Survey: Optimism Grows About Keeping Financial New Year's Resolutions in 2025

With the new year comes goal-setting and resolutions, and respondents to Motley Fool Money's 2025 Financial New Year's Resolution survey are more optimistic about hitting their goals than they were last year.

One reason for boosted optimism is a fading concern that inflation and interest rates will make personal finance goals for 2025 unattainable. Still, over half of the respondents surveyed say inflation will make it more difficult to follow through on their financial New Year's resolutions and nearly half voiced the same concern about interest rates.

Different generations have different financial goals for the new year. Older Americans are more focused on saving for retirement. Younger generations lean toward saving for financial milestones like buying a house or having a wedding.

Read on for a deeper dive into how Americans are thinking about financial goals and New Year's resolutions for 2025.

69% of Americans plan on making a financial resolution for the New Year

Sixty-nine percent of survey respondents plan to make a financial New Year's resolution for 2025.

That's roughly the same percentage of respondents who planned to make resolutions in 2023 and 2022.

Millennials and Gen Z are most likely to make 2025 financial New Year's resolutions

Younger generations are more likely than older generations to make financial New Year's resolutions.

Among respondents, 82% of millennials and 84% of Gen Zers plan to set financial goals for the new year, compared to 71% of Gen Xers and just 53% of baby boomers. That's consistent with the 2023 and 2022 issues of Motley Fool Money's Financial New Year's Resolution survey.

Younger generations may be more inclined to set money goals for the new year given that they're generally earning less, saving less, and investing less than older generations. They're less likely to have made big purchases, like a home or new car, and are more likely to have less savings for a retirement or emergency fund.

Inflation, interest rates remain barriers to financial New Year's goals

While 74% of respondents are confident they'll be able to keep their financial New Year's resolutions in 2025, most are worried about inflation and interest rates:

• 66% of respondents with a financial New Year's resolution think inflation will make it harder to keep their resolution.
• 49% of respondents with a financial New Year's resolution think interest rates will make it harder to keep their resolution.

The percentage of respondents that said inflation will make it more difficult to achieve their financial goals in the coming year fell from 85% in 2023 and 80% in 2022 to just 66% in 2024. That reflects the inflation cooling over the course of 2024 but consumers still having a tough time adapting to higher prices.

Respondents are more upbeat about the interest rate environment heading into 2025. Just 49% said interest rates will make it more difficult for them to keep their financial New Year's resolutions, down from 80% the previous year.

That doesn't reflect full blown optimism. Just 23% expect interest rates next year to make it easier for them to hit their financial goals and the remaining 28% believe that interest rates won't impact their financial resolutions.

The Federal Reserve cut interest rates in September and November 2024 after steadily raising them since January 2022.

Declining interest rates can make resolutions that involve loans for large purchases, like an auto loan or mortgage, more affordable to finance. But it can make leaving money in a high-yield savings account less attractive. Higher rates can have the opposite effect.

The most common cause for pessimism about financial New Year's resolutions: They'll become too expensive to keep

Among respondents pessimistic about keeping their financial New Year's resolution, 54% think it will become too expensive to meet their goals.

That's consistent with surveys from previous years despite the level of concern about inflation and interest rates declining.

Another 24% think they won't be able to form the habits necessary to hit their financial goals in 2025, also in line with past surveys.

Those findings are relatively consistent across generations. Gen Z respondents are the most pessimistic about maintaining the habits necessary to keep their financial resolutions (34%), compared to about a quarter of millennials (25%) and Gen X respondents (23%).

Why were you unable to keep last year's financial resolution?

The top reasons respondents were unable to keep their previous years' financial New Year's resolutions all have to do with cost.

The most common reason was that it simply became too expensive to hit their goals.

The second-most common reason was that respondents weren't financially prepared to both keep their New Year's resolutions and keep up with other costs, like supporting their family.

The third-most common reason was that respondents didn't have time to keep their resolution.

That breakdown is largely consistent across age ranges, with the exception of Gen Z being more likely to select time as the reason for failing to keep their resolution (24%), compared to millennials (18%) and Gen X (19%).

