According to a recent Bankrate survey, three in four Americans have experienced financial regrets over the last 12 months. This research points to an urgent need felt by millions across the country. Almost 4 in 10 respondents said they were sorry for their financial mistakes. They especially stressed problems with saving for retirement, emergency costs, and their children’s education. This is a troubling trend as it highlights the lack of confidence and awareness many people face as they go through more complicated financial journeys.
Certified financial planner Jake Martin of Ohio says the time to listen to these regrets is now. As a small-angle correction, he does recommend that people pay attention to short-term financial needs before thinking about long-term savings. “Starting late is better than never starting at all,” he states, encouraging those who may feel behind in their savings journey to take action now.
Understanding Financial Regrets
The latest Bankrate survey shows that half of Americans are losing the savings war and drowning in the remorse over never saved enough. Of those surveyed, one in five shared that their largest financial regret was accruing too much debt. This debt was mostly accrued on credit cards or student loans. This is an important statistic as it helps to understand the burden that high-interest debt has, as that debt often accrues interest rates over 15%.
According to financial planner Stephen Kates, this is the case, with regret increasing as one ages. “One consistent takeaway from this study every year is the durability of ‘not saving enough for retirement’ as a regret,” he explains. As retirement draws near, the motive to address these regrets grows stronger. A lot of people start to face the financial truths that they might have glossed over before.
Despite knowing what they regret, 43 percent of survey-takers confessed they haven’t improved their financial situation in the last year. It seems that it’s still not easy enough for people to take action. This stagnation can be explained in part by high-interest debt that’s gone unpaid.
Strategies for Improvement
Long-term financial planners such as Ashton Lawrence of South Carolina encourage working on what’s controllable in all expenses to build wealth and secure a better financial future. He calls this practice “controlling the controllables,” and it starts with figuring out where all the discretionary spending is leaking. Lawrence suggests closely analyzing your spending. Instead, concentrate on reducing discretionary spending on things such as eating out, subscription streaming services and other impulse buys to increase your nest egg.
Martin stresses that during this early work, high-interest debt should be the first priority—not just before focusing on savings. His recommendation is for one to pay down the credit card debt first as that is usually the most oppressive. “Credit card debt is a debt that should never exist. Pay it down, prioritize it down,” he recommends. On the other hand, he agrees that debts such as student loans and mortgages need a much different approach.
If you’re getting a late start on saving, Martin has the best advice of all. Set a savings rate of 20-30%. This target can create a more secure financial future, especially for individuals in their 40s who may need to catch up on retirement savings.
The Path Forward
As Americans continue to process their fiscal failures it’s critical for them to start making changes in order to do better. Well-timed debt repayment and careful management of discretionary spending can put one on a course toward greater financial stability.
Martin and Lawrence provide guidance to take back the power over your money. It’s true, but their invaluable counsel is indispensable for those traveling down this road. With a proactive approach and a willingness to change spending habits, individuals can work towards overcoming their financial regrets and building a more secure future.