Will consumers follow though on boosting savings rates?

A recent survey indicates that half of Americans over the age of 30 plan to save more this year, and more than half plan to reduce debt. But are these goals an indication that people are finally facing up to their financial responsibilities -- or simply yet another example of New Year's resolutions that will be forgotten before summer?

Good intentions greet the new year

The New York Life Insurance Company-sponsored survey asked more than 1,000 adults aged 30 and over about their household financial goals for 2012. On the face of it, the numbers seem to show that many hope to do the right things in 2012:

• 50 percent of those surveyed say they plan to save more this year than last year.
• 57 percent plan to reduce their debt.

While those are certainly good intentions, the follow-through on those goals is the tricky part. Since the Great Recession, there have been fitful signs of improved fiscal responsibility, but no sustained improvement in behavior. But could 2012 be the year more people follow through on their financial goals?

The facts show shaky savings performance

Looking at the savings behavior of Americans in terms of performance rather than promises, the picture isn't quite so optimistic:

• The Great Recession prompted only a short-lived improvement in U.S. personal savings rates. Savings rates rose from 2.4 percent in 2007 to 5.4 percent in 2008, and stayed above 5 percent in 2009 and 2010. Last year, however, saw a steady slippage in savings rates, down to 3.9 percent in the third quarter (the most recent period available).
• Similarly, the initial reaction to the recession was to reduce personal debt. Federal Reserve figures show declines in consumer credit outstanding in 2009 and 2010 -- but then a steady increase throughout last year.

It will take more than a year or two of good behavior to make a dent in the savings and debt problems faced by many American households. So far, the numbers haven't shown that the average household is able to follow through on its good financial intentions in a sustained way.

Why this year could be different ... or not

So will 2012 be any different? You could make arguments on both sides:

• High unemployment and low interest rates could hamper improvement. The unemployment rate remains high at 8.5 percent. Plus, with interest rates on CDs, savings, and money market accounts near zero, people are getting little help from income on accumulated savings. On the other hand ...
• Employment has been improving and interest rates for borrowing are low too. While the unemployment rate is high, it has come down in each of the past four months. More people going back to work means more money that can be put towards savings or debt reduction. Also, the flip side of low interest rates is that they have softened the burden of existing debt, making it more manageable.

Ultimately, though, the difference-maker is less likely to be a change in conditions, but rather a change in individual behavior.