Whether it’s the hottest inflation in four decades or this year’s abrupt end to the lowest borrowing costs ever, Americans’ finances haven’t had it easy in 2022 — and most aren’t expecting their wallets to feel any better in the new year.
About 2 in 3 (or 66 percent) of Americans do not expect their personal finances to improve in 2023, according to a new Bankrate poll. That total includes 36 percent who expect their financial situation to remain about the same, along with 29 percent who expect their finances will worsen. Slightly more than 1 in 3 Americans (or 34 percent) have hope that their personal financial situation will improve in the new year.
The findings highlight next year’s rocky economic outlook, as experts warn of an increasing likelihood of a recession amid the Federal Reserve’s rapid rate hikes. High inflation on everyday essentials such as gasoline, housing and food is also biting into Americans’ purchasing power.
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 percent felt that would be due to lower inflation.
— Greg McBride, CFABankrate chief financial analyst
Key takeaways
- More than 1 in 3 (or 34 percent) Americans expect their finances to improve in 2023, versus 29 percent who expect their finances to worsen and 36 percent who see their financial situation staying about the same.
- The majority of Americans who say their finances won’t improve next year (or 63 percent) say continued high inflation will be to blame.
- More than 2 in 5 Americans who expect financial improvement next year (or 41 percent) say making more money at work will help them, followed by 30 percent who credit having less debt and 25 percent who attribute a change in life circumstances.
- Paying down debt, budgeting better and saving more money for emergencies are among Americans’ top financial goals for 2023.
Nearly 3 in 10 Americans see their finances worsening next year
Americans had varying degrees of concern about their personal finances heading into 2023. Of the 29 percent expecting their finances to get worse in the new year, 18 percent see their finances getting somewhat worse, while 11 percent are bracing for their finances to worsen significantly.
That was also true for Americans expecting improvement. …….