Story at a glance
- A new Bankrate survey of more than 3,000 people found that nearly two-thirds don’t think their finances will improve next year.
- Many U.S. adults have had to cough up more money for consumer goods this year due to soaring inflation.
- In June, inflation in the U.S. reached a 40-year high stemming in part from the war in Ukraine and supply chain issues caused by the pandemic.
Almost two-thirds of U.S. adults don’t think their finances will improve in the upcoming new year with most blaming inflation.
A Bankrate survey of 3,656 people published Monday shows that 66 percent of people have a gloomy outlook on their finances. Out of those people, 36 percent expect their finances to stay the same and 29 percent think that their economic situation will become worse in 2023.
Meanwhile, 34 percent of people have hope that their financial situation will pick up next year.
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Among those that are skeptical about their future financial situation, 63 percent cited inflation as the reason why.
Inflation has skyrocketed this past year stemming in part from supply-chain issues and the war in Ukraine. Inflation reached a 40-year high in June, when the price of consumer goods increased by 9.1 percent compared to the same time last year.
“Roughly 2-in-3 Americans don’t expect their personal financial situation to improve in 2023 and inflation is the runaway reason people feel that way, by more than a 2-to-1 margin over any other factor,” said Bankrate’s Chief Financial Analyst Greg McBride.
“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% felt that would be due to lower inflation.”
Another 29 percent blamed “work done by elected representatives” for their pessimism about their personal finances improving next year.
A smaller portion, 27 percent, said they do not expect their finances to improve in 2023 due to “stagnant wages” or reduced income, and another 25 percent said they don’t think they will reach a better spot financially next year due to changing interest rates.
Nearly 20 percent of respondents said that outstanding debt was the reason why they do not expect their finances to improve in the coming year, while 16 percent said a change in life circumstances.
The survey also asked people what their primary financial goal is for 2023, with paying down debt topping the list.
“Americans’ financial goals reflect an expectation of tougher times to come,” McBride added, “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.”
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