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The 7 deadly sins of personal finance

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SALT LAKE CITY — We’ve all done stupid things in our financial lives, and we don’t think that we’re unique in that situation.

That’s why Dave Noriega and Debbie Dujanovic, hosts of Dave & Dujanovic on KSL NewsRadio, think that it’s so important to have open and honest conversations about what our finances really look like in the cold light of day.

“We don’t talk about how much money we make, we don’t talk about how much we spend or how much debt we’re carrying around on our credit cards,” Dave said on Monday’s show.

“[Finances are] one of the biggest stressors in your life. It’s the reason most marriages end,”  he continued.

So where do you start looking?

The seven deadly sins of personal finance

Sometimes it’s easier to break problems down into more manageable chunks and deal with them individually. Author Brett Wilder established “seven enemies to financial success” in his book, “The Quiet Millionaire.” Financial guru J.D. Roth took Wilder’s list a step further and called it the seven deadly sins of personal finance. They are:

Lack of Discipline

The fact of the matter is that you can’t build wealth if you can’t keep any money around, Wilder writes. Sometimes it feels like money comes in one hand and out the other — like it’s burning a hole in your pocket.

That’s why Dave likes to keep cash around.

It’s just more difficult for me to turn over that five spot!

Wilder advises finding out where your spending is going. Once you know where all of your money is going, you can start making the decisions about whether or not you need that subscription here, or that lunch out of the office there. Knowledge, he says, is the greatest weapon you can have when it comes to your finances.

Materialism

The next big enemy to your financial success is materialism. Having more things isn’t going to make you any happier, Wilder writes.

Wilder says that the mentality of keeping up with the Joneses can lead to what he calls “lifestyle inflation.” Each purchase you make leads you further and further down the treadmill and sets the bar higher and higher every day and then it becomes even harder to get out.

Debt

Now, Wilder would tell you that not all debt is bad. Most of us don’t have the ability to save up enough cash to drop a duffel bag full of cash off at the real estate agent to pay for a house in full. Of course, you’re going to finance the purchase of a home.

But he says you do need to watch out for all of the other things that you might be breaking the credit card out for.

Debt, he says, can be the biggest enemy to your financial wellbeing.

Inflation

It’s hard to keep track of this, but inflation is always something to be aware of and Wilder says there are steps that you can take to mitigate its effects. You know the things you enjoy now are going to cost more later. Plan ahead for that.

Taxes

Don’t overpay the IRS. Figuring out how much you need to pay in taxes accurately can keep more of your money in your pocket working for you, Wilder advises.

Investment Mistakes

Whether it’s a poorly structured portfolio or a perpetual timeshare, Wilder says you need to make sure that when you decide to put your money to work, it will work for you. Education, he writes, is your best bet to avoid mistakes in investing.

For his part, Roth advises against trusting outside information or even the news for your decision-making. He stresses the importance of always doing your own homework.

Emergencies

Perhaps the biggest enemy to your finances is unexpected, Wilder says. Sometimes the sewer breaks, sometimes the roof leaks; Oscar Wilde said it best when he warned us all to expect the unexpected. Having a plan for when things go wrong can take a lot of the stress and uncertainty out of a situation when things take a turn into the unexpected.

The $1,000 Challenge

$1,000 Challenge

Dave & Dujanovic introduce the $1,000 Challenge. (Image: KSL Newsradio)

Join the $1,000 Challenge Facebook group to see other brilliant ideas on how to get your budget in check and to be a part of a tribe that’ll encourage you every step along the way.

 

And tune into Dave & Dujanovic every day from 9 a.m to noon on KSL Newsradio 102.7 FM / 1160 AM for financial tips and tricks.

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon on KSL Newsradio. Users can find the show on the KSL Newsradio website and app, as well as Apple Podcasts and Google Play.