After a year filled with physical, mental and financial challenges, Americans are looking forward to focusing on health and wellness in 2021, according to the annual New Year’s Resolutions Study by Allianz Life Insurance Company of North America.
With seven in 10 Americans identifying the Covid-19 pandemic as the most worrisome threat of 2020, followed by the state of the country’s political environment (45%), 57% of respondents said health and wellness was their top focus area for 2021, up from 51% last year.
Only 13% of respondents said they are including financial planning as a resolution for 2021, the lowest percentage since 2009, the study found. The online survey was conducted in November and included 1,209 respondents ages 18 and older.
That there are so few respondents thinking about financial stability next year concerned Aimee Johnson, vice president of advanced markets and solutions at Allianz Life. While she acknowledged that this year was unique and fraught with unforeseen challenges, she said it is still surprising to see people even less focused on finances, particularly given high unemployment, forced early retirements and other risks to financial security that many experienced in 2020.
“There’s no doubt that there is great value in improving one’s health and wellness, but now more than ever, financial health needs to remain top of mind,” she said in a statement. “Poor money management can negatively affect your health because of the stress that can be caused by fretting over impacted financial plans. It does not need to be a Catch-22 though, as it is completely possible to address both personal and financial health in 2021."
The survey found that nearly two-thirds (61%) of Americans said they felt stressed this year, that is double the amount of people who said the same in 2019. The study attributed the current market climate as one area for the higher levels of stress, as 23% of respondents said they are “terrified the market will crash and we’ll have another recession,” up from only 16% in 2019. Another 25% said they are pessimistic about the markets and believe they will probably lose money in the near future. Respondents cited increased market volatility as the greatest risk to retirement security, replacing 2019’s greatest risk—health-care costs.
The study posited that the pandemic likely brought on certain bad habits, with 32% saying they are spending too much on things not needed, up from 26% in 2019. The survey noted that there is still a low percentage of people saving: 27%, up from 22% in 2019.
Millennials, the study noted, were the biggest offenders when it came to these bad habits. Forty-two percent reported spending money on things they do not need, up from only 30% in 2019, and 39% said they are not saving as much money as they could, up from 22% last year. As a result, 55% of millennials reported feeling stressed, specifically about their finances, compared to 42% of Gen Xers and 23% of baby boomers, the study found.
Though many respondents said financial planning will not be top of mind in 2021, the study found that most Americans (88%) expect their financial situation to improve or stay the same next year, and more than a third (37%) said they reduced their overall spending since the start of the pandemic. But only 27% of Americans said they were more likely to work with a financial professional in 2021, the same amount who were looking for more financial planning help heading into 2020.
Johnson said there are lessons to be learned from 2020 when it comes to having a solid financial plan.
“If 2020 taught us anything, it emphasized the idea that anything can happen, and we need to be prepared for the unexpected. Financial professionals can be a huge benefit in helping people identify risks to their finances and prepare accordingly,” she said.