Financial Regrets: Living with the Deal That Got Away
W hile cleaning my desk last week, I found an Amex Platinum special offer for six months of free Kindle Unlimited access which I had specifically saved up to activate prior to the deal’s expiration on March 15. At the time that I had received the deal, the holidays were in full swing and I knew that I would have little leisure reading time in Q1, so I filed the coupon away in a corner of my desk for delayed activation. Of course, I found the coupon on March 18 which unleashed much consternation in me. Cue Frank Sinatra’s “My Way” and a meditation on financial regrets.
Financial Regrets I’ve Had A FewO f course missing out on the Kindle Unlimited deal has no meaningful impact on my finances, but the feeling of loss and annoyance at having wasted a perk is something all of us experience. No one is immune to financial regrets, and research on the topic shows that realistically, it is inadequate savings, buying things you didn’t want or need, and taking on too much debt that top the list of regrets for many. The reassuring thing is that it’s impossible to be perfect in this realm. Except for multi-millionaires and those who have inherited wealth, everyone will have financial constraints that can turn mistakes into regrets. If you have financial regrets, the first step on the road to recovery is accepting that everyone has them.
Right Sizing Financial RegretsS ometimes you’ll do something silly with the best intent. A few years ago for example, I tried to game the subway system by putting one more month of unlimited rides onto my card before monthly fares went up without realizing that the MTA was smarter than me and had specifically put in expiration brakes against this kind of stockpiling. I was pissed that I had essentially paid the MTA twice for one week of fares, but since then, I’ve learned not to freak out when the MTA announces the fare increases (such as happened last week) because it’s rare for timing to work out in my favor so there’s no point trying to take action ahead of a fare hike.
I n this sort of lower stakes instance which will probably be the more common scenario you face, the best thing to do is to learn the lesson at heart and not repeat the mistake again in the future. With this MTA example, the nice upside is that it made me realize the real problem I was trying to solve was how to ensure that I was getting the most value out of my monthly subway pass. Researching this question lead me to stumble across the MetroCard calculator which helps you determine if unlimited passes are for you and how much money you should put on your card if you’re going by dollar value and want to avoid giving extra money to the MTA.
G iven our mental bandwidth, we can’t protect ourselves by keeping a clean financial sheet. We’re going to get suckered at some point because of circumstances outside our control, but we can minimize the extent of damage we cause. Larger financial regrets like not having enough savings though require an actual plan of attack. For me, the trigger points are how many recurring and/or automated purchases I have scheduled and how much I’m spending on any single transaction.
I won’t waste emotional energy beating myself on $10-$20 losses as long as those are manageable to begin with and will stop at a quick analysis of what problem I wanted to solve. But starting at the $50 and above mark, I definitely take time to do a post-mortem on the triggers that caused me to enter into the financial transaction, why I had thought it was a good idea, and what I was actually trying to accomplish. Be kind to yourself, but don’t give yourself a hall pass for financial habits that lead to long-term financial regrets. The goal is always to try to limit spending only to that which is productive or essential, never destructive.
Letting Go of Financial RegretsS ince it’s impossible to be perfect, it’s a no-brainer that you have to make peace with yourself in the aftermath of financial regrets. A mistake doesn’t have to be repeated or spell long-term doom, so there’s no point being on a yo-yo cycle of spending and regret. Here are some ways to overcome the disappointment of a loss or mistake.
- Commit to undertaking your financial action differently next time. Whether it be never again buying clothes where there is too much fabric pooling under your armpits or only agreeing to be a bridesmaid in very specific weddings.
- Acknowledge the good that comes from financial regrets. Mistakes give you an opportunity to strive for something better, and you’ll have the satisfaction of knowing that you have grown from the experience.
- Pat yourself on the back for strengthening your survival skills. Financial regret is useful because as with other feelings, it has a survival-related purpose.
- Ask yourself if your action will matter in 10 or 20 years. If it will, make sure you are clear about all the potential lessons you were supposed to learn from it and then move on.
T he point of mindful spending is that it is the easiest way to prevent financial regrets from becoming permanent fixtures in our lives. This post hasn’t treated the big-ticket issues of bankruptcy or losing a home, and those are the sorts of real financial regrets that everyone should be trying to prevent on a daily basis. The reason to be responsible and respectful of the limits of your money is to avoid irreversible fiscal changes that will take years to recover from. It is never about denying yourself everything – early retirement extreme isn’t the answer – but it is about maximizing your joy over the long run instead of restricting yourself to one peak that could end in a trough.