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Whether it’s the hottest inflation in four decades or this year’s sharp end to the lowest borrowing costs ever, Americans’ finances haven’t been easy in 2022, and many don’t expect their wallets to feel better in the new year.

According to a new Bankrate survey, 2 in 3 Americans (or 66 percent) do not expect their personal finances to improve in 2023. That total includes 36 percent who expect their finances to stay about the same and 29 percent who expect their finances to get worse. Just over 1 in 3 Americans (or 34 percent) hope their personal finances will improve in the new year.

The findings underscore a tough economic outlook for next year as experts warn of an increased likelihood of a recession amid the Federal Reserve’s rapid interest rate hikes. High inflation in basic household goods such as gasoline, housing and food is also hurting Americans’ purchasing power.

Inflation is high and there is little optimism that it will decrease meaningfully. Even among those who expect their finances to improve in 2023, only 19 percent believe this is due to lower inflation.

—Greg McBride, CFAChief Financial Analyst at Bankrate

Fixed assets

  • More than 1 in 3 Americans (or 34 percent) expect their finances to improve in 2023, versus 29 percent who expect their finances to get worse and 36 percent who see their finances staying the same the same
  • A 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 2 Americans (or 41 percent) who expect financial improvement in the next year say earning more money at work would help them, followed by 30 percent who have less debt and 25 percent who attribute change in life circumstances.
  • Paying off debt, better budgeting and saving more money for emergencies are among the top financial goals for Americans in 2023.

Americans had varying degrees of anxiety about their personal finances in 2023. Of the 29 percent who expect their finances to get worse in the new year, 18 percent see their finances getting somewhat worse, while 11 percent expect their finances to get significantly worse.

This was also true for Americans expecting improvement. The 34 percent who anticipate a boost to their finances include 10 percent who expect their finances to improve significantly and 24 percent who expect them to improve somewhat.

White Americans are more than twice as likely as black Americans to expect their finances to get worse in the next year (32 percent and 15 percent, respectively), while 27 percent of Hispanic Americans expect their wallets to get worse. Meanwhile, 51 percent of black Americans expect an improvement, compared to 30 percent of white Americans and 37 percent of Hispanic Americans.

Nearly half of individuals earning $100,000 or more annually expect an improvement in the next year (46 percent), compared with 35 percent of those earning between $80,000 and $99,999, 28 percent of those earning between $50,000 and $79,999 and $50,000 35 percent of those with income below

Younger generations were also more optimistic about their financial prospects next year, with 48 percent of Gen Z (ages 18-25) and millennials (ages 26-41) expecting their finances to improve in 2023, up from 28 percent. Gen X (ages 42-57) and 22 percent of baby boomers (ages 58-76).

Americans who don’t expect their finances to improve next year overwhelmingly point the finger at inflation.

More than 3 in 5 (or 63 percent) say continued high inflation will be the reason their finances won’t improve, more than any other category, including:

  • Work of elected officials (29 percent);
  • Stagnation of wages or reduction of income (27 percent); and:
  • Change of interest rates (25 percent).

Meanwhile, 18 percent of each say they will be held back by the amount of debt or the money they have from savings or investments. Another 16 percent blame changes in life circumstances, along with 12 percent who say they don’t know why they don’t expect their finances to improve, and 8 percent who blame something else.

Inflation was the No. 1 reason why these Americans don’t expect to see financial improvement next year across demographic and socioeconomic categories, although some indicated more concern about price pressures than others, especially older Americans. 3 Two in 3 Gen Xers and Boomers (or 66 percent and 73 percent, respectively) blame inflation for their expected problems in the next year, compared to 38 percent of Gen Z and 55 percent of millennials.

The Fed’s research shows that inflation often hits older generations harder because they are more likely to be nearing the end of their careers or living on fixed incomes. Younger generations were also more likely than their older counterparts to say their pay has kept up with inflation, according to a separate Bankrate survey in September.

Even if inflation eases next year, households don’t expect it to help much. Only 19 percent of those who expect better days for their wallets in 2023 say low inflation will be what will help them get out.

Instead, the most obvious reasons for these achievements are:

  • Making more money at work (41 percent);
  • Less debt (30 percent);
  • Change in life circumstances, such as family or health (25 percent); and:
  • Earn more money on their savings and retirement investments (24 percent).

An additional 5 percent said they don’t know why they expect their finances to improve next year, while 9 percent said otherwise.

More often than not, Americans have a set of financial goals for 2023, even if high inflation makes budgeting and saving difficult.

The best goals include:

  • Debt repayment (19 percent);
  • Better budget spending (16 percent);
  • Saving more for emergencies (13 percent);
  • Saving more for retirement (9 percent);

Many Americans also prioritize finding a higher-paying job (8 percent), saving for non-essential purchases like a vacation or big-ticket item (7 percent), buying a new home (5 percent), or investing more money (5 percent). :

Paying off debt and better budgeting were the top two goals for all Americans except for the highest-income households, whose top two goals were paying off debt (17 percent) and saving more for retirement (16 percent).

“Americans’ financial goals reflect an expectation of tougher times ahead, with households focused on paying down debt, budgeting better and saving more for emergencies in 2023,” McBride said. “High inflation and rising interest rates are squeezing budgets, while additional savings built up during the pandemic are being depleted, underscoring the fixes Americans want to make with their finances.”

The methodology commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 3,656 US adults. Fieldwork was conducted on November 15-18, 2022. The survey was conducted online and met strict quality standards. It employed a non-probability sample, using both quotas at initial collection and a weighting scheme designed and proven to provide nationally representative results.


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