2018 New Year Money Report: Strategies for Success

Many Americans see the new year as a time to set financial goals, but the reality is that some resolutions will fade away in the coming weeks. Increase your odds of success, even on big goals, by starting with small steps.
By Elizabeth Renter

If you’re like 84% of Americans, you have financial goals for 2018, but good intentions only go so far: 21% of Americans who made any New Year’s resolutions for 2017 abandoned them in less than two weeks. And more than half (53%) of those who had money goals for 2017 failed to reach some or all of them, according to a new NerdWallet survey.

The top financial goals for 2018 include saving money, paying down debt, sticking to a budget and improving credit scores, the survey of over 2,000 U.S. adults by Harris Poll found. The online survey asked Americans how long they stuck with any of their 2017 resolutions and for details about their 2017 and 2018 financial goals.

The survey found that 28% to 77% of people reached their 2017 money resolutions — a range of success that indicates there’s room for improvement.

“You can increase your chances of reaching your New Year’s goal by picking something that you can break down into a series of small steps,” says Kimberly Palmer, personal finance expert at NerdWallet. “If you want to save for an emergency fund, then start by saving a small amount each week. If you want to pay off debt, start by paying off a little each month.

“Big financial leaps start with small steps that you can stick with throughout the year.”

To make the most of your money goals for 2018, NerdWallet calculated what it would take to achieve them. And while success may be more difficult to achieve on some goals more than others, there are strategies you can apply to put even lofty goals in sight.

Increase your chances of reaching your New Year’s goal by picking something that you can break down into a series of small steps.

Kimberly Palmer, NerdWallet personal finance expert

Key findings

  • Of Americans who made any New Year’s resolutions for 2017, 74% broke them in less than six months and 21% in less than two weeks, the survey found.
  • More than half (53%) of those with financial goals in 2017 fell short — with 33% achieving only some of what they set out to — and 20% not reaching any of their goals.
  • Saving money is the top goal for 2018 (60%), as it was for 2017 (50%), according to the survey. Those who set out to save in 2017 fell short of their goals by $1,302, on average. However, the average savings rate was pushed up slightly by baby boomers, who came within $165 of hitting their savings goals.
  • Americans who planned to pay down debt, including mortgages, in 2017 fell short by $3,858, on average. According to NerdWallet’s 2017 annual household debt study, someone carrying credit card debt from month to month carries an average of $6,081. Paying only the minimum monthly payment means it would take 14 years to get out of the red, or they could increase their payments to $457 a month and eliminate that debt entirely in 2018.
  • Millennials, Americans ages 18-34, are again the age group most likely to have financial goals this year, with 93% making financial resolutions in 2018, versus 85% of those ages 35-54 (Generation X) and 78% of baby boomers (ages 55 and older). In 2017, those percentages were 87% for millennials, 78% of Generation Xers and 71% of baby boomers.
  • Only 15% of those with financial goals in 2018 hope to increase their retirement contributions, though it may be one of the easier resolutions to stick with. In 2017, 77% followed through, giving it the highest success rate of all money goals in the survey. NerdWallet’s calculations show that a 30-year-old who increases their contribution from 3% to 5% could see a gain of $208,000 by retirement age.

For a survey methodology and details about the data analyzed, click here.

»MORE: Learn how NerdWallet can help you reach your money goals.

Save money

For those with money goals, saving money is again the top financial resolution for 2018 (71%) as it was in 2017 (65%), according to the survey. Half (50%) of those with goals in 2018 hope to pad the coffers by “saving more in general,” 30% want to save for a vacation, 24% for an emergency fund and 8% for a down payment on a home.

In 2017, those who planned to save money set an average goal of $8,354. They missed that goal by $1,302, putting aside $7,052, on average.

Saving for an upcoming event, like a vacation, should only happen once an adequate emergency fund is in place, since you don’t want to return home to a leaky roof or broken down car and no way to pay for repairs. But whatever it is that you’re saving for, budget it. Earmark the money for your goal so you’re not tempted to overspend on unnecessary items — something that 33% of those who fell short in 2017 cited as a reason they didn’t achieve their financial goals.

» MORE: NerdWallet can help you find quick and easy ways to save

Pay down debt

In 2018, 40% of Americans hope to pay off some form of debt and 23% are aiming to whittle away at credit card debt, the survey found. In 2017, those focused on paying down debt fell short of their goals by several thousand dollars ($3,858), on average.

If you carry a balance on your credit card each month, paying it off in the coming year could save you a considerable amount of money in interest over the long haul.  

According to NerdWallet’s 2017 Household Debt study, the average credit card debt of an American who carries a balance from month to month is $6,081. By making only the minimum payment on this balance — and charging nothing else — the cardholder would need 14 years to pay off the balance and at a cost of over $4,000 in interest. So what would it take to pay off this balance in 2018?

Paying $457 each month on credit card debt could be a stretch, but perhaps your debt is less. A credit card debt calculator can help you determine how much you would have to pay each month to be debt-free by a certain date.

Contribute more toward retirement

Although it isn’t one of their top priorities, 15% of Americans with money goals hope to increase their retirement contributions in 2018, the survey found. More than half (52%) of U.S. families have a retirement account, according to the Federal Reserve’s 2016 Survey of Consumer Finances, but the median value of those accounts is just $60,000.

