How to harness the power of money regrets

Are you haunted by a money regret?
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If it is any consolation, it seems like a lot of us are. For his new book “The Power of Regret,” author Daniel Pink asked about the things we regret the most – in a poll of almost 4 500 Americans, and a World Regret Survey that drew more than 16 000 responses from 105 countries.

The topics of regret are all over the map, from bullying someone in school to not spending more time with family. But for 14% of Americans, the regret relates to money.

“Small money choices, made early, can accumulate over time into a really bad situation,” Pink says. “It sneaks up on people.”

Indeed, when we asked readers on social media about money regrets, we heard a wide range of responses, but a few key themes stood out.

Here’s a sample:

“I wish I bought even $1 worth of Bitcoin when I first heard about it.”

“I wish I understood the idea of compound interest, in relation to saving when I was younger.”

“Spending so much money on really expensive shoes.”

“Not putting aside a tiny amount each month.”

“Student loan debt.”

“Not maximising my 401(k).”

“Investing in GameStop, thinking it would explode.”

When personal finance site Bankrate crunched the numbers in a survey last year, three specific regrets topped the charts: “Too little emergency savings” at 20%; “Too little retirement savings” at 19%; and “Too much credit card debt” at 18%. Only 15% of people said “none.”

Types of money regrets

Financial regrets tend to fall into a couple of core areas, Pink says. One involves our “foundation,” of not creating a stable and secure enough life for ourselves. Not saving enough when you were younger would fall into this category, for example.

Another classic money regret is one of “boldness.” Here you might find regrets like not starting one’s own business, or not taking a risk on an investment that subsequently went through the roof.

Like all regrets, our money ones share a defining quality: They tend to stick with us and make us wonder about what might have been. That makes them dangerous, because often we have trouble moving past them.

“It’s not great to get stuck in that shame cycle,” says Bari Tessler, a financial therapist and author of “The Art of Money.” “I’m a big fan of having compassion for yourself, because we were doing the best we could with the skills we had at the time.”

Instead of ruminating about dumb money decisions – and we have all made them – look at them as learning opportunities. In that way a financial regret can be like a “knock at the door,” says Pink: If your brain wishes you had taken a different action in the past, at least you can use that knowledge to make better decisions in future.

So if you did not manage to save anything in your twenties, at least you can try to put away more right now. “It’s like the old proverb: The best time to plant a tree was 20 years ago, and the second-best time is today,” Pink says.

The same holds true for something like starting your own company. You may wish you had struck out on your own as an entrepreneur 20 years ago, for example. If so, what precisely is stopping you today?

The key is to look at that money regret, take it apart, and figure out why it is haunting you. You could do this in a journal, or by talking it through on a “money date” with your partner, Tessler suggests.

“You need to examine what your money mistake was, and think about how you could do things differently and better in future,” she says. “Because most likely, you will have another chance.”

Most importantly, do not subscribe to the “No Regrets” philosophy that is so pervasive in modern culture, Pink says. Instead, use those money regrets to spur you to positive change.

“In the middle of our lives is where regret can be especially potent,” Pink says. “At 20 years old, there is not much to look back on. At 90, there is not a whole lot to look forward to. But in the middle of your career, you can look both backward and forward – and draw lessons from those regrets.”


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