Survey Finds Even the Financially Savvy Make Money Mistakes
When it comes to personal finance, it’s fairly simple to make a mistake. Whether it’s as simple as overspending or more complicated such as errors in investing, you might expect that most Americans would be quick to cop to these missteps. What you might not anticipate, however, is that these types of money mess-ups are also common among the financially savvy — yet that’s exactly what a recent survey from KeyBank found.
Interestingly three-quarters of those surveyed by the bank considered themselves to be financially savvy. Furthermore 41% either stated they were an expert on the subject or at least more competent than most. Nevertheless the majority (54%) admit to making some common money missteps within the past 12 months.
Looking at the types of financial “faux pas,” budgeting mistakes were the most common among those surveyed. Specifically one in four respondents admitted to impulse shopping within the last year. Meanwhile savings errors were also common, as one-third said they failed to save for an emergency and 22% said they don’t currently contribute to retirement savings.
Another intriguing element of KeyBank’s findings involves generational differences. First it discovered that 20% of Millennials self-identified as money experts compared to just 10% of Boomers. At the same time one-third of those in the younger generation recently made financial errors while only one-fifth of Gen Xers and one-tenth of Baby Boomers said the same. As for where Millennials are going wrong, one in three respondents under 35 said they don’t stick to a budget and 25% say they don’t have an emergency fund in place.
Commenting on the survey and some of the mistakes featured, Chenna Cotla of KeyBank’s Financial Wellness strategy group said in a statement, “The truth is not all ‘faux pas’ are created equal. Some false steps with finances may be common, but that doesn’t mean they aren’t serious.” Cotla elaborated, saying, “In fact, one in three consider not saving enough/waiting too long to save for retirement to be the most severe of financial ‘faux pas.’ If not addressed promptly, such missteps can be a slippery slope.” However he clarified that some of these mistakes may not be the end of the world, explaining, “The path to financial wellness is rarely linear. Inevitably, there will be setbacks, which often present new opportunities to course correct. The important thing to remember is there are small steps you can take today—like checking your account balance—that will propel you forward to create a healthy, sustainable and resilient financial future.”
As Cotla notes, there is likely light at the end of the tunnel even for those who have made errors. In fact 89% of respondents said they expected to rebound from their missteps within the next five years. Ultimately what’s most important is that you learn from where you went wrong and set a different course the next time around.