3 Most Important Financial Decisions You’ll Make in Life — Are You Making the Right Ones?

If you’re concerned about whether you’ll regret your decisions when it comes to your personal finances , you’re not alone. According to a Quicken survey , a whopping 80% of respondents admitted having regrets about their financial decisions.

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Here are the three most important financial decisions you’ll make in life, according to survey respondents, and helpful advice for them from financial experts .

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Save for Retirement and Live Within Your Means

The Quicken survey found that the majority of Americans believe that the most important financial decisions you can make are saving for retirement and living within your means.

Michael McSweeney, financial advisor with Certified Financial Services , agreed. However, he said that saving for retirement isn’t the only thing you need to focus on.

“If you drew a timeline of life for your parents and grandparents, you would see there are many life events that occur well before retirement that need to be saved for,” he explained. “Personally, for my parents, they purchased their first home, renovated it, sold it and purchased a new home, had three kids, helped those three kids through college, weddings, their kids’ first homes and now are helping with grandkids. Living within your means is crucial for a successful retirement and to also have savings to fall back on when other life events occur well before retirement.”

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Establish Credit and Maintain a High Credit Score

The vast majority of respondents — 70%– said it’s important to start building credit early in life, and 85% said maintaining a high credit score is crucial to financial well-being. Part of maintaining a high credit score is managing your credit well, and 81% of Americans said it’s important to pay off your credit cards rather than carry a balance.

“It is better to pay off a credit card each month,” said McSweeney. “Doing this builds a good habit. If you become accustomed to having a balance rollover each month on a credit card, then things can snowball in a bad direction …”

Uziel Gomez, CFP, AFP and founder of Primeros Financial , added, “A big part of your credit score, 30%, depends on your utilization ratio, which is just a fancy way of saying how much you owe compared to your credit limit. So, if you have a $1,000 limit and a $500 balance, your ratio is 50%. The higher your ratio, the more it can hurt your score. To keep your credit score healthy, make it a habit to pay off your balance completely each month.”

Buy a Home

According to the survey, 75% of Americans said owning a home is a great way to build your net worth. According to McSweeney, buying a home can be a way to build your net worth, but he stressed that a primary home should never be looked at as an investment.

“If you did decide to look at your home as an investment and look at the true cost of homeownership considering utility bills, property taxes, maintenance, insurance, principal and interest payments to your mortgage, you will see it is not a very efficient investment to build net worth,” he explained. “While some people get lucky, it does not apply to everyone.”

Gomez agreed that buying a home involves more than a mortgage payment. “It comes with a range of additional responsibilities that can be quite costly,” he said. “If your only goal in purchasing a home is to build wealth, there are often more straightforward and potentially less expensive ways to invest, such as putting your money into the stock or bond market.”

Additionally, 69% of respondents said that buying a fixer-upper is a smart financial move if you’re handy — and McSweeney agreed.

“Buying a fixer-upper and having to hire a contractor to do everything for you will not necessarily be the worst financial move,” he said. “But there are a lot of added costs for labor that will eat away at your finances. If you have the time and skill to work on your own home, it can save you a lot of money and is a great way to increase the value of your home.”

Put Down a Large Down Payment

It’s better to put down a large down payment than take a large mortgage, 68% of respondents said. Gomez, however, explained that whether you should put down a large payment varies based on individual circumstances and goals.

“A large down payment often results in a lower monthly mortgage, but also means more of your money is tied up in the home,” he said. “I’ve seen clients with most of their wealth in the equity of their home, who later needed funds for things like a child’s college education. They had to consider options like refinancing their mortgage or taking out a Home Equity Line of Credit, both at higher interest rates. They didn’t fully evaluate their other financial goals and trade-offs when making the large down payment.”

Pay Off Your Mortgage ASAP

Paying off your mortgage as quickly as possible to get out of debt is important, said 64% of Americans. But McSweeney pointed out that financial decisions mustn’t be made in a vacuum.

“These decisions need to be made with understanding of the ripple effects they create in other areas of your personal economy,” he said. “Paying down debt faster will most certainly save you money in interest on your mortgage, but at what cost? To do this you must take more of your cash flow and put it towards the mortgage. If these dollars were instead invested and earning a reasonable rate of return over the same 20-30-year period, the compounding interest would far surpass any interest you could have saved by paying the mortgage off earlier.”

Refinance Whenever Rates Decline

According to the Quicken survey, 60% of Americans said refinancing whenever rates decline is a good idea to save money. Gomez agreed but said you should first evaluate the refinancing costs and calculate the break-even point, which means the length of time it will take to recoup those costs through monthly savings.

“Additionally, they should consider how long they plan to stay in the home, as the benefits of refinancing are tied to the duration of ownership,” he added.

McSweeney said that you shouldn’t jump to refinance the second rates drop. “You should assess the economy and see where you think rates are trending,” he explained. “If rates will continue to decline over a period of a year or more, you won’t want to refinance each time they drop, but do it once, and make it as meaningful as you can.”

McSweeney also said the rule of thumb is that if you refinance, you should be able to save 1% or more on your rate.

This article originally appeared on GOBankingRates.com : 3 Most Important Financial Decisions You’ll Make in Life — Are You Making the Right Ones?