Retirement Savers Are More Resolved to Meet Their Goals Next Year

A choppy stock market and uneven economy may be jolting Americans into saving more for retirement and other goals, a poll of financial New Year’s resolutions shows.

Some 37% of Americans say they are considering a financial resolution for 2016, up from 31% a year ago, according to the annual survey from Fidelity Investments. This uptick comes after a year in which stocks have shown little return other than their dividend, and a dramatic 10% plunge in August —followed by a recovery in the fall—called attention to the market’s fickle nature.

Fewer people made financial resolutions last December, following three successive years of double-digit market returns. The S&P 500 returned 16%, 32%, and 13% in 2012, 2013, and 2014, respectively. Those sweeping gains may have lulled savers into a sense of complacency about reaching their goals.

The most common financial resolutions are to save more, spend less, and pay down debt. Many abandon these and other yearly pledges quickly, and possibly at considerable cost. That may help explain why younger generations are most likely to make a financial resolution—they have not tried and failed as often. According to the survey, 43% of millennials, 42% of Gen Xers, 35% of boomers, and 21% of seniors will resolve to do better with their money next year.

Why resolutions work

The good news is that those who set themselves a goal tend to reap significant rewards. Among those who made a financial resolution last December:

• 51% feel strongly they will be better off financially in 2016, vs. 38% of those who did not make a financial resolution.
• 45% say they are in less debt, vs. 33% of those who did not make a financial resolution.
• 43% say they are in better financial shape, vs. 38% of those who did not make a financial resolution.
• 43% strongly agree they will increase retirement savings by more than 1% in 2016, vs. 22% of those who do not make a financial resolution.

Of course, just the act of making a financial resolution does not guarantee success. But it signals a commitment that leads to a higher success rate relative to those who make no such pledge.

Among the newly resolved, long-term financial goals outnumber short-term financial goals two to one; the most popular resolutions by far are socking away more money in an IRA or 401(k) plan and saving for future health care costs, Fidelity found.

Highest on the list of short-term goals is building an emergency fund, followed by paying down credit card debt. This jibes well with the top list of financial concerns in the survey, which include getting hit with unexpected expenses and the soaring cost of retiree health care.

Sticking to a financial resolution isn't easy. Top reasons given for failing last year include being unprepared for unforeseen expenses and not setting encouraging milestones to celebrate along the way. According to the survey, those who succeeded in reaching their goals last year found it most valuable to first calculate the 12-month impact of their commitment. Saving an extra $200 a month becomes easier when you think about having an additional $2,400 a year from now.

It helps to mark your progress and give yourself a reward for reaching your goal. Setting up auto contributions or payments is also effective, the survey found. About half of respondents said that negative reinforcement is useful—i.e., subjecting themselves to specific consequences if they fail. A financial resolution, it seems, is only as good as your plan for making it come true.

Read next: How Debt and Denial Are Reshaping Retirement