The new year can offer the hope of a fresh start — and a fresh slate for credit cards.
While only 10% of Americans aged 65 years and older made and kept financial New Year’s resolutions in 2023, 71% have made such resolutions for the quickly approaching new year, according to research from Edward Jones.
“While the new year can be a time for lifestyle resolutions, it’s also important to begin the year on the right financial foot,” said Lena Haas, head of wealth management advice and solutions at Edward Jones.
For those Americans aged 65+ who are making financial resolutions for 2024, the top three goals were paying off credit-card debt (21%), setting up a savings account (18%) and setting a budget (8%), the Edward Jones research showed.
Credit-card debt is a problem for many Americans, making those retirees far from the only ones looking to pay it off. The average credit-card debt among all U.S. cardholders with unpaid balances in the third quarter of 2023 was $6,993, according to Lending Tree. Americans’ total credit-card balance was a record $1.079 trillion at that time, according to the Federal Reserve Bank of New York.
“Inflation can play a role in debt management, so it’s important to ensure you’re paying your bill each month to avoid rising interest rates,” Haas said.
“If you do carry a balance, you might be able to transfer it to a lower-rate card, depending on your credit score. And if you’re carrying multiple credit cards, you might benefit by getting a fixed-rate debt-consolidation loan. In any case, the lower your debt payments, the more you can invest in your other retirement goals,” Haas said.
To stay on track with the financial resolutions they have set, 73% of Americans aged 65+ would find budgeting most helpful.
“To ensure you’re staying on track, it’s important to check in with your finances on a regular basis. Your spending needs can change on a yearly, monthly or even weekly basis, so outlining exactly what you spend against your retirement income offers a more complete picture of your current finances,” Haas said.
There are various ways to budget, but one involves making lists. “Organizing your money according to ‘needs,’ ‘wants’ and ‘nice-to-haves’ can reveal your day-to-day spending habits and help you live life according to your values, while also meeting your savings and retirement goals,” Haas said.
Of course, not everyone makes New Year’s resolutions.
About 29% of older Americans surveyed who are electing not to make financial resolutions for 2024 said they are doing so because they are comfortable in their current financial position, Edward Jones found.
Other common reasons cited were never making New Year’s resolutions (43%), not feeling like they have the excess funds to accomplish financial resolutions (11%), and being uncertain about their 2024 finances (9%), Edward Jones found.
When it comes to resolutions, research suggests that approach-oriented goals — things to do proactively — are more successful than avoidance-oriented goals. Avoidance-oriented goals involve trying to stop doing certain behaviors, such as avoiding chocolate or stopping unnecessary spending.
So make a to-do list and stick to it.
