Although we are financially secure and tend to make wise decisions regarding our finances, we still screw up sometimes and do things that we later regret. We’re human. However, while we may have regrets I choose to look at them as learning opportunities. Whatever we regret from this past year is something that can be fixed in coming years, moving us closer to our goals. As 2008 draws to a close, I’m taking a look back at some of my financial regrets and thinking about what I want to do differently in 2009.
Regret #1: Not getting my 401K out of the market before the market crashed: I knew the bust was coming. I spend my days writing about finance and watching CNBC. I knew it was coming but I chose to stand pat, fearful that if I got out the market would continue to grow and I’d miss out on the earning opportunity. I should have moved everything to cash investments once I began to get uneasy about the market. Even if it continued to go up I still would have gotten out very close to the peak. Instead I waited and when the crashing started I kept trying to find the right time to get out. Of course, I lost so much so fast that after a point it became pointless to move. Now I just have to wait it out.
What I’ll Do Differently: It’s too late to do anything about this bust cycle. If I got out now I’d be losing way too much money. But in the future I will listen to that gut instinct that says, “get out.” I’m guilty of this in a lot of areas, not just finance. I tend to tell that little voice to shut up when I should be listening to it. I’m fortunate that I’m years away from retirement and have time to rebuild, but as I get older and have less time, listening to that little voice will become even more important.
Regret #2: Not letting my husband buy me the ring he wanted to give me: For our anniversary my husband wanted to buy me a very nice ring, but I said no. I said that we didn’t need to spend that kind of money on something so frivolous and that we should wait (and wait, and wait). Never mind that we have plenty of savings, no debt, good paying jobs, and could easily afford the ring, I still said no. I let my frugal side go too far. Not only did I hurt his feelings by rejecting the gift, I cheated myself out of something that I would have cherished forever. It hurts now to even think about it.
What I’ll Do Differently: When either of us wants to treat the other to something a bit extravagant but meaningful like anniversary presents, I will not say no as long as the money is there to purchase them without damaging any of our other goals. I need to remember that life isn’t all about money and net worth statements. There are times when it’s appropriate to splurge, even for otherwise frugal people. Otherwise, where’s the fun in life? Why bother to save up the money if you don’t use it sometimes? I will enjoy giving and receiving gifts and not flog myself to death about the expense.
Regret #3: Not laddering some CD’s: Like I said, I saw the bust coming. I kept meaning to take some chunks of our savings and put them into more CD’s back when interest rates were still high. I was going to create a nice ladder where they all had different maturity dates. But life got in the way and I kept putting it off. Then came the rate cuts and still I put it off. I kept forgetting to do it or, when I’d think about it I wouldn’t be in a place where I could take care of it right then. Well, now we’re earning crappy interest rates and I could have been earning so much more.
What I’ll Do Differently: When interest rates start to go up again, I will not put this off. I will start with some short term CD’s to take advantage of the higher rates and, as they climb, I will keep up with the CD’s and make certain to reinvest as they mature. I will make notes and staple them to my forehead if that’s what it takes, but I will not forget again.
Regret #4: Not paying extra on my mortgage: This is another one of those “life got in the way” things. I kept meaning to go to the bank (our bank won’t allow you to do this online) and set up a new automatic payment with them so that we would be paying more than required on our mortgage every month. But I never made it. Even when I had to go into the bank for something else I was always in a hurry and couldn’t stop to take care of it. As a result, we’ve lost this year that we could have been making extra payments. I haven’t done the math (I don’t want to be more depressed), but I’m sure the amount we could have saved is substantial.
What I’ll Do Differently: I’ve already gone to the bank and taken care of this one. They now have permission to draft an extra $100 per month to go straight to principal. We’ll try that number for a year and increase it next year if we can.
Regret #5: Not keeping better records for my business: This one is odd and I don’t know why I wasn’t better about it. Normally I’m a very organized person, but for some reason when it came to my business expenses and income, I was about as badly organized as I could possibly be this year. It was a good year, so my excuse is that I was so busy working that I didn’t have time to deal with the details. (But that’s grasping at a thin excuse and I know better.) Stuff is everywhere, I can’t find what I’ll need to do my taxes, and I lost a bunch of receipts that I need. I’ll be trying to find and reconstruct things from now until tax day, I think.
What I’ll Do Differently: I’ve already got a new accordion file and set it up to file away the things I need to keep in 2009. I’ve also set up Quick Books to better track my expenses and income. I will be more conscientious about keeping up with stuff and handling my business finances better.
Regret #6: Stay away from Amazon’s Gold Box deals: I don’t tend to spend recklessly, but last Christmas I got in the habit of checking the Gold Box every day to try and score some deals on presents. Unfortunately, that habit carried over into 2008 and I kept finding things that were such great deals I had to have them. None of it was stuff that I won’t use, so that’s the only blessing here. It was stuff that I enjoy or can put to good use. But most of it wasn’t “necessary.” When I think about how much I wouldn’t have spent if I hadn’t checked that box every day, I get a little ill.
What I’ll Do Differently: I’m breaking the habit of checking the box. I’ve removed Amazon from my bookmarks so I’m not reminded every day. I also turned off one-click ordering so that I have to take more time to make the purchase. (If I have to take more time, my frugal side is likely to catch up with the gimmie monster and beat it into submission.) If I catch myself going to Amazon when I don’t have a clear need for something, I try to be conscious of it and close down the window. It’s a hard habit to break, but I’m working on it.
Regret #7: Not installing that hot water heater switch long ago: For a couple of years now we’ve been talking about installing a switch inside the house so we can turn the water heater on and off. There is so much of the time that we don’t use hot water, we could just turn it on in the mornings and at night. During the day it could be off and not heating water that no one is using. We got the idea from our RV. In order to save propane in the the RV, we turn the water heater on only when we need it. Well, we put it off and only got around to installing it two months ago. Our first power bill was down $50, and the next $60. The water heater is a huge power drain. When I think about how much we could have saved if we had done this two years ago, or even a year ago, I get a little queasy.
What I’ll Do Differently: The next time a money saving improvement or repair comes to mind and I’m certain there will be a good payoff (and I can afford it), I will get off my butt and deal with it. If I can do it myself, I will move quickly to get the parts and do it. If I can’t, I won’t put off calling a contractor. Every day that things like this get put off is more money going down the drain.
Regret #8: Not spending more time on my dreams: There are several things that I dream of doing that will, probably, provide more income for us. However, I’m a scaredy-cat when it comes to stepping out of the familiar and into unknown territory. I tend not to trust my instincts (see number 1, above) and I talk myself out of going for things. I hate failure so I try to avoid it. Unfortunately, that means sometimes missing out on things or not trying things that could have a big financial (or emotional) payoff. This was yet another year where I let a lot of time slip by without making forward progress on my dreams.
What I’ll Do Differently: This one is the hardest for me and it’s something I doubt I’ll conquer in a year. But I am working on not discounting my ideas and not putting off doing the steps that could lead me to my dreams. I’m also doing a lot of motivational reading, journaling, and trying to find ways around the blocks I put up for myself. Mostly I’m spending a lot of time reminding myself that I’m not getting any younger and that if anyone is going to make my dreams come true it’s going to have to be me. I’m making a conscious effort to do one thing that moves me closer to my dreams everyday, even if it seems small and insignificant.
I’m sure you have your own financial regrets, as well. The good news: Regret can be a powerful motivator for change because it’s a depressing emotion that we would all like to avoid. As the calendar turns to another year, take a minute to think about what you regret from this past year and then come up with a plan to fix it. You’ll be on your way to a financially happier 2009. Happy New Year!