Americans Plan to Double Savings in 2012

Among these individuals planning on a financial resolution for 2012, “saving more” is their top priority, with a median annual target of $2,400 for long- and short-term goals, double last year’s goal of $1,200.

For the third consecutive year, the top two resolutions continue to be saving more (46%) and spending less (21%). However, paying off debt jumped into the top three with 19% considering this goal for 2012—replacing making a budget. Paying off debt was the seventh most popular resolution last year, with 8% of those with financial resolutions considering it. Based on the survey findings, Americans are already taking this resolution seriously, with nearly one-third (29%) saying they are in less debt today compared with the same time last year.

In a year-over-year comparison, respondents continue to say saving for long-term goals (62%) outweighs short-term goals (34%). The top long-term goal cited was saving more for retirement in an individual retirement account (IRA) or workplace savings plan (52%). This goal was followed by saving for college (45%) and retiree healthcare costs (37%).

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Key short-term savings goals shifted from last year, showing a change in priorities for many respondents. The biggest increases were seen in saving for a household upgrade or repair (up to 45% from 26% last year), building an emergency fund (up to 65% from 50% last year) and saving for a home (up to 32% from 22% last year). Significant decreases were found in saving for a vehicle purchase (down to 35% from 57% last year) or a luxury item (down to 5% from 19% last year). 

With 84% of respondents saying the economy is already in or likely to suffer a double-dip recession, investor confidence has been shaken. In fact, nearly four-in-10 (39%) say they are not confident in their ability to make the right investment decisions given the current economy and market volatility.

On the other hand, market conditions are also having a positive effect on many Americans. More than eight-in-10 (85%) Americans who are resolved to save more say their current savings behavior is likely to continue as the economy recovers. This is up from 80% last year. Additionally, the majority (66%) of those considering a financial resolution say the economic events of the past year will help them stick with the resolutions made in 2011.