Dear Readers, You may think you’re safe, but you should always watch out for some common money mistakes. In fact, the reason they’re so common is that they’re so easy to overlook. But fortunately, with a little extra caution, they’re also easy to avoid. You’ve probably seen most of them before, but I think they’re worth a quick refresher.

Treating yourself is fine, as long as you're not living beyond your means. To create and stick to a realistic budget, first make a list of your necessary monthly expenses, including savings. How does this compare to your after-tax income, taking into account any infrequent but predictable expenses? Now you know how much latitude you have to add in the extra nice-to-haves. That way, your splurges won't come back to haunt you!

Unexpected expenses do creep up on you. It's not a matter of if, but when. To prevent a bigger disaster, plan to set aside enough money to help cover three-to-six months' essential expenses in an easily accessible savings or money market account. That way, you can be better prepared.

While using credit can be fine and is certainly convenient, too much "bad" debt -- like credit cards and other high-interest, non-deductible consumer debt -- can be a nightmare. Be sure you don't charge more than you can pay off each month and if you're carrying balances, create a plan to tackle them right away. Start by paying as much as you can on the highest interest debt, while always making at least minimum payments on the others. Work your way down until your balances are paid off--and stay that way. On the other hand, "good" debt, things like your mortgage or student loans, can work for you if you manage them wisely. 

Outliving your money is a frightening prospect for anyone. So don't waste a minute in starting to save for retirement. Contribute at least enough to your company retirement plan to get the largest possible match. Try to target saving at least 15 percent of your gross salary between you and your employer toward retirement. You can make it easier on yourself by putting all of your contributions on automatic. 

Opting for minimal insurance coverage may save on premiums, but it could end up putting you in financial jeopardy. Not having enough medical, auto, homeowners/rental or disability insurance could mean big bills when you're least able to pay. As you shop for coverage, be sure to take full advantage of all your employee benefits -- from health to disability to life insurance.

On the other hand, don't be lured into buying insurance you don't need. Typical insurance gotchas are things like life insurance if you don't have dependents. Long-term warrantees on appliances are also generally a waste of money. Also check your credit card coverage before you shell out for rental car or trip insurance. 

Market volatility might have scared you off, but long-term investing in the stock market is still one of the best ways to help grow your money. The key is to invest in a diversified mix of investments that are appropriate for your time frame and your feelings about risk. That said, don't try to time the market and don't bet on a single stock. But if you want the potential for financial growth, definitely do start investing.

Don't jump to collect Social Security benefits earlier than you need to. The earliest you can claim retirement benefits is at age 62. For those born between 1943 and 1954, the SSA considers your "full retirement age" to be 66. This terminology is a bit misleading, though, because your benefit will continue to grow about 8 percent a year until you reach age 70. The difference can add up to a considerable amount of money, especially if you enjoy a long life.
To me there's nothing more frightening than not having a will naming a guardian for your minor children. Beyond that, the complexity of your estate plan will depend on your personal and financial situation. But if you don't put at least the basics in place -- Wills, Powers of Attorney for Healthcare and Financial Decisions, and Advance Health Care Directives -- you may be leaving your loved ones with a web of difficulties.

You may be bravely following your own financial path, but when it comes to your financial future, it's good to have a guide now and then. Talking to a financial advisor, at least occasionally, can give you a more realistic picture of where you are and the plans you need to put in place. 

Things are always scariest in the dark, and that includes your money. Even if you generally take the lead, make sure that your spouse or partner understands your finances and participates in all major decisions. And when it comes to estate planning, make sure any adult children as well as relevant parties -- financial advisors, tax professionals, attorneys, business partners -- know what to expect.

There's really no mystery to avoiding these common money mistakes. Just be aware and alert. By doing so, you'll treat yourself to a more secure financial future. Happy Halloween!

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