In 2017, the retirement resolution had the highest success rate, according to the survey, with 77% of Americans setting this goal and actually achieving it. For many people, increasing retirement contributions is as simple as bumping up the percentage taken out of their paycheck, and as seen below, it doesn’t take much to make a difference.

If you’re starting from scratch, saving even a little bit for retirement is better than nothing. If you have a 401(k) at work, invest enough to take full advantage of any employer match and use a 401(k) calculator to ensure you’re on track for retirement. If you don’t have a 401(k), consider opening an IRA to begin saving for your future.

»MORE: Are you on track for retirement? Try our free service for personalized guidance.

Save for a new home

You’ve heard it before — your home is the biggest purchase you’ll make, so start saving early. Eight percent of Americans with financial goals for 2018 hope to save for a down payment and 6% hope to purchase a home, the survey found.

In either case, targeting a down payment amount ahead of time is important, but determining an amount isn’t as clear-cut. To avoid paying private mortgage insurance, or PMI, on a conventional mortgage, you’ll have to put down 20%, but there are options that allow you to secure your loan with less down. If you put down as little as 3% of the purchase price, that means higher payments and mortgage insurance tacked onto your bill each month.

If you’re hoping to begin saving or even to buy a home in 2018, weigh carefully the advantages and disadvantages of a low down payment. Coming up with a 20% down payment may delay home ownership, but you’ll pay less in the long run.

MORE: Use this calculator to see the impact of a down payment on monthly costs

Pay down student loans

Americans are walking away from the hallowed halls of higher education with considerable student loan debt. The median amount of student loan debt carried by families with that debt is $17,000, according to the Federal Reserve’s 2016 survey, so it’s understandable that 10% of Americans with money goals hope to pay down some of that in 2018, according to the survey.

For millennials, the goal is of even higher importance — 17% of younger adults cite paying down student loans as a money goal for 2018, compared with 9% of Generation X and 5% of baby boomers.

But student loan debt has borrower protections that other types of debt do not, so this is a goal it may make sense to sideline. If you’re carrying $17,000 in student loan debt and $17,000 in credit card debt and make only the minimum payments each month, it would take 10 years to settle the student loan. But it will take nearly 19 years to pay off the same amount of credit card debt, since it will accrue over 2.5 times the total interest.

Credit card debt is like an invasive plant that can quickly get out of control if you don’t take care of it. Given its generally high interest rates, paying it off first should take priority over lower interest student loan debt.

Kimberly Palmer, NerdWallet personal finance expert

Even with a much lower credit card balance, doubling up on your student loan payments shouldn’t be a priority. Instead, every month that you carry credit card debt, tackle it first since it costs more.

“Credit card debt is like an invasive plant that can quickly get out of control if you don’t take care of it,” Palmer says. “Given its generally high interest rates, paying it off first should take priority over lower interest student loan debt.

“As long as you continue to make the minimum payments on student loan debt and any other loans, you will protect your credit score. Then, as soon as you celebrate the last credit card debt payment, you can turn your focus to student loans and slowly work toward paying them off, too.”

Set achievable financial goals

Like any other goal you set — at any time of year — the follow-through is what really counts. To set a foundation for success, choose reasonable goals, anticipate roadblocks and have a backup plan.

In 2017, 48% of those who didn’t achieve some or all of their goals said they incurred unexpected expenses and 19% said they or their spouse/partner lost or quit a job, according to the survey. But some obstacles are avoidable.


More from NerdWallet:

Get to your money goals faster

Save money by trimming your bills

Are you on track for retirement?


The online survey  of 2,171 U.S. adults ages 18 and older was conducted within the U.S. by Harris Poll on behalf of NerdWallet from Nov. 20-22, 2017. Questions concerning planned//actual savings and planned/actual debt payment in 2017 asked respondents to forecast from the date of the survey to the end of the year. This online survey isn’t based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, contact Megan Katz at [email protected]

Generations defined by Harris Poll using the following age ranges: Millennial (18-34), Generation X (35-54), baby boomer (55+).

Credit card debt graphic based on $6,081 average balance of revolving credit card debt for those who carry that kind of debt (from the 2017 NerdWallet Household Debt study), with a 14.87% interest rate (August 2017 data from the Federal Reserve) and a minimum monthly payment of 3% of the principal or $20, whichever is greater.

Retirement savings graphic based on 2016 data from the U.S. Census Bureau on national median income ($59,039), with a 100% employer match of up to 3% of income, 6% rate of return in the account, a starting balance of $0 and 37 years of investing with a salary that doesn’t change.

Home down payment graphic based on the Federal Reserve’s 2017 third quarter median home price ($315,200) and a 4.06% mortgage rate as of Nov. 27, 2017. “Monthly payment” includes principal, interest, average property taxes, homeowners insurance, and in the case of the 3.5% down payment, a hypothetical FHA loan, mortgage insurance for the life of the loan. “Total cost” includes those figures, plus the down payment.

Student loan repayment graphic based on median student loan debt (Federal Reserve, 2016 Survey of Consumer Finances), 4.45% interest (the current rate for undergraduate Direct Loans — data from the U.S. Department of Education) and standard 10-year repayment. Credit card data based on 14.87% commercial bank interest rate on credit cards ( August 2017 data from the Federal Reserve).