What is your biggest money regret? Maybe you have more than one, most people do and what is regrettable for some isn’t for others. It really all depends on your own situation and past or current experiences.
For example buying a house might have been the right thing for one person and the worst decision for another so when I tell you about the list I have compiled, you can learn from the mistakes of others.
Not Saving Enough
I always tell people they should treat saving each month as if it was a bill they had to pay – they just have to do it. But of course what happens is people spend their money first and save what’s left and more often than not, there isn’t much left at the end of the month. So they save nothing.
And then a job loss happens, or someone falls ill or they suffer an accident that prevents them from working and earning an income. What happens then is they quickly fall into arrears on their mortgage, or credit union loan and their life becomes a misery.
People who this has happened to always say, if only they had put away some money when they could have, they would have at least had some breathing space that would allow them more time to get that job or recover from that illness.
So, if you don’t have any financial goals, putting money way into your rainy day fund - because it will rain at some stage - should be your number one priority. And it doesn’t matter how small you begin with, the key is to just start.
I guess most of us feel that guilt of overspending at one point or another. But what if this becomes more than a habit?
I was watching the very funny programme called “The Middle” at the weekend about a dysfunctional family living in the state of Indiana.
Anyway, money became very tight and the mother, Frankie, called a family meeting where she said to the family “We are going to try something new called living within our means” – they all looked puzzled as to what she meant.
Anyway, we all spend for different reasons but the key is to find out why your overspend. Is it because it makes you feel better? Uou spend without knowing how much until the visa statement arrives; maybe you are a social spender or an “it’s on sale” spender. They key to preventing yourself from overspending is to replace your reason for overspending with something else. And if you do maybe you won’t be that person who is massively in debt with nothing to show for it.
Not Having Enough Life Cover
I have come across two men, both in their 40s who died of heart attacks in the last 18 months.
Oddly they both collapsed in airport terminals en route to another country for business. They had a lot in common, they were busy men, successful men who earned an excellent income and had a young family.
Unfortunately the other thing they had in common was they had no life cover in place so when they died whilst their mortgage was paid off, that was it, there was no other lump sum left for their spouse and their young children.
Isn’t it bad enough that their children are now without their daddy but now their mum will have to go to work to get another job just to makes end meet, which is what both widows had to do. And as for college, well even as young as they are the chances of their mum being ever able to afford it is very slim.
Don’t neglect this and don’t put your job above your family’s future well-being. This is a priority payment that you need to have in place. Just ask those two widows who wished their husband had.
Not Saving Enough for Retirement
This is an area where I would say nearly 100% of people I meet regret not paying more attention to, when they had the chance. And that was when they were younger and didn’t have as much outgoings as they do now.
Trying to convince yourself you have the time to make up for the years you weren’t paying into a pension and you will catch up is delusional. You won’t. And please don’t think the state will look after you in your old age, they won’t. They will help but if you want to maintain control over your quality of life when you are older, then you have to start planning now no matter how far or near you are to retirement.
And here is a good exercise, if you are in any doubt about what I am saying, try living off €230 per week and see how you get on.
Buying a house
Given the mortgage arrears crisis, it is safe to assume that the biggest financial regret of the near 100,000 people who are in mortgage arrears and the additional 30,000 odd who bought “buy to let properties” that are also in arrears, is buying that house.
Hundreds of thousands of others who are in negative equity will have this at the top of their list as well.
To prevent what has become known as “homebuyer remorse” in those who are considering buying in the future only buy when the time is right for you, not when everyone else says it is.
Remember the race to get on the property ladder? And how stupid you were if you didn’t buy? If we can learn anything from what has happened in the last five or six years it is this, find out what your level of comfort is when deciding how much you should borrow, and save as hard as you can for long as needs be, so you can have as big a deposit as possible.
The moral of this regret in my opinion is to educate yourself and take responsibility and know what you are getting yourself into – a mortgage doesn’t translate into death contract in French for nothing.