A Year to Forget: Americans Fall Short of Financial Goals in 2023

Financial Goals for 2023 & 2024 | Debt Problems | Running Out of Money | Scant Savings | Late Retirement | Average Net Worth | Depending on Parents | Financial Regrets | Money Secrets | Money & Happiness | Cutting Spending | Holiday Shopping | 2024 Financial Outlook 

As 2023 winds down, many Americans are looking back on the year and seeing an ugly picture. About 39% say they've gone deeper into debt this year, and fewer than half (45%) say they make enough money to live comfortably. 

Apart from cutting spending, many Americans have failed to achieve their financial goals in 2023. Just 28% of those who wanted to buy a home this year actually did so, and just 25% of those who wanted to find a higher-paying job found one. 

Additionally, high prices and interest rates led more people to sacrifice their long-term savings to afford short-term essentials. About 49% of Americans say they have dipped into their savings in 2023, and a majority (51%) would run out of money within one month if they lost their income. 

To learn more about how people are faring financially in 2023, Clever Real Estate surveyed 1,000 Americans about their goals, achievements, and disappointments over the year.

Americans Are Struggling to Meet 2023 Financial Goals 

High prices and interest rates have made 2023 a complicated year for personal finances, with 92% of Americans saying they face financial challenges. 

Many are failing to hit their goals. The most common goals Americans set for 2023 were spending less money (50%) and sticking to a budget (42%). 

Just over half (56%) of those who set out to spend less money say they've done so successfully, but for the most part, Americans have failed to reach their other goals. Only about a quarter of those who set out to buy a house or wanted to find a better-paying job actually did so. 

About 18% of Americans haven't achieved any of their financial goals this year. There's still time in 2023, but many Americans (42%) aren't confident they'll meet their goals before Jan. 1.

What Are Americans' Financial Goals for 2024?

High prices are still at the front of Americans' minds, and that's reflected in their financial goals for 2024. The most common goals are spending less money (42%), sticking to a budget (41%), and building emergency savings (33%) — the same top three as in 2023. 

At the more ambitious end of the spectrum, 16% say they hope to buy a home in 2024 — a goal that won't get any easier to achieve with mortgage rates at a 20-year high. Nearly a quarter of millennials (23%) and Gen Z Americans (24%) named buying a home as a 2024 financial goal. 

Americans' financial goals for 2024 include:

• Spending less money (42%)
• Sticking to a budget (41%)
• Building an emergency fund/savings (33%)
• Saving more for retirement (30%)
• Paying off credit card debt (29%)
• Investing more (27%)
• Finding a higher-paying job (20%)
• Becoming financially independent (i.e., not getting financial support from parents) (18%)
• Receiving a raise at their current job (17%)
• Buying a house (16%)
• Paying off student loans (10%)

Given how 2023 has played out, about 80% of Americans are already concerned they won't meet their financial goals in 2024. 

High Costs Have Hurt Americans' Chances of Meeting Their Goals

Americans are typically willing to admit when they don't have wise money habits, but they mainly blame their 2023 financial woes on systemic factors. 

About 62% of Americans say inflation has negatively impacted their finances in 2023. Food costs (57%) and utility costs (41%) were also blamed frequently. 

Nearly 1 in 4 Americans (23%) say they were hurt by their own unnecessary spending. Overall, Americans say the biggest drags on their finances are:

• Inflation/high cost of living (62%)
• Food costs (57%)
• Utility costs (41%)
• Debt (e.g., credit card, student loan, etc.) (32%)
• Housing costs (31%)
• Stagnating wages (i.e., wages not keeping up with cost of living) (25%)
• Interest rates (23%)
• Overspending on nonessential purchases (23%)
• Medical expenses (22%)
• Job loss (18%)
• Underperforming investments (10%)
• Child care expenses (8%)

Millennials and Gen Z are more likely than older generations to say they were impacted by job loss, interest rates, stagnating wages, and housing costs. 

