Dream of a new home or a new car this year—here are some steps Americans are taking to make it a reality in 2024. (iStock)
Americans will have a harder time achieving their financial goals in 2024 due to the increased cost of living, according to a recent survey.
According to Bread Financial's survey, six in 10 respondents said they would spend more than they had budgeted at the end of the year, and 47% expected to miss their financial goals largely due to high inflation and rising inflation costs would fall short. Additionally, 57% said it would be more difficult to meet financial goals in 2024 than last year, with 64% citing rising costs as the main reason.
Although inflation has moderated, prices for most things remain high, putting a strain on consumers' wallets. On an annual basis, the consumer price index – a measure of inflation – rose 3.1% in November and the core CPI, which excludes more volatile food and energy prices, remained steady at 4%. Americans continue to pay high prices for basic necessities like food, shelter and insurance.
In addition to dealing with high costs, the Federal Reserve has been raising interest rates since March last year, pushing the benchmark rate to a 22-year high of 5.25% to 5.5% in an attempt to slow the economy and curb rising inflation a target of 2% to reduce rate. The tighter monetary policy stance has affected how much consumers pay for loans, driving interest rates on auto loans, credit cards and mortgages to uncontrollable levels.
If high inflation is preventing you from reaching your financial goals, you might consider taking out a personal loan to pay off debt at a lower interest rate, thereby reducing your monthly payments. You can visit Credible to find your unique interest rate without affecting your credit score.
BUY A HOME IN THESE STATES TO GET STUDENT LOAN DEBT FORGIVEN
Americans get there by doing these three things
Americans are meeting the challenges of higher living costs by budgeting, cutting spending and paying down debt, the survey says.
48 percent of baby boomers planned to cut spending and 39 percent said they would reduce their debt to reach their financial goals in 2024. 29 percent of Millennials and 30 percent of Gen Z planned to save for a significant purchase such as a home or a car, while 40 percent of Millennials and 35 percent of Gen Z are focused on improving their credit score.
“The New Year is the perfect time for consumers to take stock of their financial goals and plan for the next year,” said Nick Antonelli, SVP and Chief Marketing Officer of Bread Financial. “This study shows the importance of focusing on financial well-being and prioritizing a strong foundation in the coming year.”
If you're having trouble making your monthly payments and managing your budget, you can pay off high-interest debts like credit cards with a personal loan. Visit Credible to speak with a personal loan expert and get answers to your questions.
HOMEOWNERS CAN SAVE TENS OF THOUSANDS IN DAMAGE BY USING INTELLIGENT DEVICES
The dream of owning your own home is unaffordable
High mortgage rates, high home prices and a limited housing supply have all contributed to a difficult real estate market that many home buyers find unaffordable. According to a recent survey by IPX1031, around 63% of Americans said they cannot afford a home, while 87% of Generation Z and 62% of Millennials cannot afford a home today.
Despite the challenges facing homebuyers, 13% of Americans plan to buy a new home in 2024, the survey says. Here are some steps you can take to make the dream of home ownership a reality:
Increase purchasing power by improving your credit rating
Buyers can save additional money on home financing by understanding and improving their credit profile. A Zillow analysis showed that borrowers with an “excellent” credit score – between 760 and 850 – could save up to $103,626 on mortgage interest payments over the life of a 30-year fixed-rate loan, based on a typical home price of $354,165.
Know what you can realistically afford
Setting a realistic goal for the type of home you can afford can help set you on the path to success. This number should include the total monthly costs and not the list prices.
Zillow recommended buyers start with a mortgage calculator and affordability tools to understand what goes into a mortgage payment and what they can realistically afford on a monthly basis.
When you're ready to shop around for a mortgage loan, you can use the Credible marketplace to easily compare rates from multiple mortgage lenders and get pre-qualified in minutes.
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