Industry News

The No. 1 financial regret of Americans; Regrets? Americans have had more than a few when it comes to managing their money


Quentin Fottrell | Thursday, October 19, 2017

MarketWatch

Regrets? Americans have had more than a few when it comes to managing their money

Regrets? Most Americans have had more than just a few.

Some 71% of Americans express regrets about their ability to manage their money, according to a poll released Tuesday by personal-finance site NerdWallet conducted by Harris Poll. Millennials (those aged 18-34 in this survey) are more likely than the two other age groups to have such regrets (83%), according to the survey. Millennials (those aged 18 to 34) are more likely than Generation X-ers and baby boomers to have such regrets (83%), according to the survey.

But what do people regret the most? No. 1 on the list: Not planning early enough (48%), followed by spending too much on nonessentials (39%), credit-card debt (33%) and not having a budget (32%), according to the survey of 2,000 U.S. adults. That No. 1 regret has so many ramifications for retirement savings and the ability to save up for a down payment on a home. It’s no surprise that baby boomers regret that the most (52%), followed by Gen X-ers (48%) and millennials (43%).

Don’t miss:All the money milestones to hit in every decade of your life

Generation X and millennials are neck-in-neck in regretting spending on nonessentials (43% each versus 31% for boomers). Indeed, half of millennials regret spending money on coffee and also eating out restaurants, while 61% regret fast food and 97% regret bank fees, according to a separate survey released last month of 1,000 people aged 20 to 26 by Durham, N.C.-based Common Cents Lab, a financial research lab at Duke University.

We’re more likely to regret guilty pleasures, said Dan Ariely, behavioral economist at Duke. Between 60% and 85% of millennials don’t regret the money they spend on their local community, health care, utilities, arts and entertainment and education, electronics, groceries, gym and fitness, movies, travel, debt, pharmacies and bars. In fact, there are only four items on the list of 19 categories hat half or less of millennials actually don’t feel satisfied with their purchases.

Also see:Got $1 million to retire? Here’s how long it will last, by U.S. state

The Common Cents study was conducted in partnership with Qapital, a fintech app, a team of behavioral economists cited four positive personal-financial habits of millennials: Put your essentials on autopay (and resist subscription-based gift boxes), spend money on enriching the lives of others, limit impulse purchases (unless it’s just a bottle of Clorox) and don’t sweat the small stuff. Negotiate recurring bills and consider options to consolidate debts.

It also helps to know that small sacrifices can yield big savings. To combat the idea of forgoing lattes in the name of becoming a millionaire, Beth McMillan, a Ph.D. student in the computer science at the University of Oxford, found that, if instead of buying a latte, you invested 3 euros ($3.19 in U.S. dollars) for every day you bought a latte into an account that paid 6% interest for 50 years, you’d end up with 318,135.57 euros, or $337,942.69.

Also read:This country is No. 1 for ‘life, liberty and pursuit of happiness’ (it’s not America)

“Even with rising incomes, many Americans feel financially pinched, with household debt putting a lot of budgets in a choke hold,” NerdWallet personal-finance expert Kim Palmer, said. “If you owe monthly payments on your credit card, mortgage, student loans and other accounts, then it’s hard to feel like you’re getting ahead.” There are simple steps to take such as keeping a lid on recurring payments and subscriptions, and paying off credit-card debt in full.

The good news: Common Cents Lab found 60% to 85% of millennials don’t regret the money they spend on their local community, health care, utilities, arts and entertainment and education, electronics, groceries, gym and fitness, movies, travel, debt, pharmacies and bars. In fact, there are only four items on the list of 19 categories hat half or less of millennials actually don’t feel satisfied with their purchases: coffee, restaurants, bank fees and fast-food.

More from MarketWatchThe lower your self-esteem, the flashier your credit cards

What you could buy with the money you waste on ATM fees

40% of Americans won’t date someone with this financial problem

This article was licensed through Dow Jones Direct.

Share

Tagged in: industry news

Contact us

Learn how FIS can help you stay on top of industry trends and address your business challenges.

Contact us