Millennials were twice as likely as any other group to say child care costs hurt their finances. Gen Z adults were more likely than other generations to say job loss undermined their finances.

2 in 5 Americans Have Gone Deeper Into Debt in 2023 

Most Americans (57%) aren't happy with their financial situation, but for many, the reality is even more dire. About 39% of Americans say they went deeper into debt in 2023, including nearly half of millennials (45%).

More than one-third of Americans (35%) believe they'll be in debt for the rest of their lives. About 38% currently have bills that are delinquent or unpaid more than a month past due. 

A third of of Americans (33%) say they could receive a $10,000 windfall and still be unable to meet their financial needs. 

The findings underscore how many Americans are living on the edge, with 69% concerned they'll be unable to afford everyday goods if prices continue to increase.

Student Debt Looms as Payments Resume 

After a three-year pause on mandatory student loan payments, many borrowers are making their first loan payments since the pandemic. Only 44% of borrowers say they made student loan payments during the pause. 

With payments starting again, many Americans are bracing for a financial hit. About 86% of those with student loans expect the continuation of payments to negatively impact their finances. 

As a result, about 2 in 5 borrowers (39%) say they'll have to work more or find a higher-paying job. One-third (33%) say they'll likely fall into another form of debt because of the payments. 

As student loan payments resume, borrowers say:

• They will have to get an additional or higher-paying job (39%)
• They will have to delay goals, such as buying a house or car (36%)
• They won't be able to pay as much toward other debts (e.g., car payments, mortgage, credit card debt, etc.) (35%)
• They will fall into another form of debt (33%)
• They won't be able to afford discretionary spending (e.g., entertainment, travel, etc.) (30%)
• They won't be able to save for retirement (22%)
• They won't be able to afford housing (i.e., rent/mortgage) (22%)

Just 14% of Americans with student debt say their finances won't be impacted by student loan payments resuming. 

Half of Americans Say They Would Go Broke in 1 Month if They Lost Their Income

Most personal finance experts recommend keeping three to six months of expenses in emergency savings. But most Americans don't have that much financial runway. 

About 51% of Americans say they would run out of money within a month if they lost their income, provided they didn't change their spending. That includes 29% of Americans who say they'd run out of money in one week or less. 

In fact, the portion of Americans who say they'd go broke within a week (29%) is larger than the portion who say their funds would last at least a year (26%). 

Americans say if they lost their income, they'd run out of money in:

• One week or less (29%)
• Two weeks or less (36%)
• Three weeks or less (40%)
• One month or less (51%)
• Three months or less (63%)
• Six months or less (74%)
• One year or more (26%)

In addition to a tough economy, bad spending habits also play a role in Americans' lack of savings. About 47% say they tend to spend more money than they earn, including 55% of Gen Z and 56% of millennials. 

With younger Americans spending more money and having fewer years in the workforce, only about 16% of Gen Z and 24% of millennials would have enough saved to last a year, compared to 40% of baby boomers.

49% of Americans Have Pulled From Savings in 2023

Inflation has undoubtedly put a dent in what Americans are able to afford, forcing many to pull from savings for essential purchases. 

Ultimately, 49% of Americans say they've pulled from their retirement or emergency savings in 2023. Americans were relatively reluctant to touch their retirement savings (26%), with more pulling from emergency savings (44%). 

It's smart to stash money away for retirement or a rainy day, but 44% of Americans do not regularly put a portion of their paycheck into savings. That includes 48% of Gen X — an unsettling finding given the generation's impending retirement timeline. 

About 81% of Americans say inflation has made it harder to follow through on their financial goals, with savings being a key example. Only 29% of Americans say saving for retirement was a financial goal this year. Of that group, fewer than half (42%) were actually able to save. 

Overall, 40% of Americans say their savings got worse in 2023, with just 26% saying their savings are in good shape.

