Source: Bankrate survey, Nov. 6-8, 2024

Across generations, those who expect their finances to get better next year include:

• 55 percent of Gen Z (ages 18-27)

• 49 percent of millennials (ages 28-43)

• 38 percent of Gen X (ages 44-59)

• 37 percent of baby boomers (ages 60-78)

Those who think they will get worse include:

Every week, Bankrate publishes proprietary surveys, studies and rate data, providing the latest data-driven insights on the state of Americans’ personal finances — including credit card debt, homeownership, insurance, retirement and beyond.

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Even though inflation is tamer now compared to the last two years, the pain of rising prices hasn’t completely subsided. The prices of goods and services are still rising — just not as quickly as before. Inflation continues to show up in Americans’ daily lives, from groceries to car insurance to rent, and wages are still playing catch-up. According to Bankrate’s Wage to Inflation Index, wages aren’t projected to fully recover from inflation until the second quarter of 2025.

Forty-four percent of those who think their financial situation will not improve next year blame continued high inflation. That compares to 61 percent who cited it a year ago. Other top reasons why Americans think their finances will not improve include work done by elected officials (30 percent), stagnant or reduced income (28 percent) and the amount of debt they have (20 percent).

Source: Bankrate survey, Nov. 6-8, 2024
Note: Percentages are of U.S. adults who think their personal financial situations will not improve in 2025.

On a more optimistic end of the spectrum, for those who think their financial situation will improve next year, 36 percent cite lower levels of inflation as a reason. Other popular reasons are rising income from employment, Social Security, a pension, etc. (35 percent); having less debt (30 percent); and better spending habits (25 percent).

Source: Bankrate survey, Nov. 6-8, 2024
Note: Percentages are of U.S. adults who think their personal financial situations will get better in 2025.

Additionally, 25 percent who believe their finances will get better in 2025 give credit to work done by elected officials. Following the election, our survey shows that many Americans view elected officials as either hindering potential financial progress or as a catalyst for improvement. While this shows a continuing political division, Hamrick suggests identifying financial goals and working toward them, regardless of political beliefs.

“Political cycles come and go, but the need to attend to our financial well-being remains,” he says.

The most common main financial goal cited by Americans for 2025 is paying down debt (21 percent), and that percentage tends to rise with age. Generationally, that breaks down to:

Carrying credit card debt is costly, but it’s become more common over the last few months. As of June 2024, at least half of Americans carry a credit card balance from month to month, according to Bankrate’s Credit Card Debt Survey. That’s up from 44 percent in January 2024, and the highest percentage since March 2020 (60 percent).

“Average credit card interest rates top 20 percent (still close to a record high),” Hamrick says. “Targeting high-cost debt can provide an immediate benefit.”

Source: Bankrate survey, Nov. 6-8, 2024
*(e.g., vacation, home renovation, big ticket item, etc.)

Saving more for emergencies is the second most common main financial goal among Americans (12 percent), followed by getting a higher-paying job or an additional source of income (11 percent) and budgeting spending better (10 percent).

Roughly 1 in 10 Americans (11 percent) say they have no financial goals for 2025. Baby boomers are the most likely generation to say they have no financial goals for the next year:

• Gen Z: 6 percent

• Millennials: 10 percent

• Gen X: 9 percent

• Baby boomers: 16 percent

Of those who identified a financial goal for 2025, 43 percent say that it’s a New Year’s resolution they’ll address immediately.

Thirty-five percent say it’s a medium-term issue, meaning they’ll address it once they’ve had some time to think and plan. Thirteen percent called their main financial goal a long-term issue and will address it after they’ve had an extended period to do research or find advice.

One in 10 Americans (10 percent) said they don’t know how they’ll address their main financial goal in the coming year.

Source: Bankrate survey, Nov. 6-8, 2024
Note: Percentages are of U.S. adults who have a financial goal in 2025.

Over the last few years, there has been a disconnect between how well the economy is doing and how people feel about their financial standing. The economy has managed to avoid a recession for a few years, inflation has been tamed, interest rates have fallen and the job market continues chugging along. Yet the positive economic data hasn’t aligned with Americans’ perceptions of the economy.

Bankrate’s new Financial Outlook survey shows a possible shift in that narrative. Americans may be warming up to the idea that the economy — and everything related to their finances — will hold up better in 2025.

Regardless of what’s anticipated, financial experts recommend “future-proofing” your finances, and the New Year is a great opportunity to get ahead. To make progress in 2025, especially following the holidays, take the time to get a comprehensive understanding of where your current finances stand, set new financial goals and put together a financial plan. Hamrick recommends regularly checking in on your finances and goals to make sure you’re staying the course.

“It is one thing to have a financial goal, it’s another to act upon it,” Hamrick says. “Once past the new year, consider scheduling monthly or quarterly check-ins to assess your progress. Tiny changes can lead to big results, particularly with money.”