11 common financial mistakes and how to avoid them

Everyone makes mistakes. Learning from them is what really counts. Here are 11 common money mistakes and tips to move past them.

1. "I live within my means. If I have anything left after paying bills, I put it in my savings account."
   You've heard it before: Failing to plan is planning to fail. The best way to reach your financial goals is to develop a strategy to help you get there. Having a plan to follow will increase your chances of sticking to it.

2. "I have a credit card – I don't need an emergency fund."
   If you don't have three to six months' worth of living expenses saved in an easily accessible account, now is the time to start working toward that goal. Credit cards are not a good fallback plan – not being able to pay them off could cost you high interest and damage your credit score, and what if your credit limit isn't high enough to cover the emergency?

3. "I've been meaning to enroll in my 401(k) at work but haven't had time yet."
   An employer-sponsored retirement plan is a valuable benefit you don't want to pass up. With today's long life expectancies, you could spend 30 or even 40 years in retirement. The amount of time and effort it takes to enroll in your company plan is a small investment that can be well worth it.

4. "Retirement is so far away that I don't need to plan for it now. I'll have plenty of time later."
   Retirement shouldn't be an imaginary phantom for you. It should be a real event you plan for in your future. And it's never too early to start saving and investing. In fact, there's a cost to putting off saving for retirement.

5. "I don't have enough money to invest."
   Investing is not just for the wealthy; it's for anyone who wants to work toward a better financial future. In fact, if you participate in a retirement plan at work, you're already investing. But you can invest more, and you don't have to have a lot of money to start. Learn more here.

6. "The only way to make money is to buy and sell stocks frequently."
   We believe that constantly looking for today's hottest investment or best deal can actually undermine your success. In fact, history has shown that decisions about when to buy and sell can significantly impact your results. Read here for more.

7. "I don't have time to review my statements or meet with my financial advisor regularly."
   You've taken the right step to start saving and investing. Now don't let cobwebs overtake your efforts. Investing for your future is an ongoing process that requires regular attention and review, and it should change as your life changes. Read your statements and meet with your financial advisor at least annually to help ensure you stay on track.

8. "I don't have time to figure out what I spend each year for health care and dependent care expenses."
   Taking advantage of every tax deduction and credit you're eligible for is a money-wise decision. Talk to your tax preparer or visit www.irs.gov to understand the deductions and credits that are available.³ Make the effort to determine what you spent this year, and if that's not possible, resolve to start keeping track this year.

9. "My fiancé and I don't like to talk about finances."
   Engaged couples often spend months planning weddings down to the tiniest detail, yet avoid discussing money at all. Understanding each other's financial priorities and goals, and developing strategies you both can agree on, are essential to a successful relationship. Our checklist can help you get started.

10. "Estate plans⁴ are only for people who have a lot of money."
    The fact is, estate strategies are for everyone and can be as simple as having a will. Without an estate strategy, you have a default "strategy" in place – the laws of your state – which may not align with your desires.

11. "My debt will never go away, so why pay more than the minimum?"
    You may not think you have a ghost of a chance to get out of debt – but you can. But only paying the minimum on credit card or student loan debt may not get you there in a timely manner. Chances are you can find more money in your budget to put toward payments and cut down spending that keeps adding to your credit card balance. (Do you really need that $5 latte or $10 lunch every day? Such indulgences may seem small but can really add up.)