1 in 4 Americans Say They Won't Be Able to Retire Before 80

About 62% of Americans say they are not on track to have enough saved for retirement, including nearly 2 in 3 baby boomers (63%). In fact, a majority of Americans (53%) say they are not currently saving for retirement.

Although the median retirement age is 62, many Americans are doing so poorly financially that they expect to work at least an extra decade. 

About 37% of non-retired Americans say they won't be able to retire until they're at least 75, and 23% say they won't be able to retire until at least 80.

1 in 4 Americans Have a Net Worth of $0 — or Less 

With high costs for basic necessities, Americans are saving the lowest share of their paychecks in 15 years. That finding, combined with Americans' large debt balance, means many have little to no valuable assets. 

As a result, about half of Americans (52%) report their net worth is less than $30,000. A staggering 25% of Americans say their net worth is $0 or negative — meaning they owe more in debt than the value of their assets. 

Gen Z has the lowest net worth of any generation, with more than half of respondents (54%) saying their net worth is less than $10,000. 

Meanwhile, 41% of baby boomers estimate their net worth is $100,000 or more, compared to 33% of millennials and 17% of Gen Z. At the same time, boomers were more likely than other generations to say they have a net worth of $0 or less, suggesting a stark level of inequality within the cohort.

Housing Affordability Prevents Many From Becoming Homeowners

One of the main ways Americans can increase their net worth is through homeownership, but that option is unrealistic for many renters. About 83% of non-homeowners say they want to buy a house but can't because of financial reasons. 

The most common reasons why non-homeowners can't purchase a house include: 

• They don't have enough for a down payment (53%)
• Homes near them are too expensive (43%)
• High interest rates (36%)
• They are in too much debt (29%)
• They are prioritizing other financial goals (21%)
• They don't want to own a home right now (17%)

Additionally, some homeowners are starting to wonder if they should give up their most important asset to buy some financial breathing room. 

About 22% of homeowners have considered selling their house to pay for urgent bills or expenses, including 7% who say they actually went through with a sale. 

46% of Americans Have Borrowed Money From Family or Friends in 2023

With more people living paycheck to paycheck, nearly half (46%) of Americans say they have borrowed money from family or friends so far this year. Young Americans, often locked out of homeownership and other financial milestones, still rely on their parents in many cases. 

About 24% of Americans say they receive financial support from their parents, including 46% of Gen Z adults and 31% of millennials.

Overall, just 61% of Americans consider themselves financially independent. About 19% of Gen Z adults and 27% of millennials listed becoming financially independent as a goal for 2024. 

5 in 6 Americans Regret Not Doing More to Improve Their Finances 

Americans are closing out the year with financial FOMO. About 83% say they wish they would've done more to improve their finances in 2023. 

About 2 in 3 Americans (65%) say they regret not doing more long-term financial planning. Nearly 46% say they're still trying to recover from poor financial decisions they made when they were younger. 

Younger Americans are especially self-conscious about their financial situation. About 3 in 5 Gen Z Americans (59%) say they're embarrassed about their finances, compared to 53% for all Americans. An additional 37% of Gen Z admit they're not financially responsible, compared to 25% for all Americans.

46% of Americans Are Insecure About Their Lack of Financial Knowledge

When facing economic headwinds, half the battle is knowing what to do with your money. But 46% of Americans admit they're insecure about their lack of financial knowledge. 

Only 39% say they'd be able to afford financial planning services, leaving the majority of Americans to search elsewhere for financial advice. 

Many young Americans find advice from less-than-reliable sources. About 26% of millennials and 17% of Gen Z say they get financial advice from social media influencers. Nearly half of Gen Z Americans rely on financial advice from their parents (47%). 

Conversely, 48% of baby boomers say they don't get any form of financial advice, presumably relying on lived experience. 

