Whether it’s the hottest inflation in four decades or this year’s abrupt end to the lowest borrowing ever, Americans’ finances costs haven’t had it easy in 2022 — and most aren’t expecting their wallets to feel any better in the new year. About 2 in 3 (or 66 percent) of Americans don’t expect their personal finances to improve in 2023, according to a new Bankrate poll. That total includes 36 percent who expect their financial situation to remain about the same, along with 29 percent who expect their finances will worsen. Slightly more than 1 in 3 Americans (or 34 percent) have hope that their personal financial situation will improve in the new year. The findings highlight next year’s rocky economic outlook, as experts warn of an increasing likelihood of a recession amid the Federal Reserve’s rapid rate hikes. High inflation on everyday essentials such as gasoline, housing and food is also biting into Americans’ purchasing power. Inflation is high and there isn’t a lot of optimism that it will come down in a meaningful way. Even among those expecting their finances to improve in 2023, just 19 percent felt that would be due to lower inflation. — Greg McBrideCFA, Bankrate chief financial analyst Key takes away more than 1 in 3 (or 34 percent) Americans expect their finances to improve in 2023, versus 29 percent who expect their finances to worsen and 36 percent who see their financial situation staying about the same. . The majority of Americans who say their finances won’t improve next year (or 63 percent) say continued high inflation will be to blame. More than 2 in 5 Americans who expect financial improvement next year (or 41 percent) say making more money at work will help them, followed by 30 percent who credit having less debt and 25 percent who attribute a change in life circumstances. Paying down debt, budgeting better and saving more money for emergencies are among Americans’ top financial goals for 2023. Nearly 3 in 10 Americans see their finances worsening next year Americans had varying degrees of concern about their personal finances heading into 2023. Of the 29 18 percent expect their finances to get worse in the new year, 18 percent see their finances getting somewhat worse, while 11 percent are bracing their finances to deteriorate significantly. That was also true for Americans expecting improvement. The 34 percent who foresee a boost to their finances include 10 percent who expect their finances to get significantly better and 24 percent who expect it to get somewhat better. White Americans are more than twice as likely as Black Americans to expect their finances to get worse next year (at 32 percent and 15 percent, respectively), while 27 percent of Hispanic Americans expect their wallets to worsen. At the same time, 51 percent of Black Americans expect improvement versus 30 percent of White Americans and 37 percent of Hispanic Americans. Nearly half of individuals earning $100,000 or more a year expect improvement next year (at 46 percent), compared with 35 percent of those making between $80,000 and $99,999, 28 percent of those earning between $50,000 and $79,999 and 35 percent of those earning under $50,000. Younger generations were also more upbeat about their financial prospects next year, with 48 percent of both Generation Z (those between the ages of 18-25) and millennials (ages 26-41) expecting their finances to improve in 2023, versus 28 percent of Gen X (ages 42-57) and 22 percent of baby boomers (ages 58-76). Americans with poor financial outlook point to inflation The Americans who don’t expect their finances to improve next year are overwhelmingly pointing fingers at inflation. More than 3 in 5 (or 63 percent) say continued high inflation will be the reason their finances do not improve, more than any other category, including: The work of elected officials (29 percent); Stagnant wages or reduced income (27 percent); and changing interest rates (25 percent). Meanwhile, 18 percent each say the amount of debt they have or the amount they make from their savings or investments will be what they hold back. Another 16 percent blame a change in life circumstances, along with 12 percent who say they don’t know why they don’t expect their finances to improve and 8 percent who blame something else. Inflation was the No. 1 reason why these Americans don’t expect to see financial improvement next year across demographics and socioeconomic categories, though some indicated more concern about price pressures than others — particularly older Americans. Two in 3 Gen Xers and boomers (or 66 percent and 73 percent, respectively) blame inflation for their expected troubles next year versus 38 percent of Gen Z and 55 percent of millennials. Fed research shows inflation often hits older generations harder, as they’re more likely to be nearing the end of their careers or living off a fixed income. Younger generations were also more likely than their older counterparts to say their pay has kept pace with inflation in a separate Bankrate poll from September. Here’s what Americans think could potentially help their wallets next year Even if inflation falls next year, households aren’t expecting it to help them much. Just 19 percent of those expecting better days for their wallets in 2023 say lower levels of inflation will be what helps them out. Instead, the most prominent reason for those gains are: Making more money at work (41 percent); Having less debt (30 percent); A change in life circumstances, such as family or health (25 percent); and Earning more money on their savings and retirement investments (24 percent). An additional 5 percent say they don’t know why they expect their finances to improve next year, while 9 percent cited something else. Americans most likely to say paying down debt or budgeting better is their top financial goal for 2023 More often than not, Americans have a specific set of financial goals for 2023, even as high inflation makes it tougher to budget and save. The top goals include: Paying down debt (19 percent); Budgeting spending better (16 percent); Saving more for emergencies (13 percent); saving more for retirement (9 percent); Many Americans are also prioritizing finding a higher-paying job (8 percent), saving for a non-essential purchase such as a vacation or big-ticket item (7 percent), buying a new home (5 percent) or investing more money ( 5 percent). Paying down debt and budgeting better were the top two goals for all Americans, except for the highest-income households, whose top two goals were paying down debt (17 percent) and saving more for retirement (16 percent). “Americans’ financial goals reflect an expectation of tougher times to come, with households focused on paying down debt, budgeting better and saving more for emergencies in 2023,” McBride says. “High inflation and rising interest rates are squeezing budgets while the additional savings compiled during the pandemic are depleting, highlighting the course corrections Americans are looking to make with their finances.” Methodology Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 3,656 US adults. Fieldwork was undertaken on November 15-18, 2022. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both upfront quotas during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.