A recent Bankrate survey revealed that nearly two-thirds of American adults are pessimistic about their finances improving in the coming year — while citing high inflation as the primary reason.
For the survey, which was published Monday and chronicled the responses of 3,656 U.S.-based adults over a four-day period (Nov. 15-18), 66% of respondents offered a somewhat-gloomy account of their prospective situations.
Within that group, 63% attributed their muddled financial outlook to inflation — which has steadily risen from 1.4% in January 2021 (former President Donald Trump's final month in office) to 10 consecutive months of 6.8% or higher (coinciding with President Joe Biden's time in the White House).
Another 29% blamed "work done by elected representatives" for their financial pessimism, which can also be construed as a disapproving vote for President Biden, since Democrats currently control the House, Senate, and White House.
Also, 36% expect their finances to remain relatively the same, whereas 29% believe their economic situations will worsen in 2023.
Conversely, only 34% projected optimism of their finances improving in the coming year, according to the survey.
"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 Greg McBride, Bankrate's chief financial analyst.
"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," added McBride.
The Bankrate survey also pressed respondents about their top financial objective for the coming year. Based on the above information, it shouldn't surprise many that "paying down debt" ranked No. 1 overall.
"Americans' financial goals reflect an expectation of tougher times to come," said McBride, while adding that "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."
Here are the other ranked responses for financial goals in 2023: Better budgeting with spending (16%), saving more money for emergencies (13%), saving more money for retirement (9%), getting a higher-paying job (8%), and saving for a non-essential purchase (7%).
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