Here's What Americans Regret Not Doing With Their Finances

As we're getting ready to close out 2024, many Americans find themselves reflecting on their financial decisions over the past year.

According to a recent NerdWallet survey conducted by The Harris Poll in October 2024, a staggering 69% of Americans harbor financial regrets for the year.

Explore the key findings of the survey, the most common financial regrets among different generations, and practical advice on how to address these concerns and improve your finances in the coming year.

Generational Divide in Financial Regrets

The survey reveals a significant generational gap when it comes to financial remorse.

Gen Z, the youngest adult generation aged 18-27, leads the pack with an overwhelming 89% expressing financial regrets for 2024. This high percentage suggests that younger adults may be facing unique challenges or may just be more aware of their financial mistakes.

Following closely behind are millennials, ages 28-43, with 80% reporting financial regrets.

Gen X, ages 44-59, shows a slightly lower but still significant rate of 73%.

Interestingly, baby boomers, ages 60-78, report the lowest rate of financial regrets, with only 46% dissatisfied with their money moves in 2024.

This generational difference in financial regrets could be due to:

1. Different financial responsibilities

2. Economic conditions affecting different age groups

3. Financial literacy and experience

4. Different financial priorities and goals

Top Financial Regrets of 2024

The survey identified several key areas where Americans felt they fell short in their financial management during 2024.

No Emergency Savings

Nearly 3 in 10 Americans (29%) regret not saving enough for emergencies in 2024. Whether this is because they are not actually able to save or spend too much money, likely depends on the person and situation.

However, it's not surprising considering the inflation to income rate in many areas.

Solution:

To start savings, you could set up automatic transfers to a savings account. Instead of waiting to see what's left at the end of the month, prioritize your savings by automating the process. This approach helps overcome the temptation to spend first and save later.

Action steps:

1. Determine a realistic amount to save each month

2. Set up automatic transfers from your checking account to a savings account

3. Set up direct deposit options with your employer to allocate a portion of your paycheck directly to savings

Not Enough Savings for Financial Goals

Similar to emergency savings, 27% of Americans regret not saving enough for their long-term financial goals, such as retirement or a home down payment.

Solution:

To tackle this problem, you need to set clear, measurable financial goals and develop a strategy to achieve them.

Action steps:

1. Identify your key financial goals (e.g., retirement, home ownership, education)

2. Calculate how much you need to save for each goal

3. Break down the total amount into monthly or weekly savings targets

4. Set up separate savings accounts for each goal

5. Automate money to these goal-specific accounts

Overspending on Entertainment

A quarter of Americans regret overspending on entertainment, including dining out and recreational activities.

It's more prevalent among younger generations, with 35% of Gen Z and 32% of millennials expressing remorse over their entertainment spending, compared to 25% of Gen X and 14% of baby boomers.

Solution:

Rather than focusing solely on dollar amounts, try limiting how often you go out to eat, to the movies, or other expensive activities.

Action steps:

1. Determine a reasonable number of outings per week or month

2. Plan your outings in advance

3. Prioritize which outings are most important to you

4. Track your spending during this period to assess the effectiveness

Neglecting Your Credit Score

More than 1 in 5 Americans (21%) regret not taking steps to improve their credit score in 2024. A good credit score is crucial for accessing good loan terms and financial products, making this a significant concern for many. Especially people who are trying to buy a house, a car, or other big purchases.

Solution:

Concentrate on the two most important factors affecting your credit score: on-time payments and credit utilization.

Action steps:

1. Set up automatic payments or reminders to ensure all bills are paid on time

2. Monitor your credit utilization ratio, aiming to keep it below 30% overall and for each credit account

3. Prioritize paying down high-balance credit cards to improve individual account utilization

4. Regularly review your credit reports for errors and dispute any inaccuracies

Strategies for Avoiding Financial Regrets in the Future

While addressing specific regrets is important, developing overall financial habits and strategies can help prevent more regret in the future.

Create a Budget

Develop a detailed budget that accounts for all income and expenses. This will help you identify areas where you may be overspending and opportunities to increase savings.

Increase Financial Literacy

Take advantage of free online resources, workshops, or courses to improve your understanding of personal finance. The more knowledgeable you are, the better equipped you'll be to make sound financial decisions.

Regularly Review and Adjust Financial Plans

Set aside time each month or quarter to review your financial progress and adjust your strategies as needed. This helps ensure you stay on track with your goals and can adapt to changing circumstances.

Seek Professional Advice

Consider consulting with a financial advisor to get personalized guidance on managing your money and planning for the future. They can help you develop strategies tailored to your specific situation and goals.

Be Mindful When Spending

Before making purchases, especially large ones, take time to consider whether they align with your financial goals and values. This can help reduce impulsive spending and increase overall satisfaction with your financial decisions.

Build an Emergency Fund

Prioritize building an emergency fund that can cover 3-6 months of expenses. This financial buffer can provide peace of mind and help you avoid taking on debt in case of unexpected events.

Invest in Your Future

If you haven't already, start investing for long-term goals like retirement. Take advantage of employer-sponsored retirement plans, such as 401(k)s, and consider opening an IRA for additional tax-advantaged savings.