Those responses were also consistent Motley Fool Money surveys taken in previous years.

Paying off debt is the top goal among respondents with financial resolutions

Paying off debt tops the list of goals for those with a financial New Year's resolution. That was the top goal last year as well, and it's no surprise that it remains there going into 2025. Total household debt has risen to a record level.

Saving for a significant financial milestone like a house, car, or wedding was the second most selected goal for 2025 among respondents, followed by saving more for retirement.

More fundamental financial goals like building emergency savings, investing more, and saving for retirement were each selected by less than 10% of respondents as financial objectives for the new year, in line with previous surveys.

2025 financial New Year's resolutions by generation

Financial New Year's goals for 2025 vary by generation, among respondents:

• Baby boomers are more likely to want to reduce spending and set a budget than any other generation. They're also more than twice as likely as any other generation to want to spend more on life experiences.
• Baby boomers and Gen X are more than twice as likely as any other generation to want to save more for retirement. They're also most likely to want to build an emergency savings fund.
• Savings for retirement is the primary goal of financial resolutions for just 3% of Gen Z and 6% of millennials.
• The most common objective for Gen Z in the New Year is to save for a significant financial milestone (22%) followed by increasing their income (15%) and paying off debt (15%)
• Paying off debt is the top priority among millennials (28%), Gen X (27%) and baby boomers (24%).
• Baby boomers are far less likely to have a resolution focused on saving for a significant financial milestone compared to other generations.
  
  

Debt goals for 2025

Financial New Year's resolutions that focus on paying down debt also vary by generation.

Among respondents whose primary objective is to pay down debt in the New Year, 55% are focused on reducing credit card debt.

Eleven percent of that group of respondents are aiming to pay down personal loan debt. Ten percent want to tackle their mortgage, while another 10% are looking to pay off their student loans.

Older generations are more likely than younger ones to be eyeing their credit card debt in 2025. Among respondents, 68% percent of baby boomers and two-thirds of Gen X with a debt-focused New Years resolution are focused on credit card debt, compared to 51% of millennials and 32% of Gen Z.

Those younger generations are more likely to be focused on paying down student loan debt, personal loan debt, auto loan debt, and debt from using buy now, pay later services. Student loan and auto debt is a particular aim for Gen Z respondents.

Savings goals for 2025

Saving for a house is the top savings goal for 2025 among respondents with a savings-related financial New Year's resolution, followed by saving for a car down payment and saving for travel.

Baby boomers are the only generation for whom saving for a house down payment isn't the top savings goal for 2025. Instead, that generation is most-focused on putting together a vehicle down payment. Baby boomers are more likely than any other generation to be saving for a home renovation as well.

Gen Z are more likely than any other generation to be saving for a vacation or saving for educational expenses in the new year.

New year, new money goals

Many Americans use the new year to set new financial goals. Nearly all financial New Year's resolutions tend to be long term. They are goals that are realized over months, if not years, and require commitment of both time and money.

Given that, here are some tips that may help along the way.

1. Plan to save by trying an emergency fund calculator.
2. Make use of debt payoff calculators.
3. Try other financial calculators to improve your financial knowledge.
4. Save time by automating savings transfers.
5. Try setting up recurring investments with your brokerage account.
6. Look into a balance transfer credit card to wipe away credit card interest and make paying off credit card debt more manageable.

Of course, even the best New Year's resolutions can be tough to keep and unforeseen circumstances can get in the way. Simply making a resolution and sticking with it for as long as you can, even if you don't meet all your goals, can make a difference.

Methodology

Motley Fool Money surveyed 2,000 American adults via Pollfish on Nov. 1, 2024, Nov. 7, 2023, and Oct. 28, 2022. Results were post-stratified to generate nationally representative data based on age and gender. Pollfish employs organic random device engagement sampling, a statistical method that recruits respondents through a randomized invitation process across various digital platforms. This technique helps to minimize selection bias and ensure a diverse participant pool.