It is no secret that most Americans are not saving enough. Experts usually cite a lack of financial knowledge and poor decisions as the main culprits. But what makes even people who should know better make these mistakes? The answer is emotional blind spots, according to the book, The Dumb Things Smart People Do With Their Money: Thirteen Ways to Right Your Financial Wrongs.

The author is Jill Schlesinger, a former Wall Street trader who is now a financial advisor and CBS News business analyst. She explained how emotional decision-making can devastate portfolios in an interview with Knowledge@Wharton radio show on SiriusXM.

An edited transcript of the conversation follows.

Knowledge@Wharton: In the book, you give the example of a smart friend of yours who was successful in business but made mistakes in his personal finances. Do you think that’s a common problem?

Jill Schlesinger: Absolutely, we find it over and over. I have a weird career. I started in Wall Street. I was a commodities trader on the floor of the commodities exchange, and then I became a certified financial planner. I own my own investment advisory and money management firm. And then I became part of the CBS family.

Through all these stages, it always struck me as strange that I would meet these incredibly smart professionals who would talk to me in hushed tones and say, “I’ve just got to talk to you for a few minutes.” The common denominator that I have found over my more than 30 years in financial services is that, when it comes to money, we are often gripped by our emotions. There’s no getting around it that we are human beings; we’re not always rational.

All of the books and the advice out there that try to quantify every single personal finance decision and make it a mathematical equation are missing the boat, because we are just not programmed to make great long-term decisions.

Knowledge@Wharton: You refer to some of these mistakes as blind spots. Why?

Schlesinger: Because when you have someone who is otherwise intelligent and makes a mistake, usually the mistakes are caused by their emotions—fear and greed and the cognitive biases that are preprogrammed into the human being. I really wanted to make sure that I could write a book for these kinds of people: my friends, my colleagues, my former clients, my own podcast listeners and T.V. viewers who shared their dumb things, but they actually own it. They say, “You know, I think I did something dumb, but I need help.” The whole point of the book is to say we’re all going to do these things, and here is a way to avoid it.

Knowledge@Wharton: What are some of the more common mistakes that people are making these days?

Schlesinger: I start the book with two dumb things that I hear about all the time: People buy financial products or some financial investment that they don’t understand, and the second thing is that people are taking financial advice from the wrong kinds of people. Let me start with dumb thing No. 2.

Can I drop an F-bomb on your show? It’s fiduciary—that F-word. When we talk about financial advice, there’s this concept called fiduciary. A lot of people know that concept because, if you’re a CPA, if you’re a certified financial planner, if you’re an attorney, if you’re a doctor, you have to put the interest of your patient or client before your own.

That makes sense. But not every person who gives financial advice is held to that standard. A lot of times, people are being sold products or they are being given advice that is not necessarily in their best interest. I think that it is important to put that out there.

There are tons of people who are selling stuff to you, and it does not have to be in your best interest. That can lead to…you buying stuff that you don’t really understand. Yet you, a really smart professional, may feel a little embarrassed about asking a question and saying, “Well, I don’t really understand this,” because maybe you feel you should understand it. It’s really important to make sure that you don’t buy financial products that you don’t understand and that you try to avoid taking financial advice from the wrong people.

I tell the story of my dad being in an ICU and I’m asking the doctor questions. My dad turns to me and says, “Why are you asking these questions? It’s insulting to him.” I said, “Dad, I’m just asking whether you really need the test?” There are certain people who feel almost embarrassed about that. I want everyone to get over it because, frankly, really wonderful financial professionals love fielding those kinds of questions because they want you to feel good about whatever it is that they’re discussing.

Knowledge@Wharton: College debt is a big concern for many Americans. What are some of the dumb things you have you seen regarding college debt?

Schlesinger: A million different pieces of research show us that people who have college degrees make more money over the course of their career. However, what we don’t know is just how much taking on all of the debt to achieve that college degree is really impacting people.

The story’s been told of the poor millennial, and I feel bad for these kids because they came out of school with piles of debt and not great job opportunities. I get that. But I’m much more focused on what is happening to the parents and grandparents of these kids who are saying, “I want you to have an education at any cost, so I will delay my retirement or dip into my retirement to pay for your education, or I will go into debt to get you that education.”

The fastest-growing segment of student loan borrowers is those over the age of 60. That is mind-blowing. I want people to really be thinking that [attending a private university] is not a God-granted right that you must deliver to your kids. You’ve got to look at the family’s finances and see what everyone can afford.

Knowledge@Wharton: Don’t you think we are seeing more people having financial issues after retirement? It’s a dynamic that affects both parents and their children.

Schlesinger: The weird thing about finances today is that it used to be each generation will deal with an issue on its own. What we’re finding more and more is an intergenerational linkage of family finances. We talked about college. I have a friend of mine whose parents retired too early, spent a bunch of money, now their retirement shortfall has become his problem.

One of the things that I did in this book was really talk about the conversations that are so hard to have. But we want you to have them because if you don’t, you are taking on this huge responsibility and risk that you don’t know about.

What’s worse—having the awful conversation with your parents to ask what’s going on in their financial life, or having something really bad happening later on that you’re surprised about?

Knowledge@Wharton: You also talk about identity theft, which is a global problem. What issues are mounting because of it?

Schlesinger: It’s the funniest thing because everyone’s like, “Yeah, yeah, yeah, I know about identity theft.” It’s kind of a boring topic, but you really need to do something about it. We’ve had two huge data breaches in the last two and a half years. We had Equifax in 2017. We had the Marriott and the Starwood one recently.

