(MONEY Magazine) – As David Chilton, the Canadian author of the popular personal-finance book The Wealthy Barber (Prima Publishing, $18.95), prepared to bring his folksy brand of advice to a public-television special in March, he chewed the ear of MONEY's Wall Street correspondent Jordan E. Goodman about mistakes people make with money:

Q. What is the most common money blunder? A. Procrastination. People get serious about saving far too late. I like the example of the twins. Beginning at age 22, one invests $2,000 a year for eight years and then never sets aside another penny. The other waits 10 years and then invests $2,000 a year for the next 33 years. At age 65, assuming they earn 8% a year, they both end up with the same $347,000. People underestimate the power of compounding.

Q. How do people mess up when buying life insurance? A. They buy accidental-death insurance, such as travel insurance at airports. It doesn't matter how you die -- what matters is that you're dead.

Q. You often warn people not to buy bond funds. Why? A. Most people who switch from a bank CD to a bond fund for a higher yield % have no idea that they have increased their risk. If interest rates rise, as they may this year, you may never get your principal back.

Q. What do you advise someone getting a lump-sum severance package? A. Don't spend the money. That's the biggest temptation. Instead, you should roll it into some form of tax-deferred account like an IRA or a Keogh. Then, invest the cash partly for growth and partly for income.

Q. What about budgeting? A. I don't believe in it because most people can't stick with it. Budgeting is like dieting -- it only makes you feel deprived. The best way to save is to pay yourself first by automatically depositing some of your gross pay -- 10% if you can afford it -- into a 401(k), a mutual fund or a bank account.