You've made some life decisions that you've regretted, and some of those decisions surely involve money. What sort of money mistakes have you made?
Don't be shy about admitting your financial mistakes. According to the latest version of Finder.com's annual America's Biggest Money Mistakes survey, you have 192 million fellow Americans to keep you company. More than three-quarters (78.3%) of respondents claimed to have made a money mistake in their lifetime. We're surprised that number isn't closer to 100%!
As Finder.com Consumer Advocate Jennifer McDermott says, "It's understandable that so many have made a money mistake in our lifetime – we're only human! However, while a slip-up doesn't need to derail our entire financial wellbeing, it's important to recognize the triggers to make better choices in the future."
What's the most cited financial mistake? By far, the winner was spending too much money on fun activities such as shopping, vacations, or dining out. Almost 64% of respondents claimed this financial error. "Blowing too much on fun is the number one money mistake Americans are making. It's easy when you're swept up in the moment to only listen to what makes us feel good right there and then, whether that's a new dress, another drink or booking a last-minute vacay," empathizes McDermott. "However, it's important to assess how you're likely to feel after spending that amount of money. Will it still seem like a good idea when the credit card bill arrives?"
Women were more likely to admit this overspending, at 66.2% compared to 58% of men. Are men more unwilling to admit financial mistakes in general? Truth be told, there was only a one-percentage point difference between men and women who admitted past financial mistakes (78.6% for women, 77.6% for men). Even so, there are some insightful differences in the types of mistake claimed more by either sex.
Along with overspending, women were also more likely to regret letting their partner control the family finances (16.3% to 13.2% for men).
The categories where men had much greater regrets than women suggest tendencies for riskier behavior. Almost one-quarter (24.5%) of men surveyed regretted making a bad investment, compared to only 11.4% of women. In addition, 14.7% of male respondents reported too much gambling as a fiscal error, compared to only 6.3% of female respondents. (Perhaps testosterone trumps proper risk assessment.)
Men and women reported the second-largest financial regret at about the same rate – 20.2% of women and 20.1% of men regretted dropping out of college.
It's fair to call dropping out a financial regret based on data from the Bureau of Labor Statistics (BLS). As of 2017, college dropouts earned a median wage of $774 per week, well below the median of $907 for all workers. Those with bachelor's degrees had a median weekly salary of $1,173. Unemployment rates show a similar pattern (4.0% for college dropouts, 2.5% for those with bachelor's degrees).
"The number of people naming dropping out of college as a money mistake shows there's a need for greater discussion about career pathways. For those yet to attend, it's worth taking some time to research and determine your options before locking in your major," suggests McDermott. "This may come in the form of a gap year or entering into the world of internships – both of these can inform your decision and help you decide what industry is right. There's no rush! Doing this could save you a lot in the student debt you accumulate by dropping out without earning a degree."
The survey found some generational differences, but perhaps not as much as you might expect. Millennials and Generation X-ers were almost equally likely to admit financial mistakes (78.9% to 79.1% respectively). Baby boomers were least likely to admit a money mistake at 74.1% – a questionable number, because baby boomers have had more time to make financial mistakes than the other generations.
Individual money mistakes were a bit more predictable along generational lines. Millennials were far more likely to admit overspending on fun activities (70.8%) than generation X-ers (59.7%) and baby boomers (46.0%). Baby Boomers were more likely to regret bad investments (26.6%) compared to generation X-ers (17.3%) and millennials (11.4%).
Other financial regrets include overpaying for a wedding, getting caught in an online scam, and having children. It's odd to consider having children as a financial regret, because we'd like to think that your investment in a child isn't for financial payback. Still, the average cost of raising a child born in 2015 through the age of 17 is estimated at over $233,000, according to a report released by the U.S. Department of Agriculture– and that value probably hasn't been decreasing.
So, you've made some mistakes with your money. Who hasn't? (Outside of the nearly one-quarter of respondents whom we believe simply won't admit it.) The real point is that you learn from those mistakes and don't repeat them. If you continue to make money mistakes, eventually you won't have any money left for future financial foul-ups.
Don't add to your money regrets by ignoring your financial report card. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.
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