Have you ever spent $200 on a subpar dinner with your friends, stayed in a low-paying job because your imposter syndrome thought that’s what you deserved, or realized, in your 50s, that you should have been contributing more to a 401(k)? You’re not alone. We all have our own financial regrets. In fact, 81% of American adults had financial regrets in 2021.
And it turns out that those regrets fall into two major buckets, according to New York Times bestselling author Daniel Pink, as outlined in his new book, The Power of Regret, which collected the financial regrets of 16,000 people in 105 countries. The first is not saving enough money—plus not being prudent with that money (like overspending on vacation, going on an expensive shopping spree or buying everyone a round of drinks … for the millionth time)—while the other is not being bolder in our careers, such as staying in a job we aren’t passionate about or not starting a business when we had the chance.
So how do you move on when that pricey waffle maker you’ve used twice is staring at you from the kitchen? Millie asked you what your biggest money regrets are and then spoke to the experts to figure out how to master them—and how not to make them again.
“Not starting to save earlier.”
This one will likely hit close to home for many of us. When you’re in your teens, early 20s and maybe even your 30s, saving money for tomorrow might seem crazy—or downright unachievable—when you need to spend it on something today.
“Don’t feel too bad about not formally saving at a younger age,” says Myriah Lipke, a certified financial planner (CFP) and director of financial planning at Stone Pine Financial Partners in Media, Pennsylvania. “Motivation is half the battle—and it’s OK if you didn’t feel it back then. Instead of beating yourself up about it, double down and save extra now, if you can.”
In addition, think about other methods outside of a savings account to help maximize your funds. “You could take advantage of tax-deferred or tax-free growth available in retirement plans,” Lipke adds. “Weigh the choice between a Roth IRA or Roth 401(k), for example, to see which election could be in your best interest.”
“Spending nearly $300 on a dinner in Manhattan with people I barely knew for a night I half enjoyed.”
Whether it’s a dinner like this, another round of drinks or a trip you felt pressured to go on, “buyer’s remorse is always unfortunate when you can’t return the product or experience,” Lipke says. “Consider that money spent as tuition for a lesson in when to be discerning with your time and money.” Next time, you might think twice (and FOMO begone!) before accepting an invite from acquaintances for a fancy dinner or that Atlantic City sojourn.
You can also plan and save for fun activities. Many experts suggest the 50/30/20 rule when it comes to budgeting—that is, put 50% of your after-tax income toward “needs” (like bills and groceries), 30% toward “wants” (this is the fun bucket) and 20% toward savings and investments. This way, you won’t regret splurging on activities and purchases next time because you put aside the money to do so.
“Not investing when I was a teenager.”
Hindsight is always 20/20—if you know any teens today, do you expect them to be savvy with their money right off the bat? We expect the answer is “not so much.”
“Instead of seeing this as a regret for yourself, make it your mission to communicate the power of time to those younger than you so they don’t experience the same thing,” Lipke says. “Show them how if they invest a mere $50 a month starting in high school, they could potentially have a million bucks by the time they’re retirement age.”
That may require a little math, but there are calculators that can do that for you.
“I lost my job in my late 20s and spent my 401(k) over one summer instead of rolling it over.”
It may be tempting to dip into those retirement savings when you hit a financial roadblock, like a job loss, but that’s why it’s a good idea to have an emergency fund in place instead. However, while inadvisable, if borrowing from your 401(k) is your only option, there are ways to rectify it.
“Consider your budget when starting a new job and contribute as much as you can to your new 401(k) to help build those savings back up,” says Joan Malloy, a certified public accountant and CFP at MAI Capital Management in St. Louis, Missouri. By starting immediately—and making sure you take advantage of any company matches—you can get your balance looking hefty again soon. In a few months you will barely remember the snag.
“Not getting my company’s 401(k) match earlier.”
Do yourself a favor and don’t calculate what you missed out on. “Focus on what you can control, rather than stress over what you didn’t do,” Malloy says. If you didn’t get the match because you weren’t sure how to get it, email your company’s HR department as soon as possible and ask them how much you need to contribute to qualify.
The Bottom Line
No matter what your financial regrets are, creating a plan now and sticking with it will help you avoid making the same mistakes again. If you need a little extra help, consider working with a financial professional to get you on the right track. Even a robo-advisor can give you the jump-start you need if you’re not ready to go whole hog with a certified financial planner.
Ultimately, don’t dwell on the past—no matter how large of a money mistake you’ve made. It’s never too late to get your finances in order.
Lambeth Hochwald is a New York City-based writer, editor and adjunct professor of journalism at New York University.
Illustration: Laurène Boglio
LEARN MORE: 4 Spending Habits to Break Right Now