby, quit a bad or unhealthy habit or even find love.

Saving Money vs. Lifestyle New Year’s Resolutions
2019 New Year’s Resolutions% of Respondents Who Chose This Resolution
Save More Money36%
Donate or Volunteer More8%
Find Love12%
Travel More17%
Quit a Bad or Unhealthy Habit19%
Explore a New Skill or Hobby20%
Spend More Time With Family and Friends24%
Get in Shape/Eat Healthier37%
Survey respondents could select more than one answer choice.

Getting in shape/eating healthier was the only resolution with a higher response rate than saving more money, and it just edged it out at 37 percent of responses to 36 percent.

Don’t Do It: 10 Really Dumb Ways Americans Waste Money

Making Changes in Your Financial Life Can Be Easier Than You Think

The fact that so many people have major concerns about their financial picture might come as a relief to many who were worried that they were alone, however, the other good news is that some simple strategies can make saving more money an easy resolution to meet.

There’s an abundance of solid budgeting apps you can download to your phone or access online that make tracking your spending and expenses simple. You can also make plans to budget your saving into your monthly or weekly routine. Saving the recommended 20 percent of your income can be easier for some if they simply make that saving a priority they meet before other costs each paycheck. What’s more, apps like Chime or Qapital can set up regular, automatic transfers to savings and don’t require any action on your part. You can even use investing apps like Stash or Acorns to turn those recurring automatic donations into investments in stocks or bonds.

A separate GOBankingRates survey found that a quarter of Americans are confident they’ll be rich one day, but many of them aren’t taking the necessary steps to get there.

More from GOBankingRates:  
This Is the No. 1 Thing Americans Are Saving for (and It’s Not a Home) 
Most Americans Lack Savings to Pay for These Huge Emergencies 
It’s Cheaper to Own Than Rent a Home in These 27 Cities, Study Finds

Methodology: This survey was commissioned by GOBankingRates and conducted by Survata. Survata interviewed 1,002 online respondents between Nov. 16, 2018, and Nov. 19, 2018. Respondents were asked the following questions: 1)  What will be your financial New Year’s resolution(s) for 2019? Select all that apply. 2) What will be your lifestyle New Year’s resolution(s) for 2019? Select all that apply. 3) For this upcoming New Year, is it more important for you to stick to your financial goals or your lifestyle goals? 4) What is your overall target savings goal for 2019? 5) Are you worried about your personal finances in 2019? 6) Which of the following worries you when it comes to your finances in 2019? Select all that apply.

This article originally appeared on GOBankingRates.com: Americans Would Choose Money Over Love in 2019, Survey Finds

Read Full Story