What's Your Dream for 2016?

More than two-thirds of Americans will make financial New Year’s resolutions in 2016, according to a  survey conducted by the National Endowment for Financial Education® (NEFE®). Top goals include setting and following a budget, getting out of debt and building savings. Home-related costs and transportation are among the highest anticipated expenses — and that’s not taking into account setbacks such as medical emergencies or damage from a natural disaster.

We hit the streets of Denver to find out: What’s your financial New Year’s resolution?


Housing: A Big Expense and a Potential Setback

Owning a home long has been considered the cornerstone of the American Dream, however the rate of homeownership continues to fall – down to just 63.7 percent in the first part of 2015. Consequently, the rental market has boomed, resulting in more competition for fewer units and higher rents overall, according to  The State of the Nation’s Housing, a report by the Joint Center for Housing Studies at Harvard University. In 2014, the national vacancy rate was just 7.6 percent and rents rose 3.2 percent — twice the rate of inflation. In the hardest-hit cities – Denver included – rents spiked 10 percent or more in 2014. This has increased the share of moderate-income households that are defined as “cost burdened,” meaning that they are spending 30 to 50 percent of their income on housing. It’s no wonder that housing is top of mind as Americans are setting their intentions for the coming year.

Credit and Debt: Dancing with the Devil

Most everyone understands that they need credit, but many Americans find themselves, seemingly overnight, in more debt than their incomes can bear. The Credit CARD Act helped consumers understand their credit card debt; extensive media coverage following The Great Recession gave the public a deeper (if unwanted) understanding of how their mortgage debt works; and many know all too well the pangs of medical and student loan debt. But research shows that there may be a sweet spot for debt – enough to motivate you, not enough to drown you. In order to build credit with those good debts that later become assets, consumers need enough income to carry them through the unplanned, but inevitable, bumps in the financial road.

A Savings Emergency

Forty-seven percent of Americans could not cover an emergency expense of $400, or would have to sell something or borrow money to cover it, according to the Federal Reserve Board’s 2014 Survey of Household Economies and Decisionmaking (SHED). And, of those, 39 percent reported that the biggest emergency cost they could cover with cash or cash equivalent (such as putting it on a credit card and paying it off immediately) was less than $100. For those living paycheck to paycheck, saving for retirement or a child’s education seems like a fantasy. Many Americans believe that the only way they could fund their retirement would be to win the lottery. Meanwhile, another generation is letting critical years slip by as they fail to capitalize on the magic of compound interest.

What's Your New Year's Resolution?

The New Year is the time to make resolutions. It also is usually around the time most people break them. One of the first steps to setting achievable goals is to honestly assess where you are. That might mean that – like 43 percent of those with financial New Year’s resolutions this year – you resolve to set and follow a budget. But your spending is just one aspect of your financial behavior. The LifeValues quiz is a tool that can help you better understand why you make the financial decisions you make. Based on research, the quiz delivers your unique LifeValues profile, showing where you stand in relation to four values: Inner, Social, Financial and Physical.

No matter what you are dreaming for 2016, give yourself deadlines and keep track of your progress. If you want to better your odds, enlist a friend to help hold you accountable.

So, we’d like to know … What are you dreaming for 2016?

[Stock media provided by AgePincher/]