The 3 Most Common Financial Regrets

Our lives are filled with an overwhelming number of financial choices and there are certainly some financial matters most of us might have handled differently along the way.  In fact, financial regret is a common feeling experienced by many Americans.  A new survey from notes most respondents experienced some form of financial regret.  While you may not be able to “re-do” your previous choices, it may be possible to make different choices in the future that could lead to more desirable outcomes.  The following regrets are the most commonly cited by Americans.

#1 Not saving enough for emergencies

Neglecting cash reserves is the number one cited financial regret felt by Americans, especially in the wake of the COVID pandemic.  Unfortunately, many Americans are financially unprepared to handle financial emergencies as they arise.  From changes in employment and household expenses to unforeseen health issues or needing to financially support another family member, there are an unlimited number of emergencies where cash will come in handy.  Failing to maintain sufficient emergency funds often leads to excessive consumer debt which, interestingly, is another common regret.

What to do about it?

While we have all heard the expression “pay yourself first” too many times, it is an important approach to building the reserves you need.  Consider earmarking a set amount each month to be transferred to an “off-limits” emergency account.  (Direct banks such as Live Oak Bank can be an attractive option.)  View this savings as any other expense and implement a “pay yourself first” approach.  Maintaining emergency funds of 6 – 9 months of expenses may help prevent unforeseen expenses from derailing the achievement of financial goals.  Opening a home equity line of credit (HELOC) may also help.

#2 Not saving for retirement early enough

The second most common financial regret is centered on retirement planning and waiting too long to get started.  Financial procrastination is difficult to overcome and the long-term nature of retirement planning makes it easy to say “I’ll save more next year”.  The next thing you know, the hectic nature of life gets in the way and 15 years go by without beginning your plan.

What to do about it?

While you might not be able to go back in time and start saving sooner, there may be adjustments that can be made to course-correct for the future.  Developing a current financial plan to gain clarity on the maximum amount you can spend each year, how much you need to save and where to invest as you pursue your goals – may help.

Helping others learn from our mistakes can also be beneficial.  From reminding children and grandchildren to helping colleagues, educating others on the importance of getting started early may help prevent them from having the same regret later in their life.

#3 Taking on too much debt

As the next most common financial regret, using debt to finance spending can be dangerous over extended periods of time, often contributing to the postponement of retirement, home purchases and other goals.  Unfortunately, mismanaging debt is quite common and has contributed to trillion dollars of consumer and student loan debt (Federal Reserve) outstanding today.  As debt levels increase, a larger percentage of monthly income is used to pay interest costs as compared to principal balances, thus beginning the vicious cycle of ballooning debt.

What to do about it?

Working toward eliminating debt is no easy task.  In fact, it may take years to accomplish this goal.  Establishing and monitoring your budget each week is critical to reducing debt. In order to work your way out of debt, you need to avoid incurring any new debt.  Balancing your budget is an important first step as it will help prevent you from spending more than you are earning.

Consolidating your debt through low-cost and low-interest balance transfers may help speed up the process of paying of your debt. Consider searching online at sites such as or to research low-interest offers from multiple credit card companies. This may be especially critical before interest rates climb significantly higher.  Transferring high interest cards to a 0 percent offer could significantly reduce your financing costs as well.  Be careful to avoid excessive balance transfer fees and review the “fine print”.

Also, be sure to pause before committing to excessive levels of student loan debt.  With over $1.5 trillion dollars of student loan debt outstanding, it is common for student loan balances to grow so large they become the equivalent of a mortgage.  It may be difficult enough to pay one mortgage payment – you do not need to be dealing with two.

Interestingly, the three most common financial regrets impact one another over time.  A lack of cash reserves may lead to the occurrence of consumer debt which may in turn lead to the postponement of retirement goals.  A proactive approach to financial planning that encompasses all aspects of your financial picture may help you to address both previous and future financial regrets.  Consider speaking to your financial, tax and legal advisers to determine the most appropriate game plan for you.


Kurt J. Rossi, MBA, CFP®, AIF® is a CERTIFIED FINANCIAL PLANNER & Wealth Advisor.  He can be reached for questions at 732-280-7550,, & LPL Financial Member FINRA/SIPC.