Nearly two thirds of Americans (63 percent) do not expect their personal financial situation to improve in 2024, according to a new Bankrate survey. In fact the survey found more than 1 in 4 (26 percent) believe their financial situation will get worse in the new year. 

Americans predominantly blame inflation and stagnant wages for their negative financial outlook with 61 percent of Americans who say their finances won’t improve next year with a majority (22 percent) citing high inflation as the culprit. 

Other reasons Americans are expecting a negative financial outlook in 2024:

• Debt (19 percent)
• Low earnings from savings or investments (16 percent)
• Change in life circumstances (16 percent)
• Don’t know why (10 percent)
• Bad spending habits (9 percent)

Although inflation is cooling, economists say the prices of goods like food and gasoline remain higher than Americans are accustomed to, which is why they may not be feeling immediate relief. That financial relief, or lack thereof, is what many Americans are judging their financial outlook on, Bankrate found.

Prices are “still notably higher than just two or three years ago, and that is what households feel,” McBride says. “The rate of inflation may be coming down, but prices generally are not.”

For the nearly two-thirds of Americans who do not expect their financial situation to improve in 2024, a majority, 38 percent, think their financial situation will stay as is in the new year, while roughly 1 in 4 (26 percent) expect their finances to worsen in 2024. 

Of the 26 percent expecting their finances to worsen in the new year, 16 percent see their finances getting somewhat worse, while 9 percent see their finances worsening significantly.

“High interest rates, widespread layoffs and staggering inflation at the grocery store are all real pressures folks currently feel,” says Anna N’Jie-Konte, CFP and president and director of financial planning for Re-Envision Wealth. “There is no relief in sight; therefore, it’s not hard to understand why Americans are pessimistic about their personal financial prospects.”

Even though the financial outlook seems bleak for a majority of Americans, it’s actually an improvement compared to 2023 with 63 percent of Americans reporting they do not think their personal financial situations will improve in 2024, down from 66 percent last year.

Not everyone has a pessimistic financial outlook in 2024. In fact, nearly 2 in 5 Americans (37 percent) think their financial situations will improve in the new year, slightly up from last year (34 percent), while 38 percent expect their finances to stay about the same next year, compared to 36 percent last year.

For those who predict their financial situation to improve in 2024, 42 percent credit rising income from either work, Social Security benefits or pensions, for their positive outlook. Other reasons Americans expect their financial situation to improve in 2024? 

• Better spending habits (38 percent) 
• Having less debt (32 percent) 
• Making more money from savings and investments (27 percent) 
• Change in life circumstances (24 percent)
• Changing interest rates (15 percent) 
• Work done by elected representatives (11 percent) 

An additional 5 percent say they don’t know why they expect their finances to improve next year, while four percent cited something else.

Financial Goals in 2024

Regardless of whether you believe your finances will improve, decline, or stay the same in 2024, nearly 9 in 10 Americans (86 percent) have at least one financial goal this new year.

The most common financial goal in 2024? Paying down debt, something that nearly 1 in 4 Americans (22 percent) hope to accomplish this year. 

McBride says paying down debt has been the most commonly cited financial goal in the past three years, but it takes on “added urgency” in 2024 with “rates on credit cards and home equity lines of credit at record highs, mortgage rates at more than two-decade highs and auto loans rates at the highest in more than 15 years.”

Other financial goals in 2024 include:

• Getting a higher-paying job or another source of income (16 percent)
• Saving more for emergencies (15 percent) 
• Better budgeting and spending awareness (13 percent)

Aja Evans, a licensed mental health counselor and financial therapist at Laurel Road, adds that balances on credit cards, car payments and student loans have more Americans on edge lately because of higher interest rates.

“I think generally, people tend to want to get out of debt, but I have noticed my clients really want to shift their lifestyle to get out of it quicker,” she says.

Other financial goals cited less frequently for 2024 include:

• Saving more for retirement (10 percent)
• Investing more money (9 percent)
• Saving for a non-essential purchase such as a vacation, home renovation or big ticket item (8 percent)
• Buying a new home (4 percent)
• Other (3 percent)

What are your financial goals for 2024? Does it include paying down debt? If so, consider scheduling a complimentary budget analysis with one of DebtWave’s nonprofit certified credit counselors. Get started online or call 888-686-4040 to begin your journey toward financial freedom.