The initial Millennial Regret Spending Report from the Common Cents Lab identifies four positive personal financial habits millennials should engage in. The research was conducted with fintech app Qapital and asked millennials which purchases they found most regretful and most satisfying.
“While it’s common to regret the last thing we ate, it may be equally common to regret the last thing we bought,” said Dan Ariely, professor and behavioral economist. “The feeling of regret, while not pleasant, may serve as a teaching moment to help us understand what we enjoy and what we don’t enjoy. By systematically understanding the things people regret, we can design systems that encourage us to spend our money on things that make us happier.”
Most millennials experienced less regret over recurring expenses. That may be because many are automatically paid. That suggests placing necessary payments on autopay while shelling out cash for riskier buys.
Their most satisfying purchases are necessities and those that better themselves or others.
It also depends on when people actually buy things. If the spend is near Thanksgiving or in the first half of December they produce double the satisfaction (close to 90 per cent) than if it was made in October or February (below 50 per cent). If you buy on Wednesday you are likely to be close to five per cent happier than if you buy on Saturday.
“The lesson is that guilty pleasures often come with a heaping of regret, and that the greatest fulfillment can be gained from purchases that enrich your own life or are made for others,” Common Cents said in a release.
Millennials often regret smaller purchases more than larger ones. On average, respondents reported more satisfaction with those purchases taking up a larger percentage of their monthly income.
“Individually, these lessons seem intuitive, but taken together as a lifestyle, they can provide a blueprint for living a much more satisfying financial life,” said Kristen Berman, co-founder of Common Cents. “Interestingly, these are lessons that can be applied regardless of income level as a guide to improved financial decision making.”
The Common Cents Lab, supported by MetLife Foundation, is a financial research lab at the Center for Advanced Hindsight at Duke