My Biggest Spending Mistake: AmOne Survey Results

biggest spending mistake, most common spending mistakes

Life sometimes comes with regrets. And often, it’s buyer’s remorse that sticks out: the shame, frustration or distress felt after purchasing something you wish you hadn’t. Recently, AmOne asked consumers, “What’s your biggest spending mistake?”

New research suggests that many people rue the day they forked over major funds for big and small items alike. Learning which kinds of purchases lead more often to regret and what to consider carefully before investing in certain items can help prevent financial guilt.

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The biggest spending mistake

A recent survey of consumers conducted by AmOne revealed that many people have regrets about major purchases. Among the findings:

  • Most (43%) say their biggest spending mistake set them back $5,000 or less.
  • Others say their biggest spending mistake cost them between:
    • $5,001 to $15,000 (22%)
    • $15,001 to $20,000 (7%)
    • With the second-largest group reporting a setback of $20,001 or more (28%)

      biggest spending mistake

  • The items consumers regard as their biggest spending mistake were:
    • Toys like RVs, ATVs, and boats (22%)
    • Car (19%)
    • Fitness equipment (18%)
    • Education (12%)
    • Real estate (12%)

Men were more likely than women to regret expenditures on cars; of those remorseful about a car purchase, 58% were male. Similarly, 56% of those unhappy with a toy, such as an RV, ATV or boat, were men.

Women were more likely to resent a fitness equipment purchase; 52% of those who regretted such spending were female.

A July 2019 CNBC study found that while both genders are equally likely to make buying mistakes, men are more likely than women to make expensive impulse purchases.

Expensive buys require more thought

While most consumers’ mistakes cost them relatively little, certain categories of mistakes were potentially devastating. Real estate and education proved the most oft-regretted expensive errors.  Toys (RVs, boats, etc.) and cars were not far behind.

Because big-ticket items do much more damage  than smaller buys, consumers should not make such purchases lightly. There is no reason to purchase a car, real estate or education without extensive analysis:

  • Can you afford it?
  • What are you trying to accomplish with this purchase?
  • Is there a cheaper way to accomplish the same thing?
  • Is that purchase the best use of your money right now?
  • What are the chances of buyer’s remorse?

CNBC survey respondents indicated that the majority of them do consider the cost when it comes to education. While most believe that college education is a worthwhile investment, 58% believe this is true only if they don’t have to borrow too much to earn their degrees. Only 20% believe college pays off even if they have to borrow heavily.

Nobody’s perfect

AmOne survey respondents are certainly not alone. At some point in their lives, nearly everyone has bought something extravagant, unreliable, wasteful or unrewarding that they wish they could walk back.

“My biggest regret was purchasing a new Chevrolet Camaro three years ago,” says Mike Gnitecki from Longview, Texas. “The depreciation was steep. And I could have used the money for other things.”

If he could have done it over again, “I would have bought a less expensive or used vehicle.”

Laura Walker from Greer, South Carolina, can feel Gnitecki’s pain. She impulsively paid for a pricey Louis Vuitton handbag that she now regrets.

“I didn’t need the bag, nor did I have much use for it. It’s not a practical bag at all,” she says. “When you buy luxury items, you almost tend to baby them and not use them. Then, it becomes a waste of money.”

Why we’re prone to purchasing mistakes

Manny Vetti, managing partner and director of marketing with Backtaxeshelp.com, says there’s a big reason why consumers succumb to costly buys they later anguish over.

“It has to do with the perceived value or happiness the consumer will feel from these purchases versus the reality of the value or happiness they receive down the road. At the time of purchase, it seems like it will make life better. But many times, it is short-lived,” says Vetti.

Many of the aforementioned items are also things that are impossible to return.

“How can you return education that hasn’t paid off? Often, there is little that can be done to recoup those funds,” Vetti notes.

Ryan Marshall, certified financial planner and partner at Ela Financial Group in Wyckoff, New Jersey, says many of us are prone to impulse purchases.

“Generally, most people regret making a decision on a purchase when that item depreciates almost immediately,” says Marshall. “Think about the results of the AmOne poll — the biggest spending mistakes were made on products that lose 10% to 20% almost immediately when you make the purchase, like an automobile or fitness equipment.”

Marshall adds that “spending money on something that could equal a larger benefit down the road results in the least amount of remorse.” This can include investing in yourself through education or real estate. Both tend to have a positive economic impact over time.

What you can do to avoid consumer regret

Vetti lives by a simple credo: Only spend money on the things you love.

“Do you really love boating? Or is the idea of owning a boat something that you love? Do you love it so much that it will be part of your life, and will it add value? If you can’t answer with a definitive ‘yes,’ then it’s a good idea to put that purchase back on the drawing board to think about it more and hold off,” says Vetti.

Walker’s advice?

“Don’t get sucked into the world of ‘keeping up with the Kardashians.’ It’s not wrong to buy luxury items,” she adds. “People just need to be more cautious thinking about how they may use that item and if it really fits their lifestyle.”

Gnitecki agrees.

“Objects can become expensive nuisances after a while,” he says. If he could do it all over again, Gnitecki would “spend money on quality experiences that provide good memories” instead of a costly car.

Marshall’s plan for sidestepping buyer’s remorse requires patience.

“I always tell people to hold off on a major purchase for at least six months. If you still want to purchase after that time, go for it,” says Marshall.

Also, “try to buy something used before making the expensive commitment for a brand-new shiny product that may depreciate quickly,” Marshall adds.

Lastly, withhold the urge to buy on the spur of the moment.

“Don’t get caught by the tricky sales guy that says this opportunity isn’t going to last long; that’s a lie. Give yourself time — sometimes days, weeks, or even years — to make up your mind on major purchases,” recommends Vetti.

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