FILE PHOTO: A Visa credit card can be seen on a computer keyboard in this image illustration taken on September 6, 2017. REUTERS / Philippe Wojazer / Illustration // File Photo
May 18, 2021
By Chris Taylor
NEW YORK (Reuters) – Sorry, we had a few. Or a lot when it comes to our money.
More than 80% of Americans regret financially, according to a new survey by the personal finance site Bankrate.com. And because of the pandemic, these regrets are a little different than they used to be.
“Usually your biggest regret is not saving early enough for retirement,” said Greg McBride, chief financial analyst at Bankrate. “This year it was a flip-flop: it didn’t save enough for an emergency.”
This is obvious because this entire year appeared to be one major emergency with an ongoing health crisis and millions of job losses. In the April survey, 20% of respondents cited a lack of emergency savings as their biggest regret, compared with 15% two years ago.
That wasn’t the only financial regret: Not saving enough for retirement was barely a second at 19%, followed by excessive credit card debt of 18%. Only 15% said they had no regrets at all.
You may have your own missteps that you need to add to the list: Maybe you didn’t invest in Amazon or Apple years ago, or you invested too much in a hot market tip that didn’t work out. Maybe you are not buying a home or you are buying an expensive home that you cannot afford. Perhaps you are taking on too much student debt that you just couldn’t shake off.
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Any money you regret comes from your personal story – but whatever you have, a financial planner has probably heard it by now.
“The biggest regret I keep hearing is that they didn’t start investing sooner,” says Matt Stephens, a consultant at AdvicePoint in Wilmington, NC. I am always surprised at the persistence of regrets. “
And they are certainly numerous. When we recently asked this question on social media, the answers were immediate and plentiful:
“Stupid timeshare.” “Don’t buy real estate in San Francisco in the late 1990s or New York City after September 11th.” “Don’t invest in bitcoin when it was .50.” “Topping up credit card debt as a young single mom.” “I didn’t fully fund my 401 (k) in my younger years.”
Financial regrets may feel like a very personal problem, but there are quite a few studies out there about what we regret and why. There are two ways to look at it: regret the things you did and the things you didn’t. In any case, these regrets usually determine how you deal with financial problems in the future.
And not necessarily in a productive way in terms of the knowledge gained. Regrets can actually pose a major threat to your financial security, according to the work of Nobel Prize-winning economist Daniel Kahneman. Because of its strong emotional component, regret and related problems like avoiding loss can cause you to make decisions that you probably shouldn’t be making.
“Regret theory suggests that if investors sell at the wrong time and miss profits, regret will affect their judgment and lead to subsequent market timing errors,” said Sarah Newcomb, behavioral economist at research firm Morningstar and author of the book “Loaded: Money, Psychology and How To Get Forward Without Leaving Values Behind.”
“The idea that regretting a financial mistake can lead to subsequent mistakes is important. Emotions are important in making a decision, but they can easily influence us if we overestimate their importance in our mental calculus. “
Of course, regrets can look very different in different phases of life. For this reason, the new Bankrate survey is very divided by generation: It is credit card debt that, with 30% of respondents, is the most threatening over the psyches of younger millennials, while this regret eventually subsides for older generations.
Meanwhile, at 33%, the clear winner for baby boomers is not saving early enough for retirement. In that way, in the face of older Americans’ financial regrets, it’s like a glimpse into the future – a glimpse that could inspire younger generations to make better money decisions now.
“Older age cohorts are concerned that they haven’t saved enough, and that was particularly evident in this year’s numbers,” said Bankrate’s McBride. “That worry really shook her.”
(Adaptation by Lauren Young and Aurora Ellis; follow us on @ReutersMoney or at http://www.reuters.com/finance/personal-finance.)
This article originally appeared on www.oann.com