Common Money Mistakes and Their Solutions
If you’re caught in the “money mistakes” cycle, watch this interview with financial professional Cathy DeWitt Dunn on Fox 4 News KDFW in Dallas, Texas. Fox 4’s Jenny Anchondo and Cathy discuss the money mistakes we make over and over again such as delayed payments, overlooking interest, same-old savings, ignoring upkeep, and forgetting retirement.
‘Money Mistakes’ Interview Video Transcript
Jenny Anchondo: Alright, if you feel like you make the same money mistakes, over and over and over again, we’re here to help you break the cycle, or should I say Cathy’s here to break they cycle. Financial professional, Cathy Dewitt Dunn is joining us now to help and Cathy let’s talk about some of the, just the common mistakes that everybody makes and what to do to fix them, starting with delayed payments.
Cathy DeWitt Dunn: Yeah, it seems like everybody has had a delayed payment, but one of the big things is if you organize your bills, and you know if you really go and think about putting everything online, so you have automatic payments, so you don’t have to worry about it anymore. But it’s a very costly mistake, if you have late payments. It’s going to cost you more in interest down the road and if you need to go buy a car or a home, it’s going to cause you some problems as well later.
Jenny: You’re just giving away money at that point.
Cathy: Absolutely.
Jenny: Yeah. The other one, overlooking interest, and what do you mean by that?
Cathy: Well, you know, if you take a look at the interest payments that the average Texan will make in a lifetime, it’s over $217,000. But don’t panic, that includes your mortgage, your credit cards and your auto loans. So you really want to make sure that you focus in on high interest rate credit cards and get those paid down, because that’s an awful lot of money that you’re throwing out the window.
Jenny: And really shopping around too, and a lot of times you can call and say, “Hey, you know, will you lower my rate or I might leave,” and it seems like that can be pretty successful.
Cathy: Especially right now since the financial meltdown is over, people are able to negotiate interest rates on their credit cards.
Jenny: The other thing that you mentioned is having the same old savings account, so are you saying that we should do something that’s maybe going to be a little bit more lucrative for us, or maybe you just earn us a little bit more money?
Cathy: Yeah. I mean, I think you need to look at all your different options. Traditionally, everybody looks at CDs and money markets, and they shop at their bank. With my clients, I help people look at other different rates and if you sit down with your professional adviser, there’s some other great programs out there. Maybe look at annuities or contribute more to your 401k or to your IRA. But look at your options and open your mind to a new idea.
Jenny: Do you think that it’s scary for people, if they’ve been doing CDs, you know, since they were a teenager, like that’s what their parents did, do you think it’s scary for people to delve into other options?
Cathy: I think it is, but I think one of the challenges is we’re in such a low interest rate environment right now, so people need income. They want to have returns and there are some great solutions out there.
Jenny: Now the other big money mistake you say people make is ignoring upkeep. So you’re talking about like for houses or just for any other big purchases?
Cathy: Yeah. Mainly, I think you need to look at your house. I mean, you service your car, you get oil changes, you know filter changes, etc. Well on your home, think of it as spring cleaning. Go ahead and get your windows re-caulked, take a look at your doors, get your air conditioner serviced, because one of the things too is that little repairs are inexpensive if you start servicing them, but big major expenses down the road if you don’t maintain it.
Jenny: Sometimes when we are worried about something, we just think that it’s such an insurmountable task, that we just cannot possibly deal with it and I think some people have that idea when it comes to retirement. You know, just like, I don’t know how much I’m going to need, I don’t know how much I’m going to save, so I’ll just spend it all right now and worry about it later. But I know that that’s not our best course of action, is it?
Cathy: No, it’s not like you’re going to be able to go out and breathe and finance your retirement later down the road, so you really need to save today. Most of my clients, I tell them, you need to put away at least 10% per year, out of sight, out of mind. Maybe have it auto-drafted, but you really need to start planning for your retirement today, because most companies aren’t offering pensions anymore.
Jenny: One real quick tip from you, if somebody is watching this right now, and thinking this all just brought up a lot of stress for me and a lot of worry for me, what’s the first step they should take right now?
Cathy: You know what, if you’re really not on track, just focus on one of the things that we mentioned today, and if you feel totally overwhelmed, find a great financial professional that can sit down, eliminate some of your stress and your anxiety, and get a plan on paper, and that will make you feel a lot better.
Jenny: Cathy Dewitt Dunn, thank you so much for the advice.
Cathy: Thank you.
Disclosure: For informational and educational purposes only. The information contained herein may contain information that is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor.
