For many of us, money worries take precedence over our own health and fitness goals. As such, finances appear to be the area many people want to fix in 2012.

When asked to select their top financial blunder of 2011, approximately 1 out of 5 workers surveyed by Principal Financial Group said they did not save enough during the year. And 18 percent said increasing debt was their top mistake.

Looking toward 2012, saving a set amount of money each month and paying off credit cards were the top financial-specific New Year's resolutions, at 26 percent. Twenty-one percent said they are resolving to cut spending by a specific amount each month in 2012.

Individuals may be assessing their personal financial situations, but many feel hampered by bigger-picture issues. Experts don't want those smart individual resolutions to fail out of the gate because the nation's economic fight appears too daunting for households to overcome.

"In today's uncertain economic environment, it is important for Americans to focus on what they can control versus what they cannot," says Luke Vandermillen, vice president of retirement and investor services at the Principal Financial Group. "Having a financial strategy and actively saving for financial emergencies and retirement can help reduce some of the pressures and anxiety many are feeling today."

The Principal Financial Well-Being Index, compiled from a poll of American workers at growing businesses with 10 to 1,000 workers as well as retirees, shows that the economy is the greatest source of stress for Americans, followed by their own personal finances, job, and health. Half of retirees (52 percent) and 2 out of 5 workers (42 percent) reported a high stress level with regard to the economy, while 30 percent of retirees and 34 percent of workers said personal finances caused high stress. Less than a third of workers (30 percent) say their job causes stress, and far fewer (19 percent of retirees and 15 percent of employees) report stress over physical health.

The nation's economic uncertainty is taking a greater toll on older Americans. Those over age 50 (51 percent of those 50 to 64 years and 59 percent of those 65 years and older) reported higher stress levels regarding the economy than those under 50 (30 percent of those 18 to 34 years and 40 percent of those 35 to 49 years). Overall, females (41 percent) were significantly more likely than males (29 percent) to rate their stress level related to their personal finances as "high."

Market volatility adds to jitters. With the economy a main source of stress, many Americans also report concern over market volatility impacting their long-term and short-term financial well-being. Two out of five workers (41 percent) and one-third of retirees say they are nervous about their ability to save due to market volatility. Another quarter of workers (26 percent) and one-third of retirees have reduced their spending because they've lost money due to market volatility. Some 22 percent of workers and 18 percent of retirees have moved to a more conservative investment approach.

A separate study from Fidelity Investments shows 84 percent of respondents asserting that the economy is already in or likely to suffer a double-dip recession. As a result, nearly 4 in 10 of those surveyed say they are not confident in their ability to make the right investment decisions given the current economy and market volatility.

But Americans appear to be willing to adopt a more upbeat mindset heading into 2012, at least at this point of setting their resolutions. Households say they won't let national issues derail their financial resolutions.

More than 8 in 10 (85 percent) Americans who resolved to save more say their current savings behavior is likely to continue as the economy recovers, Fidelity says. This is up from 80 percent last year. Additionally, the majority (66 percent) of those considering a financial resolution say the economic events of the past year will help them stick with the resolutions made in 2011.

Debt reduction.The Fidelity poll also shows Americans vowing greater savings and debt-shrinking plans as the new year approaches.

Nearly half (46 percent) of those considering a financial resolution for 2012 say saving more is their top priority, with a median annual target of $2,400 for long- and short-term goals, double last year's goal of $1,200. Along with this goal, spending less was given second billing.

Interestingly, paying off debt jumped into the top three, with 19 percent considering this goal for 2012 -- replacing making a budget. Paying off debt was the seventh most popular resolution last year. Nearly one-third (29 percent) of respondents say they are already in less debt today compared with the same time last year.

The top long-term goal cited in the survey was saving more for retirement in an individual retirement account (IRA) or workplace savings plan (52 percent). This goal was followed by saving for college and retiree healthcare costs.

As for short-term savings, Americans appear to be willing to put more money into their homes but less into car and luxury buying, according to Fidelity.

Savant Capital Management offers this resolution checklist. Of course, individuals will want to craft their list specific to personal needs. There's something noteworthy about this list: Even the financial services experts put family time and health at the top, above fiscal matters. Stress and bad health are expensive.

1. Focus on friends and family.

We tend to take out our frustrations and stress on those closest to us; make an effort to respect those around you.

2. Stay healthy.

With healthcare costs at an all-time high, staying healthy has never been more important. The obvious reason to stay healthy is your enjoyment of life.

3. Stop spending more than you make.

It is really very simple; if you spend more than you make, you will only accumulate debt instead of a nice nest egg for your future.

4. Take control of your investments.

Diversify and control investment expenses. Are you taking advantage of asset placement to benefit from tax laws?

5. Realize that taxes matter.

Make sure your portfolio is structured to lower your tax burden.

6. Don't count on Social Security.

Social security benefits may or may not be around in the future, but one thing is certain: You will not cover all your living expenses with your monthly Social Security check.

7. Set up an automatic savings plan.

Even $5 a week is a fine place to start.

8. Be very aware of identity theft.

Check your credit report on a regular basis. Always shred your financial and personal documents.

9. Review your contracts.

Over the years, you keep paying your bills and never think about asking for a better price. This is common with your phone bills and cable bill. Sometimes all you have to do is ask.

10. Simulate bad news.

Similar to government agencies and corporations, run your own disaster simulation. Are you doing enough to prevent an emergency or life change from becoming a financial disaster? It's a good time to evaluate your insurance levels and emergency fund.

 

 

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Personal Finance - 2012: Financial Resolutions Beat Out Health and Fitness

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