Overall, Americans get their money advice from: 

• Google/online (32%)
• Friends (28%)
• Parents (28%)
• A partner/significant other (24%)
• A financial planner (22%)
• Social media influencers (18%)
• Educational courses (e.g., high school, college, continuing education, online course, etc.) (17%)

Financial Secrets: Millennials Are More Likely to Misrepresent Their Money Situation

With finances intimately linked with social status, about 45% of Americans, including 53% of Gen Z and millennials, admit to misrepresenting their financial situation to make it look better. 

Millennials are also disproportionately likely to keep financial secrets. Compared to the average American, they are:

• 59% more likely to say they have a secret credit card no one knows about
• 53% more likely to say they have secret debt
• 44% more likely to say they've hidden expensive purchases from a significant other

Does Money Buy Happiness? Half of Young Americans Say Yes

At a time when Americans are more stressed than ever and struggling to get by financially, more than one-third (37%) say money would buy them happiness after all. Gen Z (50%) and millennials (45%) are nearly twice as likely to say money buys happiness as Gen X (27%) and baby boomers (23%).

The outlook gets more bleak from there. About 46% of millennials say money is more important than their passions, and 41% of millennials say their financial health is more important than their personal health. 

Overall, nearly two-thirds of Americans (65%) say finances are the most stressful part of their lives.

Still, the vast majority of Americans are hesitant to sacrifice their free time to earn more money. About 79% say they'd prefer a healthy work-life balance while earning a mid-range salary — over a poor work-life balance that comes with a high salary. 

Gen Z and millennials, however, are standing by their opinion that money buys happiness. Contrary to conventional wisdom, younger generations (26%) were more likely than older generations (16%) to say they'd opt for a poor work-life balance and high salary.

After a Year of Reduced Spending, Most Americans Expect to Cut Back Again in 2024

About 93% of Americans say they cut back on spending in 2023 amid rising prices. In doing so, 58% of Americans say they lowered their spending on dining out, and 52% lowered their spending on entertainment. More than 1 in 3 Americans (34%) say they cut back on groceries in 2023. 

Americans appear slightly more optimistic about 2024. About 88% expect to lower their spending, with just 25% saying they plan to cut back on groceries.

Unfortunately, cutting back on nonessentials doesn't always make a key difference in one's budget. 

The average American already spends about 58% of their take-home pay on essential expenses, such as housing, food, and utilities. They also put 14% toward debts and 15% toward savings, leaving just 13% for discretionary spending — the main candidate for budget cuts.

Many Americans Plan to Spend Less on Holiday Shopping in 2023

With many feeling pessimistic about their finances, about 39% of Americans say they'll cut back on 2023 holiday spending. Just 23% plan to increase their spending. 

Americans expect to spend about $534 on gifts this year, a noticeable drop from 2022, when the average shopper said they planned to spend $851. 

About 48% of Americans are concerned they won't be able to afford holiday shopping at all in 2023. Nearly one-third (31%) say they're worried holiday shopping could put them in debt.

Americans Expect 2024 to Be Better Than 2023

Although Americans generally seem discouraged about their finances and still plan to cut back in 2024, most remain surprisingly optimistic about 2024. In fact, 58% of Americans say they'll be doing better financially at the end of 2024 than they are right now. Just 11% think they'll be worse off. 

Some are already reporting progress, with 33% saying their finances have improved since the start of 2023, compared to 29% who say their finances have gotten worse. 

Despite that optimism, many Americans who are looking at their finances from a wider lens feel disappointed. About 42% say they're doing worse financially than their parents were at their age, compared to 35% who say they're doing better.

Methodology

The proprietary data featured in this study comes from an online survey commissioned by Clever Real Estate. One thousand Americans were surveyed Aug. 30-31, 2023. Each respondent answered up to 25 questions related to their 2023 and 2024 financial goals and personal finances.

About Clever

Since 2017, Clever Real Estate has been on a mission to make selling or buying a home easier and more affordable for everyone. 12 million annual readers rely on Clever's library of educational content and data-driven research to make smarter real estate decisions. To date, Clever has helped consumers save more than $160 million on real estate fees. Clever's research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.

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