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Financial regrets: What money lessons would you share?

Pay Day
STRATFORD, CT - DECEMBER 19: A mother and daugher walk away after watching people gather for the funeral of slain teacher Victoria Soto, 27, at the Lordship Community Church on December 19, 2012 in Stratford, Connecticut. The first grade teacher reportedly died while trying to protect her students during last Friday's shooting massacre at Sandy Hook Elementary School in Newtown. (Photo by John Moore/Getty Images)

Self-help books might preach about living life without regrets, but most Canadians have some when it comes to finances. And it appears that to avoid future lament, we should heed the advice of our elders: younger people have more money misgivings than seniors.

When asked in an Edward Jones poll if they could go back in time and change any financial decisions they’ve made, 82 per cent of those under age 44 said they would do things over compared to 61 per cent of those aged 65 and up.

Nearly 80 per cent of Canadians over 65 said they’re satisfied with the money moves they’ve made in life, compared to 65 per cent of those 44 and under.

If Canadians could go back in time and start their careers again, they’d do a few things differently, according to the survey:

  • Save more for long-term goals: 56 per cent across all age groups vs. 47 per cent of seniors.
  • Pay off debt faster: 30 per cent vs. 26 per cent of seniors.
  • Build an emergency fund: 30 per cent vs. 22 per cent of seniors.

“Time goes by so quickly and the next thing you know, you’re 30 years old, dragging bad budgeting habits and some 10-year old debt along with you,” says certified financial planner Lise Andreana, a partner at Burlington’s Continuum II Inc. “Who wouldn't like a clean start?”

Andreana sees a lot of generational differences when it comes to money management.

“The only groups which are significantly fiscally prudent are the very elderly, who were born around the time of the Great Depression, and new immigrants to Canada who fled poverty to get here,” says Andreana, author of No More Mac 'n Cheese!: The Real-World Guide to Managing Your Money for 20-Somethings.

“It appears the true teacher of fiscal prudence is adversity. In my experience, these two groups demonstrate a willingness to work hard, save something for a rainy day, and defer gratification. When a habit of saving is established early in life, it seems to stick with you throughout a lifetime.”

Boomers, meanwhile, tend to exhibit a “mix of fiscal prudence and wild extravagance”. “This group grew up at a time when jobs were plentiful and it was relatively easy to move up the career path,” Andreana says. “For many in this group, they’re fortunate enough to have participated in a defined benefit pension plan, making their retirement if not luxurious at least secure.” However, she estimates only about 30 percent are ready for retirement.

In the Gen X group, she sees some who are extremely prudent and others who are extremely foolish. The former will be ready for retirement without regrets, while the latter live beyond their means.

And many Gen Y members are graduating with student debt and entering the job market later in life than their older generations. They’re also less likely than their elders to accept work in an environment where they don’t feel fulfilled.

“This generation of young adults is less prepared to make sacrifices and save a portion of today’s income for a better life tomorrow,” Andreana notes. “Financial life planning for those born after 1985 will be dramatically different than it has been for earlier generations.”

Certified financial planner Bettina Schnarr, investment advisor at South Surrey, B.C.’s HollisWealth, says there are some key steps to take to avoid financial regret. They include having a financial plan, paying off debts, saving for big purchases, keeping track of where your money goes and paying yourself first.

“Have money debited from your account and placed directly into savings on a monthly basis,” Schnarr says. “The most common complaint I hear from people in their 40s and up is ‘I wish I had started saving my money earlier.’”

Patrick French, director of financial and retirement planning with Edward Jones, says goal-setting is crucial early in life to avoid looking back with woe. “Ask ‘Where am I today, where would I like to be, and what am I trying to accomplish?” French says.

“That’s critical. More money is not an objective. Put those goals together with planning: How can I get there? What do I need to do? When do I need to do it? And review the plan regularly to stay on track.”