Even the smartest people make money mistakes, so if you’ve ever made a dumb move with your finances, you are not alone.
Jill Schlesinger, CBS Business Analyst, podcast host, and author of “The Dumb Things Smart People Do With Their Money,” says there should be no shame in making dumb money moves. The shame, rather, is in repeating bad habits.
Schlesinger sat down with Yahoo Finance to discuss how we can correct our path and be smarter financially.
Don’t ignore your finances in your 20’s
Your 20’s is a great opportunity to “take your temperature” financially and understand your relationship with money. Schlesinger says she became a financially risk-averse adult after witnessing her father lose money during his career as a trader. It’s a good idea to pinpoint influences like this, which “can actually make you a better functioning adult in terms of your money. It’s an ‘aha!’ moment in therapy, it’s an aha moment in your financial life, and you’ll usually course-correct.”
Don’t buy the hype
While a college education is important, Schlesinger warns families to watch the price tag.
“We just want parents to be able to have honest conversations,” Schlesinger says. “That means having a conversation with your kid when he or she is a freshman in high school” about the costs of college.
She encourages families to avoid the hype, and let their children know sooner rather than later what the family can afford. “Going into debt that really is going to hamstring you for decades in the future – I don't think that's the best outcome for anyone involved,” she says.
Don’t rely on yourself for good money habits
Schlesinger suggests making payroll deductions into Roth IRAs, or putting away a bit of your income into a savings account, using apps that can make the transactions automatically.
This way, she says, “you don’t even have to form the good habit, technology will help you form it for yourself.” When people track their money automatically, Schlesinger says, “they rip away all the judgment, everything that’s been creeping into their brains, telling them they’re a bad person.”
When there’s a plan in place, you can stick with it, and revisit it as life changes through good and bad times. Schlesinger reminds us that as humans we are not wired to do this incredibly well.
“Acknowledge it, deal with it, and then pick the best solution for you to move forward,” she says.