The millennial and Gen Z generations are placing financial goals at the top of their lists of 2024 resolutions, a recent American Express survey finds.
The poll, which surveyed more than 1,800 people born between 1981 and 2012, found that 57% of respondents named personal finance goals as their top personal aim for next year, followed by wellness goals (50%) and mental health goals (48%).
“Financial wellness is a huge part of your overall mental health,” Sue Gardiner, certified financial planner and owner of South County Wealth Planning, tells CNBC Make It. “Being in a strong financial position doesn’t mean you have everything to support your lifestyle right now, it means that you understand how you’re spending your money and understand your personal cash flow.”
Millennials and Gen Zers are also setting specific goals for what they want to do with their money in the new year. Here are the top three financial goals for the two generations and how to get started on achieving them.
1. Grow savings
The most popular financial goal for millennials and Gen Zers in 2024 is to grow their savings, with nearly 60% of respondents placing this at the top of their resolutions list.
To get started, Gardiner recommends automating your savings by having a certain amount of money automatically transferred into your savings account periodically.
The type of account you choose can make a difference as well. “The biggest recommendation I hear from all advisors, and what I give out, is to start with a high-yield savings account and learn how it works,” Gardiner says. “Right now, with the interest rates that pay in … a high-yield savings account can be a really great, safe opportunity for growing those savings.”
2. Pay off debt
More than 40% of millennial and Gen Z respondents named settling their debts as a top financial goal for next year. That’s not surprising, given that paying off high-interest debt has grown increasingly difficult since the Federal Reserve began hiking rates in 2022.
There is a variety of strategies for paying off debt, depending on your circumstances. One option is rolling your debt onto a balance transfer credit card. These cards offer an introductory period, typically up to 21 months, with a 0% interest rate, which allows users to chip away at their debt without incurring additional interest.
“If they have a good credit score and they’ve been paying down the debt, sometimes rolling that debt into a 0% interest balance transfer credit card can be a great way for people to start moving all those payments toward the principal that they owe,” Gardiner says.
After that, Gardiner recommends creating a manageable pay-down schedule. And when considering cards to use for rolling over a balance, be mindful of the fees on the initial balance transfer, as well as how long the 0% interest rate lasts, she adds.
Other common ways to begin tackling debt include the snowball method, which involves focusing on paying small balances first, and the avalanche method, which focuses on paying off debt with the highest interest rate first. Both involve making the minimum payments on all of your debt.
3. Stick to a budget
Budgeting is hailed as a cornerstone of any financial plan, and millennial and Gen Z respondents seem to agree — 41% said following a budget will be an important money goal for them in 2024.
Whether you turn to budgeting apps, spreadsheets or even pen and paper, sticking to a budget all depends on whether or not your plan is manageable.
“The budget needs to be understandable for you and not so complicated that you won’t spend time checking in on it,” says Gardiner. “I do suggest, when you first put a budget together, to just check on it weekly.”
Regularly checking on your budget will allow you to become comfortable with your spending habits and know when you overspend on an expense such as groceries, she says.
“You’ll start to train yourself to make decisions and form habits that will allow you to not have to check in on that budget as often, and you can go down to biweekly or bimonthly as you get all of those pieces in place,” she adds.
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