Regret, it’s an awful feeling to have in your life. As I was reading this Business Insider article it got me thinking of how much financial regret a majority of people will inevitably have in their life. The article mentions five financial experts and the money regrets they look back on in their life:
- Not doing research to make an educated decision
- Not listening to your gut if it doesn’t feel right
- Start investing sooner
- Living beyond your means & getting in debt
- Ignoring a collection item
These are all very legitimate regrets. A lot of people are currently suffering from or currently leading life that will lead to these regrets. My goal isn’t to depress you here, it’s to motivate you and understand how simple financial decisions can greatly affect your life.
Let’s take a look at these five and how you can take the necessary steps to make sure you never feel this type of financial regret in your future.
Not Doing Your Research
The article references a CPA who didn’t do his research when they bought their first house. This is a perfect example. Buying a home is without a doubt the biggest purchase you’ll likely ever make. That being said, the housing market is fickle and moves quick so you have to be adaptable. Before you even begin looking online do your RESEARCH to find out the following:
- Use a mortgage calculator to find out what you can afford & the monthly payment amount.
- Will the down payment use all of your savings? Does the house need repairs?
- Is your credit score high enough to secure a low APR loan?
- How does it compare to other houses in the neighborhood?
There are 100 other questions to ask before buying a house but these are crucial. The same rules apply to buying a car. Make sure to do your research, these high ticket items will be around in your life for a long time. Ask yourself these three questions for any major purchase:
- Do you really want it
- Can you really afford it?
- Will you feel good about the purchase a few years from now?
Not Listening To Your Gut
Starting Investing Sooner
I’ve always been a saver, but didn’t begin investing until I was 24. As the article mentions Jeff Rose, fellow blogger of Good Financial Cents, “if only I had started a Roth IRA at 18”…..I couldn’t agree more! But let’s get real from 18-22 the last thing on your mind is learning about low cost index funds and tax sheltered accounts (I feel old just typing that)….it’s more about how you can pass all your classes, not miss a party, have an internship & maybe learn a little in between the fun.Unfortunately after college people then get busy building a career, enroll for additional education, start a family, and keep up the investing excuses… “I don’t understand investing, I don’t have the money right now, or I’m not going to retire for like 40 years” excuses. While one or all of those may be true it’s important to take the time to learn about personal finance or investing earlier, rather than later. Not only will investing earlier compound your gains (full blog here) but it will create a habit for your brain to always invest a portion of your income and set up your older self for success.
Living Beyond Your Means & Getting in Debt
How often do you see this? People earning the same or less salary than you but living the life on social media? Anyone can do it, but typically you’re just racking up high interest credit card debt.
Just STOP! Do you need to buy bottle service every weekend? Buy a car with a $700/month payment? There are hundreds of other examples out there. I’m not opposed to enjoying life, traveling, and buying nice things. I am only opposed to doing it when you’re current financial situation doesn’t yield it.
Stop trying to keep up with the Joneses…they’re broke!
Related Read: How To Save & Spend Guilt Free
Ignoring a Collection Item
Finally the last example is ignoring a bill that eventually ends up in collection. If you get a bill, pay it off, no matter how small. Get your receipt and store it for your records. Even one bill, no matter what amount, can have a serious impact. It can hurt your ability to get a loan by hurting your credit. Bottom line — pay the bills!
Hopefully everyone can avoid these future regrets by sticking to a few simple, easy financial rules.
- Always do your research for big purchases.
- Listen to your gut, it’s rarely wrong.
- Start investing for your retirement now.
- Don’t spend money to impress people.
- Always pay your bills on time.