Only one-fifth of American citizens say they have nothing to regret about in financial questions, while 73% of them have made at least one of 6 specific financial mistakes that they now regret about, according to a new survey. Check the article to learn what these mistakes are and what you can do to avoid them.
Americans’ financial regrets
According to the survey, that has been carried out by Bankrate, only 20% of adults in the USA don’t have any financial regrets, while 73% of survey participants have made a specific mistake that they now regret about. Here are the survey’s results:
- Financial regret – % of respondents.
- Not saving for retirement early enough – 22%
- Not saving enough for emergencies – 16%
- Too much credit card debt – 9%
- Too much student loan debt – 9%
- Too much student loan debt – 9%
- Not saving enough for children’s education – 8%
- Buying more house than they could afford – 2%
- Something else – 7%
- None – 20%
There’s nothing surprising about these results. It is a well-known fact that Americans are not so good at saving money for retirement. Moreover, an average American family with credit cards owes $16,048 at an interest rate of over 15%.
Student loan debt has increased dramatically in the past few decades, and the average 2016 bachelor’s degree recipient with loans finished college with $37,172 in student debt, which is the highest record ever. What’s more, most Americans know nothing of the tax-advantaged college savings options and that mortgages can be gained with a 45% debt-to-income ratio, which can be too much to handle.
How to avoid financial regrets in your life
Cheer up, you don’t have to be one of those 73% who have made financial mistakes. Even if you are already one of them, you can take control over damage and change the situation for the best. Here’s how to avoid such mistakes:
Plan ahead retirement savings
If you haven’t saved any money for retirement yet, the best time to start doing it is right now. The longer your savings grow, the less trouble you will have when you retire. If you have an employer-sponsored retirement plan like a 401(k), you will be surprised at what a big change can be caused by a small increase in contribution.
If you have no plan at work, think of opening IRA, either traditional or Roth. The tax benefits can be thrilling, and small contributions can make large increases over time. Even if you started to save too late, IRAs and 401(k)s let people over 50 to add extra to their accounts.
You should always have at hand a sum that would cover from 3 to 6 months of your usual expenses.
Credit card debt
If your credit card debt is too big, try to get it under control. If you have high-interest card debt, there is no use in saving money. You can get yourself a balance-transfer credit card and pay your debts more aggressively so that you could save more money.
If you already have student loan debt, unfortunately, there’s little you can do about it. Actually, this kind of debt is a rare form of indebtedness that can’t be discharged in a bankruptcy. However, if you find the correct repayment plan and learn about the available forgiveness programs, you can cover your student debt in the most favorable way.
The 2 main vehicles that can help you with your college savings are the 529 Savings Plan and the Coverdell ESA. They both allow you to invest your money and grow them tax-free till you take it out to pay for your education.
For sure, many of us have different financial regrets in our lives, but it does not have to be this way for you. And even if you already regret about anything, you still have time to change it. Use our personal finance guide to improve your money situation and learn how to invest with profit and small risks.