Millennial man hides his face because he has is afraid of credit cards
Posted by: Howard Dvorkin, CPA
Date of post: January 22, 2018

A new poll reveals: With big mistakes come big lessons

Life is full of regrets. They’re unavoidable. What you do with them is what defines you.

What defines America’s financial regrets? Impulsiveness and neglect.

That’s my conclusion studying the data of a soon-to-be-released poll of more than 1,300 Americans.

Conducted by this month and released later this week, the comprehensive poll asked a range of questions. The most amusing…

In 2018, would you rather lose 10 pounds, pay off your credit cards/student loans, save $5,000, get your life organized, or learn a new hobby or skill?

I was pleased that 60 percent said they’d want to pay off their credit cards and student loans. Coming in second was saving $5,000. Perhaps I’m cynical, but I thought vanity would triumph over responsibility, and “lose 10 pounds” would come in first.

My optimism for America’s fiscal responsibility grew even stronger when I studied the responses to what should have been the most depressing question…

What’s your biggest financial regret from 2017?

The answers were predictable, but not at the levels I was expecting. Respondents checked all that applied, which is why the total is more than 100 percent:

  • Running up my credit card balances or maxing them out — 44 percent
  • Missing payments and damaging my credit score — 23 percent
  • Letting a debt go into collections — 19 percent
  • Draining all the money in my savings account — 17.5 percent
  • Making a big purchase on credit because it didn’t fit my budget — 13.5 percent
  • Using money out of my 401(k) or IRA — 7.5 percent
  • Going overboard on a vacation so it cost too much — 5 percent

Interestingly, in a nation where more than 60 percent of its adults have credit card debt, 23 percent said, “I don’t have any financial regrets.”

For those with financial regrets, I see two distinct attitudes: Buying things you don’t necessarily need because they’re fun, and not paying attention to the results of those purchases.

In my experience as a financial counselor over the past two decades, that most often explains why Americans both run up their credit cards and end up in collections. They simply don’t budget. (It’s so easy to do, too. Check out Build a Customized Budgeting Plan.)

The poll also asked about financial new year’s resolutions. An impressive 77 percent said they had made at least one, and many had more than one (which is why the results exceed 100 percent):

  • I want to buy a home — 12 percent
  • I want to save more money — 67 percent
  • I want to start investing — 16 percent
  • I want to spend less and budget more — 48 percent
  • I want to pay off student loans — 12 percent
  • I want to pay off credit card debt — 70 percent
  • I want to buy a car — 12 percent

The first and last resolutions worry me. Financial resolutions that involve spending money instead of saving money aren’t usually steps toward financial freedom. While homeownership is certainly an American dream, and it can save you money in the long run, such a major purchase also requires a level of financial literacy many Americans don’t have.

Still, I’m encouraged. Overall, these results show that Americans might finally be taking their personal debt seriously. While this survey is just one small snapshot in time, I take my good financial news wherever I can find it.