The worst money mistake is easy to avoid, says author of 'The Dumb Things Smart People Do With Their Money'


It's wise to plan ahead when it comes to your finances, like by saving up for a down payment on a home, stashing away money for retirement, and by creating and maintaining an up-to-date will.

In fact, not having a will is the worst financial mistake you can make, says Jill Schlesinger, a certified financial planner and business analyst for CBS. It's "by far the worst thing you can possibly do, because the stakes are so high," she says.

"You can make the worst investing decisions and come back from it," Schlesinger explains. But if you put off estate planning and something happens to you, "it's impossible to correct it."

In Schlesinger's new book, "The Dumb Things Smart People Do With Their Money," not having a will or lacking an estate plan is listed among the 13 most common and costly financial mistakes people make. Roughly two-thirds of Americans don't have a will, according to a recent survey from legal book and software publisher Nolo.

The stakes are so high.
Jill Schlesinger
Author of 'The Dumb Things Smart People Do With Their Money'

The consequence of not having a basic estate plan boils down to this: Your money and belongings may not go to the people you'd prefer. If you don't have a will, for example, state law may determine how many assets are distributed.

Luckily, not having a will isn't a hard problem to solve. Here are two easy ways to get started with estate planning:

Use technology to create a basic will

One simple way to get started is to use an app or online service to build a basic will. Depending on the service used and your situation, drafting this document could take less than an hour — although you'll typically still need to sign the will and get it notarized.

Experts caution that online will-making services may not be a great fit if you have a complicated family or financial situation. And states have their own, often differing, requirements around making wills.

So it can still be smart to work with a lawyer, or at least run your basic will by one, to make sure you're set.

Financial experts reveal their biggest money mistakes

Video by Ian Wolsten

Name beneficiaries and keep them up-to-date

Some assets, including life insurance and retirement accounts, let you name an account beneficiary. If you don't list anyone, that money becomes part of your estate, which can be an expensive mistake. If you do list someone, that person or people get the money even if you leave different instructions in your will.

That's why it's so important both to list beneficiaries and keep those names up to date — otherwise, your money could end up going somewhere you'd rather it didn't, like to an ex-spouse. Updating beneficiaries can take under five minutes.

"This is one of those forms that doesn't seem important, but it's perhaps the most important document in all of your financial planning," Kristian Finfrock, founder of Wisconsin-based Retirement Income Strategies, told Grow last year.

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