Survey: 68% Of Americans Say Financial Regrets From 2023 Caused Stress

The new year affords many of us the opportunity to start fresh with our finances. This time of year often prompts reflection on the previous year’s financial regrets, followed by ideas about changes that can be made to avoid missteps in the years to come.

Forbes Advisor’s survey uncovered Americans’ top financial regrets of 2023 and the factors that contributed most to these misgivings. The survey also revealed how Americans plan to recover from challenges and mistakes in 2024 and how optimistic they feel heading into the new year.

Most Americans Have Financial Regrets From 2023 That Have Caused Stress

Unfortunately, many Americans have financial regrets from 2023. According to our survey, the primary regret participants had over the past year was not saving any or enough money for retirement (20%). Other top regrets included not taking advantage of interest-bearing accounts, such as high-yield savings accounts and CDs (16%) and taking on too much credit card debt (15%). Less than 20% of respondents indicated that they had no financial regrets from 2023.

Financial regrets varied by generation in our survey. Perhaps unsurprisingly, 43% of Baby Boomers said not saving enough for retirement was their biggest financial regret in 2023. As this generation quickly approaches or enters retirement, this life milestone is likely top of mind.

Meanwhile, Gen X seems to have fewer regrets than other generations. While 29% of Gen X participants said they had no financial regrets, only 18% of overall respondents said the same.

According to survey participants, having financial regrets often creates additional stress. Roughly 68% of respondents said their financial regrets caused stress in 2023, with 45% saying they experienced somewhat more stress and 23% saying they experienced much more stress.

These results show that while financial regrets and the associated stress were widespread among our survey participants, contributing factors affected different generations to varying degrees.

Financial Challenges, Lifestyle Changes and Economic Factors Created Financial Obstacles

Various challenges, changes and factors impacted respondents in 2023. Key lifestyle changes that contributed negatively to participants’ finances included the birth or adoption of a child (40%), job losses or job changes (31%) and the loss of a loved one or head of household (30%).

Economic factors also played a role. About 28% of respondents said high interest rates negatively impacted their finances more than any other factor, while 26% and 23% pointed to the adverse effects of inflation and stock market volatility, respectively.

Again, stressors varied by generation. While 37% of Baby Boomers said the stock market hurt their finances most, 28% of Millennials and 47% of Gen Zers—both further from the average retirement age of around 66—struggled with high interest rates. Meanwhile, Gen X’s biggest hurdle was inflation, with 39% of respondents in this generation reporting higher costs as the chief economic factor negatively impacting their financial situations.

The economic challenges causing financial stress also differed by income bracket. For instance, 26% of overall respondents named inflation as the main economic condition negatively affecting their finances, but the following income ranges were more likely to choose this answer:

• Under $50,000 (50%)
• Between $50,000 and $100,000 (55%)
• More than $200,000 (29%)

In contrast, respondents with an annual household income between $100,000 and $200,000 said they were most negatively impacted by high interest rates.

Our survey indicates that while economic factors creating challenges for households may affect people of different income levels and generations disproportionately, many Americans wrestle with inflation, high-interest rates, and stock market volatility.

Americans Researched and Sought Advice Before Making Financial Decisions, With Positive Results

Most people didn’t make financial decisions blindly in 2023—in fact, around 89% of respondents said they always, often or sometimes conducted research before making financial decisions. However, the sources of financial advice and guidance varied considerably.

More than half (58%) of survey participants consulted family or friends before making financial decisions, with Gen Zers (84%) and those earning between $50,000 and $100,000 (66%) representing the greatest proportion of these responses. Interestingly, more people overall sought financial advice from social media influencers (50%) than financial advisors (43%).

Responses differed slightly by gender for this question, but male (65%) and female (50%) participants still tended to go to friends and family first for help with tough money choices. However, only 3% of male respondents stated that they did not seek financial advice in 2023, compared to 20% of female respondents and 11% overall.

Overall, respondents felt this advice paid off. More than three-quarters (78%) said the advice they received very positively (31%) or somewhat positively (47%) impacted their finances.

These responses suggest that seeking advice was beneficial overall, regardless of the source, and that talking about money may help prevent further financial regrets and stress.

