Do you wish you had handled your money differently over the years? Do you have a particular financial regret? If so, you have lots of company.
Eight-five percent (85%) of respondents to a recent Bankrate.com survey admitted having at least one regret about how they managed their money. Bankrate’s ranking of the most common regrets is a list that would tempt some financial planners to point and say, “See? See? I told you so!” But I’m not that guy.
- Failure to start saving early enough. Nearly one-fifth (18%) of those surveyed say they wish they had started earlier and saved more for retirement. While this regret was most common among survey participants approaching 65 (25%+) even younger people expressed concern about it. One respondent shared a too-common tale of getting caught up in student debt and other obligations in her 20’s and 30’s and feeling she didn’t have enough money to start saving for retirement. This is why it’s so important to “pay yourself first” via your employer’s 401k or some other automated savings plan.
- Not saving enough for emergencies. I was surprised (but pleased) to see this is of most concern among younger people. Even if they haven’t achieved the goal, at least understand the importance of stashing 3-6 months of living expenses for use in case of a major disruption, such as job loss, major illness or massive home repair.
- Taking on too much student loan debt. Sadly 9% of survey participants regret what it cost them to get an education. College has become such an investment that students and their parents really must put a sharp pencil to the costs associated with various schools and ask whether college is truly necessary for success in the young person’s field of interest.
- Too much credit card debt. Another 9% regret making the plastic beg for mercy. Honestly, I thought that number would be higher. We Americans still haven’t learned how to live within our means, even when that means living without.
- Not saving enough for children’s education. See #3. Parents who want to help their kids avoid student debt need to start early. Open a tax-deferred 529 educational savings account when your bundle of joy arrives, and contribute every month. Encourage family members to make contributions, too, as birthday or holiday gifts to the little one.
- Buying more house than we could afford. This can really undermine your efforts to save for the future. Remember: You don’t have to use every mortgage dollar the bank offers to lend. The extra $500 or $800 you pay every month for space (or status) you don’t need soaks up the savings you make in other areas of life. It takes a lot of skipped Starbucks lattes to cover a too-big mortgage payment.
- “Something else.” There’s no elaboration, but it doesn’t take much imagination to think of stuff that might fall into this category: Attempting to day-trade in stocks. Buying expensive cars every couple of years. Falling for a get-rich-quick scheme. Co-signing a loan. It’s a jungle out there.
- No Regrets. The 17% of respondents who claim they have no money-related regrets make me channel Dana Carvey’s arched-eyebrow Church Lady character and say, “Well, isn’t that special.” If true, my hat’s off to those folks for their intelligence, discipline – and good luck.
Don’t feel bad if you’ve made one or more of these mistakes. It’s all part of being human and growing. With some effort you can change your miscue from a potential regret into an awesome success story.