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Personal Finance Lesson

Personal Finance Lesson:
6 Top Money Mistakes to Avoid

We reviewed top money mistakes posted on various sites across the Internet and prepared our own short list:

1. Too Much Debt
If you can't pay it off completely, at least pay more than the minimum. You'll reduce the overall cost of your debt. This goes for 30 year mortgages too. Use Bankrate's calculator for an illustration.

2. Lack of Financial Goals
Know where you want to go or you will never get there. Isn't this true in every area of life?

3. Inadequate or Nonexistent Emergency Fund
Most experts recommend three to six months of reserves.

4. Failure to Budget
Without an understanding of where your money goes, you will find it difficult to live within your means. Not sure what the experts recommend? Try a budget calculator offered by financial expert, Carmen Wong Ulrich, and CNBC.

5. Little of No Retirement Savings
Consumer Reports calculates that, for the average worker, failing to save the maximum to your 401K can cost $36,000 and ignoring Roth accounts can cost up to $26,000. The numbers will be higher if you earn more than the average worker. Not sure what you need? Try a retirement savings calculator from Charles Schwab.

6. Ignoring Life Expectancy
Underestimating how long you'll live in retirement could leave you struggling in retirement. Take a look at MSN's life expectancy calculator and take stock. Retiring too early could cost you hundreds of thousands of dollars.

No matter what financial position we find ourselves in, we all can benefit from tips on how to manage our finances better. This is one area of life where learning clearly has a dollar value. The Internet offers us a wealth of knowledge. The trouble is, unless you know where and how to look, you could get lost is a maze useless information.

To explore this topic further or review more financial news and advice, visit the Financial News area of the Learning Center.

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