This article, from MPower Co’s Director of Education Dr. Thia Crawford, is about being human. Let’s agree that we all have made bad choices at times, and our future holds more. Experience is a hard, mean teacher, though. This article may save you some angst when it comes to reflecting on regrets.
Let’s look at the most common financial regrets, first, and then broaden the blog to consider types of regrets, their possible positive contributions, and how to move forward when we have regrets.
Regrets can cause sorrow, grief, and anguish. If that isn’t distressing enough, these feelings can emerge many times and for decades. We may regret what we did that turned out to be a mistake, or we can regret what we didn’t do that, in hindsight, we should have done. Our memory is not always our friend, and, too often, thinking about regrets can trigger stress, anxiety, and even depression.
There are some positive sides to regret, and we will get to those later. First, though, I want to focus on common financial regrets.
What are the most common financial regrets?
The purpose of sharing this list is to encourage you to learn from the regrets of others. Save time and avoid these financial missteps.
Historically, the top regret has consistently been not saving enough for retirement, and it is still a concern of many. Interestingly, though, recent surveys indicate that people have identified that a top regret is not saving enough for emergencies because of the pandemic. I get it. In some ways, the last two years have felt like one big emergency, and it is still ongoing.
What are top financial regrets? From my financial coaching work, I have observed:
- Not enough in an emergency fund/don’t have an emergency fund.
- Not saving enough for retirement.
- Planning to save for a child’s (children’s) college is never convenient, so it doesn’t happen.
- Not learning how to invest/avoiding the risks of investing.
- Buying into timeshares and not being able to get rid of them efficiently.
- Treating a house like an ATM – second mortgages, home equity lines of credit, reverse mortgages, rather than a secure asset maintained to increase in value.
- Not considering pay and benefits when choosing a career.
- Being house poor – buying too big a house or too expensive a house.
- Lacking financial patience and accumulating debt that lasts longer than the items or experiences purchased – “If I want it now, I can always use credit to get it.”
- Accumulating too much student loan debt. Early careerists report it compromises their ability to live the American dream.
- Having a life partner with dramatically different financial values and isn’t comfortable discussing money or working together toward shared financial goals.
And the list could continue!
Is there anything good about regrets? There can be.
Daniel Pink’s newest book, The Power of Regret: How Looking Backward Moves Us Forward points out “A whopping 82 percent say that regrets are at least occasionally part of our lives, making Americans far more likely to experience regret than they are to floss their teeth.”
Dan Pink and his colleagues collected data from nearly 5,000 Americans and then collected thoughts from 16,000 people globally. Too often, we overlook what regrets can do for us. Pink points out there can be some benefits of regrets.
- Regrets can be powerful lessons. We learn strategies that don’t work, and they may help us discover better answers and make better decisions in the future. To do this, we need to look for the small goods in a challenging situation and train ourselves to look for silver linings. Looking for silver linings is working to identify hopeful possibilities that can come from unfortunate situations. What could be positive as a result of this situation?
- Regrets can boost performance. A low grade on a test can motivate a student to study harder for the next exam. A disappointing performance on the athletic field can cause a person to train even more effectively.
- Regret can deepen meaning in life. Regrets can help us fine-tune what is most important and less important. It is how we can grow and mature.
He writes, “To be blunt: if you never look back at younger-you and realize, at times, you’ve been a moron, well, you’re probably still a moron. We wrote ‘Don’t ever change!’ in each other’s yearbooks in high school, but sometimes we need to change. “
Four categories of regrets
He organizes regrets into four main categories, and you’ll quickly see the list of financial regrets fitting into some of these:
Foundation regrets – Not being responsible in financial, educational, or health matters. We focus on what we want now rather than what we value the most.
Boldness – not taking a risk and missing out on opportunities. We play it safe. There is a saying, “We regret most the things we did not do.”
Moral – acting on the temptation to behave poorly. Not doing the right thing can be among the most painful regrets of all.
Connection – unrealized potential relationships. We let friendships die. We neglect people that are important to us.
I also appreciate the insights of author Eric Barker. He stresses that we need to examine our biggest regrets. Flip them, and you can figure out the things that matter most to you. Foundation regrets mean you value stability. Boldness regrets suggest a value for growth. Moral regrets suggest we value goodness. Connection regrets can indicate a value for love.
So how do we use regrets to move forward?
- Disclose. Pink calls it relive and relief. Talk about it with someone you trust. If you can’t talk about regret, journal about it instead. Work to make sense of your regrets.
- Reframe. Start by forgiving yourself that you are human. I often stress to people, “Accept that the past can’t be different. What can be different are your decisions today and in the future.” Treat yourself as you would someone you value.
- Extract a lesson. What did you learn, or what could you learn? What makes you hopeful moving forward?
Dan Pink says, “Regret makes me human. Regret makes me better. Regret gives me hope.” Regrets can do the same for us.
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