Consumers are entering the new year with a greater degree of caution about their spending habits than they did in 2023, according to Bank of America’s newest survey.
The ‘Consumer Checkpoint: Out with the old, in with the new?’ report found that 59% of respondents plan to spend less in order to reach their financial resolutions this year.
In comparison, 54% of consumers said they were planning on cutting spending entering 2023.
The top financial resolution for 2024 was identified as increasing savings, followed by paying off credit card debts and building an emergency fund. This remained the same as the year prior.
To follow their plans to cut spendings in 2024, 42% of consumers intend to deprioritize spending on dining and takeout throughout the year.
Other categories consumers will spend less on include social events, shopping, travel, streaming services and rideshare services.
In addition to reducing spending, 48% of respondents would consider sticking to a budget and 38% would utilize high yield saving accounts to achieve progress towards their goals.
The Bank of America research also provided a look back of consumer’s spending habits in 2023.
Throughout the year, spending growth per household of older generations, such as baby boomers and traditionalists, was stronger than younger generations, like millennials and gen z.
In particular, the gap in year-on-year spending growth between baby boomers and millennials averaged around 2.7 percentage points.
Bank of America expects the spending gap to narrow in 2024 as one likely driver of the difference last year was the historically strong 8.7% cost-of-living adjustment to retiree’s social security incomes.
This year, however, the cost-of-living adjustment is a more modest amount of 3.2%.