With Tax Day looming we’ve been focused on how to be smarter about money (beyond the obvious idea to stop spending so much of it!). And then we read CBS News Business Analyst Jill Schlesinger’s new book, The Dumb Things Smart People Do with Their Money: Thirteen Ways to Right Your Wrongs and knew she could help us. We’re smart, but we could all stand to be smarter about money, right? Read on for Jill’s genius and do-able, financial tips.
When it comes to money, we all suffer through our share of “Oh, shit” moments — those life-altering instants in which we realize we’ve screwed up royally. The reason? We’re all emotional animals, not just rational ones. In my new book, I explore a series of surprising, even counterintuitive, errors that smart people make with their money. Here’s a quick guide to seven of those 13 mistakes!
DUMB THING #1 You Buy Financial Products That You Don’t Understand
Most financial products are boring … or complex. Sometimes fear lurks under the surface and prevents us from asking the right questions. Whether you’re tempted to buy gold, a reverse mortgage or a hedge fund, be skeptical and walk away if you don’t fully understand why the product makes sense for you.
DUMB THING #2 You Take Financial Advice from the Wrong People
Learn how to drop the other F-Bomb…FIDUCIARY! Fiduciary is the standard of care that you should seek in financial professionals because it ensures that they put your interests ahead of their own or their company’s.
DUMB THING #3 You Make Money More Important Than It Is
It may be surprising to see this statement in a financial book, but your upbringing or past traumas can influence your decision making…and usually not in a good way! An unhealthy attachment to money can lead to unhappiness, not to mention, financial losses.
DUMB THING #4 You Take On Too Much College Debt
An education is important, but don’t overestimate the value of a high-priced school. Yes, a college degree will boost income over the course of a career, but the debt associated with the degree can limit opportunities for students and their parents.
DUMB THING #5 You Buy a House When You Should Rent
A once in a generation housing crisis hasn’t cured us of our love of real estate. Before you dive into open house madness, consider your situation carefully, run the numbers and remember that renting is NOT “throwing money out the window,” rather it is buying opportunity and flexibility.
DUMB THING #6 You Take on Too Much Risk
Hey big shot, maybe you don’t need to take on so much risk! Start by setting reasonable goals and then only assume the risk necessary to reach them.
DUMB THING #7 You Don’t Have a Will
I know that you did not wake up this morning and think to yourself: “Gosh, today is the day that I will contemplate my own mortality by finally getting my butt in gear and getting to those estate documents!” But do you really want to be known as the most stubborn, selfish member of your family? This is the WORST of the 13 Mistakes that I outline…
Sometimes you’ll blow it: You aren’t terrible or stupid for messing up; YOU ARE HUMAN. When you screw up, sit on your pity pot for a short period – and then take control. Make real changes, get organized, create a plan, save, have uncomfortable conversations and please, laugh a little.
Jill Schlesinger, CFP®, is the Emmy-nominated and Gracie Award Winning Business Analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, on the “Jill on Money” podcast, radio (including her nationally syndicated show, Jill on Money, which won the 2018 Gracie Award for Best National Talk Show), the web and her blog, Jill on Money. Jill also won a 2018 Personal Finance Reporting Award from the Radio Television Digital News Association (RTDNA)/National Endowment for Financial Education (NEFE).
Prior to her second career at CBS, Jill spent 14 years as the co-owner and Chief Investment Officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University. Jill’s first book, The Dumb Things Smart People Do With Their Money, was published in February 2019 by Ballantine Books.