Despite Challenges, Consumers Are Optimistic About Their Finances and Futures

Even with the regrets and stresses of 2023, survey respondents feel good about the future.

Around 74% of respondents said they were either very satisfied (31%) or somewhat satisfied (43%) with their overall financial situation when taking the survey, and many are planning changes to improve their finances in the new year. The priorities most Americans will focus on, according to our survey, will be contributing more to retirement (30%), saving more for their kids’ education (22%) and saving more for emergencies (17%).

With clear goals heading into the new year, nearly half (48%) of all respondents predict their financial situation will be better in 2024. While younger age groups say their finances will improve—with Gen Z leading in this sentiment (65%)—an overwhelming 67% of Baby Boomers predict neither positive nor negative change, and 68% of those over 78 expect their situation to worsen.

Broken down by income, responses generally reflect a higher level of optimism, with some nuance. The highest percentage of each bracket expects things to change for the better, but over 62% of those earning more than $200,000 predict positive change in 2024, compared to 39% of those earning between $100,000 and $150,000. Middle-income earners are also more wary about the future or anticipate little to no change, with many of those making between $100,000 and $150,00 expecting worse (27%) or similar (31%) financial situations in 2024.

These figures illustrate that those at different stages of their life not only have dissimilar priorities but may also experience varying degrees of uncertainty about their financial future. Both generationally and by income bracket, goals and outlooks surrounding money look different.

Tips To Bounce Back From Financial Regrets

Having financial regrets is normal, but that doesn’t mean you need to dwell on them. Instead, use the following tips to bounce back and set yourself up for financial success in the future.

• Reflect on the previous year. Didn’t hit your savings goals or have more debt than you planned? Recognizing what didn’t go well this year can help you avoid mistakes in the next. Get into a habit of identifying positive financial decisions and wins too. Celebrating successes can give you motivation and a clear idea of steps to take again.
• Set goals for the new year. After reflecting on the past, think ahead to the future. What would a financially successful year look like for you? Be as specific as you can as you set financial milestones, and be sure to focus on things that are in your control, such as your saving habits, rather than things out of your control, like the stock market.
• Use automatic savings tools. If you, like many Americans, wish you’d saved more in 2023, take action now to ensure you don’t fall short of your targets again. Set up automatic transfers into your savings, retirement and other investment accounts to make sure you save consistently. Use money saving apps to help you find money to put away.
• Open high-yield accounts while rates are high. If you haven’t been taking advantage of interest-bearing accounts, it’s not too late. The best high-yield savings accounts offer rates above 5.00% APY, and the best certificates of deposit (CDs) earn even more.

Managing Finances To Help Avoid Stress

While you can’t undo past financial decisions, you can manage your finances to help avoid stress in the future.

Save for Emergencies

If you don’t already have an emergency fund, start there. The purpose of this savings fund is to help you handle financial curveballs—such as medical bills, surprise car repairs or a sudden lack of income—so you can avoid taking out high-interest debt. The best place to keep your emergency fund is in an accessible high-yield account, where it’ll earn interest and be ready when you need it. Ideally, your emergency fund should hold three to six months’ worth of living expenses. You can use an emergency fund calculator to determine your savings target.

Budget

Avoid dipping into that emergency fund for non-emergency situations by setting a budget and sticking to it. Countless budgeting apps help you create a budget and link your bank accounts to easily track expenses and see how much money you have left to spend. When you get in the habit of budgeting, you begin to plan ahead and can cut down on stress.

Pay Off Debt

Finally, do what you can to alleviate pressure within your monthly budget. For many, that means paying down high-interest debt to free up cash for saving and investing. Use the debt avalanche method to pay off your highest-interest debts first before moving on to lower-interest balances.

Eliminating—or even lessening—financial stress doesn’t happen overnight, but it’s worth it nonetheless. These strategies can help you move in the right direction in 2024.

Methodology

This online survey of 2,000 general population Americans was commissioned by Forbes Advisor and conducted by market research company OnePoll, in accordance with the Market Research Society’s code of conduct. Data was collected from November 30 to December 1, 2023. The margin of error is +/- 2.2 points with 95% confidence. This survey was overseen by the OnePoll research team, which is a member of the MRS and has corporate membership with the American Association for Public Opinion Research (AAPOR).