It’s safe to assume that your information is out there. What that really means is that this is a weird, intangible threat. If I said to you, “Hey, there’s a lion coming,” you’d get up and you’d start running. That’s a tangible threat. But the behavioral economists will say it’s very difficult to address these intangible threats and react to them.

We can become lackadaisical. But I do think it’s going to become a bigger and bigger issue. Take control of it and make sure that at least you’re not giving identity thieves the low-hanging fruit. Let them go to the next car. My mother used to say, “Lock the door because maybe they’ll go to the next car to break in.”

Knowledge@Wharton: It’s more than just changing your passwords every couple of months. I don’t think we’re ever going to get rid of identity theft, but maybe we can mitigate it a little bit.

Schlesinger: You are born with a Social Security number and your credit file is frozen. I’d like to argue that we start frozen and, if you need to borrow money, you must then unfreeze it. And then you can freeze it again.

When the Equifax data breach occurred, people really got a hard lesson in what that meant, which is your credit file is being sold. It is open and available and the risks are enormous. Lock it down, because even if someone steals your information, if your credit file is locked down they’re going to have a harder time doing something with it.

Knowledge@Wharton: You also take on the debate of buying a house versus renting. That’s a challenge many Americans face, especially after the recession. Can you talk about that?

Schlesinger: You would think that a once-in-a-generation housing boom and bust would cure us of the notion of that gauzy, great American dream. But man, it’s strong. Everyone loves to watch HGTV and stuff like that. What has always been interesting to me is that, when people look at housing and real estate, it has this very sexy appeal.

The problem is that there are far too many people who are saying, “My parents told me renting is throwing money out the window.” It’s not, actually. Renting is simply buying opportunity. In fact, I think that’s the way you should be thinking about it.

Too many people go into homeownership really financially unprepared. They haven’t run the numbers, haven’t figured out whether renting is preferable. They maybe were counting on tax benefits that may not be there anymore now that we have the limitation of the state and local tax deduction at $10,000 in many of these high-tax states.

What I want people to figure out is, what is going on in your life? Have I run the numbers? Does this make sense, or am I trying to look at the best-case scenario? Someone may think, I just want to buy this house in Arizona. I can’t really afford it now, but I’ll just rent it out. Then the market falls out from under you.

What we do know is that—at least over the last 10 years—we’ve cured an entire country and generation of the idea that real estate values never go down.

Knowledge@Wharton: Five years ago, millennials did not even want to consider buying a house. A lot of them are now at the age where they are thinking about it. Do you think we’ll see a shift back to younger people wanting to buy?

Schlesinger: Going back to the college debt issue, it’s not that millennials were saying, “I don’t want to buy a house.” It was, “I’m saddled with $50,000 in student loans, so it doesn’t make sense right now.” As those kids got a little bit older, we did see them starting to buy homes. We went through this strange period where housing affordability is not great in many markets.

Maybe some people who would have been enticed to buy early in the recovery when prices were really cheap didn’t have a good enough job or hadn’t replenished savings. Now, in the last few years, we have affordability at pretty rotten levels, so we have many markets where it’s much better to be a renter than a buyer.

Honestly, if you want flexibility, if you want to be able to take advantage of a job opportunity in Austin, Texas, or Philadelphia or in Portland, Oregon, buying can be a problem. If you can buy a house, great, go buy a house. There’s nothing wrong with it. But don’t do it just willy-nilly.

Knowledge@Wharton: At what age or stage in life do people need to have a will?

Schlesinger: If you’re an adult, as soon as you have some [assets], you probably need a will. There are times when I meet a 25- or 30-year-old who’s working and says, “I don’t really have that much. I have a 401k, so that will pass by contract to my named beneficiary. No big deal.” Then I’ll say, “If you drop dead tomorrow, would you want someone to [inherit] something?” And they start thinking, “Well, I do have this amazing baseball card collection that’s great.”

My big joke is that I have this great fear of getting hit by the M57. It’s a bus that goes very fast in New York. I say, “If you got hit by a bus tomorrow and were incapacitated, who would you want to make the decision about what would happen to you?”

Estate planning is something that needs to really be taken care of. If you have kids, you have to have a will and a power of attorney and a health care proxy. If you’re married, you should. If you have any sort of assets, you should.

If you care about decisions regarding your end of life…then you need to get that planning done. Remember, this is one of the worst mistakes to make, because once you make it, your heirs are left with a pile of crap to sort through after your death.

Knowledge@Wharton: You finish up the book talking about the market. How prevalent today is timing the market?

Schlesinger: I fought with my editor to get this chapter in because he said, “No one does that anymore.” I said, “Really? I did it when I was a young money manager, and I get asked about this time and time again.”

Let me give you my specific recent experience. You may have heard that things at CBS News have been a little volatile and the stock price has been moving around like crazy. I cannot tell you the number of emails that I got from people who said to me, “What should I do with my CBS stock,” because they match in CBS stock inside the 401k, plus there’s a lot of people who have acquired this stock. I realized there are so many people who are trying to figure out the exact perfect time to unload or buy more of their CBS stock. I said, “You really think you’re smarter than the market, don’t you? Let me explain to you why market timing doesn’t work. Make two perfect decisions: when to sell and when to buy, or vice versa.”

Smart people, specifically, tend to fall prey to this because they’re so smart they believe in the power of their human intelligence. They’re a bit more self-righteous and less self-aware about these topics. They think that there is some little man behind the curtain, the great Oz that’s going to figure out the way to beat the market.

Here are the things that we know: We know that market timing is really hard over the long term. We know that it is very difficult to beat an index over the long term consistently. And we know that for probably 99% of investors, sticking to low-cost index funds that are basically put in place according to a game plan and rebalanced every so often is the key. You don’t have to be smarter than the market.