A recent survey we conducted with Ipsos found that 72 percent of parents overall – and 80 percent of Millennial parents (ages 18-34) – have debt reduction as a top financial priority for 2019.
Although most parents (67 percent,) say they plan to save more this year, when we asked them what they’d do with a $5 million lottery jackpot, 58 percent ranked paying off debt as one of the top three uses for their winnings. (In comparison, only 33 percent say they would use hypothetical lottery winnings to save for retirement.)
“While reducing debt can be a worthwhile endeavor, a singular focus on it at the expense of other planning can be dangerous to a family’s overall financial well-being. Adopting a protection-first financial planning approach is crucial.” —Brian Madgett, VP
The future looks bright…
Although many families carry debt that might prevent them from achieving financial stability, parents are optimistic about their finances in the year ahead. A majority of parents expect their finances to improve this year, and 61 percent believe they will be better prepared for the unexpected. Younger parents have a particularly sunny outlook, tying their ability to pay down debts for a brighter financial future.
… but optimism doesn’t always lead to action
The findings show a disconnect between expectations and reality when it comes to financial planning. Just 28 percent of parents believe it’s important to have a financial plan in place to care for their children in case something happens to them, and fewer parents than last year (30 percent versus 38 percent) are planning to seek expert advice in 2019. However, younger parents – despite their focus on debt – are more likely to recognize the importance of long-term planning, with 44 percent saying they will seek professional financial planning advice this year.
“It’s encouraging to see a more positive outlook for 2019, especially among younger parents who have the benefit of time, but optimism can only carry us so far,” said Madgett. “Finding a qualified financial professional who can help identify your family’s needs and financial goals and work with you to create a plan is an important step toward ensuring parents’ optimism can be sustained no matter what life might bring.”
Read the full survey results here.
Check out the related infographic.
New York Life
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