Most of us have room for improvement when it comes to saving money. We dine out too much, buy fancy cars we really can’t afford, and spend more time watching television shows than thinking about our future selves. We try to remedy this situation by including money goals into our New Year’s resolutions, but there are at least two major expenses Americans are not even trying to cut back in 2016.
Saving more money is the most popular resolution this year, beating out exercising more, eating healthier, and losing weight. The finding comes from the latest American Express Spending and Saving Tracker, which polled more than 1,800 adults in the general population as well as an affluent demographic with a minimum annual household income of $100,000. Savers have lofty expectations. On average, respondents plan to save $15,317, up from only $11,292 last year.
Reaching savings goals is easier if you know how to spend money on what you truly value. This year, Americans plan to open their wallets for travel expenses. Vacation planning is at a new high, with 70% of respondents expecting to travel for leisure, compared to 66% in 2015. Thirty-five percent plan to spend more on travel in 2016. Domestic travel is the top form of vacationing, and the majority of Americans will journey with their significant others. Interestingly, more couples with kids do not plan to bring their children on vacations this year than last.
“While Americans are planning to save more, many are also planning vacations and getaways,” Jed Scala, senior vice president of consumer lending at American Express, said in a press release. “With the large majority of Americans planning to spend on leisure travel this year, we could see an increase of travelers on the roads, at the airport and at sea in 2016.”
Home is where the budget is. The only expense ranking ahead of travel is home improvement. Forty-three percent of Americans plan to spend more on their homes in 2016 than they did in 2015. Budgets are expected to expand for indoor home improvements/decor, outdoor landscaping improvements, and remodeling. Homeowners who say they will undergo significant home renovations expect to spend an average of $10,881 on those projects. Even millennials say they will make more trips to their local hardware store.
“Whether it’s big renovations or a small repair, more millennials in particular will spend more on improving their homes. Significantly more of these 18-34 year olds plan a home improvement project than the overall population (51% millennials vs. 43% overall), explains the report. “Perhaps millennials are more inclined to spend on their homes because they anticipate a life milestone, such as moving (22% millennials vs. 14% overall).”
Recent market trends appear to support the findings. The hotel industry is booming with high occupancy and record room rates. STR, a global provider of competitive benchmarking, says 865 new hotels are set to open in the United States this year, bringing more than 100,000 new rooms nationwide. Compared to last year, the U.S. is experiencing a 21% increase in rooms under construction. Meanwhile, Home Depot continues to see sales growth. In the third quarter, all of the home improvement’s merchandising departments posted positive comps, with appliances, tools, plumbing, decor, lighting, hardware, building materials, and indoor gardening trending above average.