Around two-thirds of Americans don’t have high hopes for their finances improving in 2022, according to a recent survey by personal finance site Bankrate. More than half of those surveyed blamed inflation as a major factor affecting their finances.
Inflation rose nearly 7 percent in November 2021, the highest rate in 39 years, according to Bankrate. Inflation is just one factor cited by survey respondents who don’t feel optimistic about their 2022 finances, however.
Here are some key findings from the Bankrate survey.
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COVID-19 still blocking financial improvements
The biggest obstacle to improving finances in 2022 is the ongoing COVID-19 pandemic, according to those surveyed. Now that the Omicron variant is the dominant strain taking hold for the winter, many people aren’t optimistic about their finances turning around anytime soon. Rising prices for groceries, dining out and other expenses are all major causes of financial concern for survey respondents.
Many blame politics
Around 57 percent of survey respondents say political partisanship getting in the way of agreeing on key financial issues like lifting the debt ceiling is one of the biggest reasons they expect their finances to worsen in 2022. Another 25 percent cited bickering politicians as a reason for expecting their finances to remain about the same in 2022.
Age affects financial optimism
Not everyone has a bleak financial outlook for 2022. Optimism about improving their finances in the upcoming year was high among more than half (51% of Generation Z respondents. However, financial optimism for improving finances the coming year decreased among older generations.
Here’s the survey’s optimism for improving personal finances in 2022 rundown by age.
- Millennials (born 1977 to 1995): 42 percent
- Gen X (born 1996 to 2015): 32 percent
- Baby Boomers (born 1946 to 1964): 23 percent (older Baby Boomers); 18 percent (younger Baby Boomers)
- Silent Generation (born 1945 and before): 14 percent
Gen Z and Millennial respondents based their optimistic financial outlooks on making more money at their jobs. Baby Boomers who felt more hopeful about their finances improving in 2022 cited having less debt than before as the source of their financial optimism.
For respondents worried that their finances would worsen in 2022, 73 percent of Gen Xers cited inflation as the culprit. Nearly 80 percent (79 percent) of Baby Boomers and 53 percent of Millennials are also concerned that inflation will negatively impact their finances.
Optimism varies by location
Survey respondents’ level of optimism varied by geographical location. Around 40 percent of consumers in the Western United States expect their finances to improve in 2022. Southerners and people living in the Northeast were less optimistic, with 32 percent and 30 percent, respectively, expecting finances to improve in the upcoming year. Midwesterners were the most pessimistic, with only 28 percent hopeful that their finances would get better in 2022.
Americans still determined to get rid of debt
Even with COVID-19 and the Omicron variant casting a shadow over Americans’ finances, many surveyed still have financial goals they hope to achieve in 2022.
Around 20 percent of survey respondents said they’re determined to reduce debt in 2022 despite financial obstacles caused by the pandemic. About 14 percent intend to work on padding emergency savings funds, and 13 percent vowed to be better about sticking to their budgets.
Find out: How to Get Out of Debt