Debt-related regret and well-being in people resolving problem debts

Regret is an often painful emotion experienced upon the realisation that a different decision would have led to a better outcome. As regret related to poor real world financial decision making has been neglected, here we examine whether people with debt problems regret the financial decisions that led to those problems, whether their explanations for their debt problems are associated with what they regret, and relations between regret, explanations for indebtedness, and well-being.

We measured the well-being of people resolving problem debts (N = 260) who also rated the extent to which each of a set of factors (e.g., spending beyond their means, bad financial decisions, health, employment etc.) contributed to their debt problems and described up to three regrets about the events leading up to their problems with debt.

Although participants most often regretted spending or financial decisions, fewer than half of their regrets concerned such decisions and even amongst those who attributed significance to their financial or spending decisions, a substantial minority did not express spending regrets. Poor well-being was common in the sample and was associated with regrets about uncontrollable events and perceptions that employment issues contributed to the debt problem. Regrets over time taken to seek debt advice were common, although delays in seeking advice predicted better well-being. Gender significantly affected debt size, time before seeking advice, explanations for the debt problem, and well-being.

These results suggest that (a) regret for myopic financial decisions may fade with time, even when those decisions have profound consequences, (b) people explain their debt problems in a variety of ways only some of which relate to their financial decision making, and (c) debtor well-being is associated with particular explanations and regrets. The results have implications both for delivery of debt advice and the design of interventions to encourage people to seek debt advice.