Americans said it will be harder to meet their financial goals in 2024 because of the increased living costs, a recent survey said.
Six in 10 respondents said they would end the year overspending beyond what they budgeted, and 47% expected to miss their financial goals primarily because of high inflation and increasing costs, according to Bread Financial's survey. Moreover, 57% said that meeting financial objectives in 2024 would be more challenging than the previous year, with 64% citing rising costs as the main reason.
Although inflation has been moderating, prices for most things continue to trend high, putting a strain on consumers' pocketbooks. On an annual basis, the Consumer Price Index – a measure of inflation – rose 3.1% in November, and Core CPI, which excludes more volatile food and energy prices, held steady at 4%. Americans continue to pay high prices for essentials like food, shelter and insurance.
In addition to dealing with high costs, the Federal Reserve has increased interest rates since March last year, pushing the federal funds rate to a 22-year high of 5.25% to 5.5% to slow the economy and lower soaring inflation to a 2% target rate. The stricter monetary policy stance has impacted how much consumers pay to borrow, pushing rates on auto loans, credit cards and mortgages to unmanageable levels.
If high inflation is keeping you from meeting your financial goals, you could consider taking out a personal loan to pay down debt at a lower interest rate, reducing your monthly payments. You can visit Credible to find your personalized interest rate without affecting your credit score.
BUY A HOME IN THESE STATES TO GET STUDENT LOAN DEBT RELIEF
Americans are counteracting the challenges of higher living costs by budgeting, cutting back on expenses and paying down debt, the survey said.
Forty-eight percent of Baby Boomers planned to trim spending, and 39% said they would reduce debt to meet their financial goals in 2024. Twenty-nine percent of Millennials and 30% of Gen Z planned to save for a significant purchase like a home or car, while 40% of Millennials and 35% of Gen Z are focused on improving their credit score.
"The new year is a perfect time for consumers to take stock of their financial goals and plan for the next year," Bread Financial SVP and chief marketing officer Nick Antonelli said. "This research shows the importance of focusing on financial wellness and prioritizing a strong foundation in the coming year."
If you're struggling with making your monthly payments and managing your budget, you could consider paying off high-interest debt such as credit cards with a personal loan. Visit Credible to speak with a personal loan expert and get your questions answered.
HOMEOWNERS COULD SAVE TENS OF THOUSANDS IN DAMAGES BY USING SMART DEVICES
High mortgage rates, high home prices and a limited housing supply have all contributed to a tough housing market that many homebuyers find unaffordable. Roughly 63% of Americans said they can't afford a home, with 87% of Gen Zers and 62% of Millennials unable to afford a home today, according to a recent survey by IPX1031.
Despite homebuyers' challenges, 13% of Americans plan to buy a new home in 2024, the survey said. Here are some steps you can take to make the dream of homeownership a reality:
Buyers can save additional money on home financing by understanding and improving their credit profile. A Zillow analysis showed that borrowers with an "excellent" credit score — between 760 and 850 — could be saving up to $103,626 in mortgage interest payments over the life of a 30-year fixed-rate loan, based on a typical home priced at $354,165.
Having a realistic goal for the type of home you can afford can help set you up for success. That figure should include all-in monthly costs instead of looking at list prices.
Zillow recommended that buyers start with a mortgage calculator and affordability tools to understand what goes into a mortgage payment and what they can realistically afford on a monthly basis.
If you're ready to shop around for a mortgage loan, you can use the Credible marketplace to help you easily compare interest rates from multiple mortgage lenders and get prequalified in minutes.
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