No matter how financially savvy we might be, we are all going to make mistakes when it comes to our personal finances. It could be something as simple as forgetting the due date on a credit card or something as major as coming out on the losing end of a stock trade.

Here are some of the most common personal finance mistakes that people make and ways that they can be avoided.

Not having clear goals.

One of the most important things you can do when planning anything is to make goals for yourself. I don’t mean simply making goals that you keep in your head, but goals that you actually write down so you can make sure you hold yourself accountable. While it’s great to have short-term goals, it’s even more important to have more specific long-term goals.

A good example would be a growing family that wants to upgrade the size of their house. Instead of saying, “I want to buy a new home”, the family needs to be specific with their goal. How much money do they want to save each month? Where will this money be placed so they are not tempted to use it? When do they want to make their down payment?

Most people are too broad when it comes to making goals in their personal or professional lives. By writing specific, well-reasoned, and realistic goals, you can give yourself a clearer path to financial success.

Using high-interest debt.

One of the biggest financial mistakes you can make involves taking on high-interest debt. Whether you use your credit card for a cash advance or take a loan from a payday loan company, these forms of debt have enormous interest rates that can quickly get out of control if the debts are not repaid quickly.

The average payday loan is $375 . Though this money can offer short-term assistance, it is easy to quickly fall behind on payments when you consider the fees and rates tied to the loan. With smothering interest rates, debts can grow quickly, oftentimes requiring the borrower to take out another payday loan. The cycle can be financially devastating.

When most people find themselves in need of a payday loan or cash advance, they generally do not have any other options. Poor credit has cut them off from safer financing options. Rather than turning to high-interest debt, it is useful to work on fixing your poor credit score. Identifying and eliminating unnecessary expenses and properly using a secured credit card are two techniques that can be used to help rebuild a credit score.

Please note: Using a secured credit card carries its own risks. If you fall behind on payments, your debts can quickly get out-of-hand. However, if you are able to pay the fees and make the monthly payments, your card provider may report your positive history to the major credit bureaus, helping you to boost your credit score. Please review any card offers to check different fees and verify that the card can help you build your credit score.

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Not accounting for taxes.

Anyone that has ever been self-employed or worked as a freelancer understands that taxes are not being withheld on your behalf (as they would if you worked for a larger company). Working on your own does not exempt you from Social Security and Medicare taxes. If you do not set aside a portion of your income each month to cover these expenses, you could be in for a real surprise when it is time to file taxes in April.

To better prepare yourself, set up a business checking account. Using this account, you should pay yourself 80% of the previous month’s profits to use for other expenses and to put towards other saving mechanisms. This will leave 20% in the business account that you can use for your taxes. This should allow you to rest easy when it comes time to file your taxes in April.

Not taking advantage of an employer 401(k).

If you work for a company that offers a matching 401(k), there is no reason why you should not take full advantage . The sad truth is that there are plenty of people that fail to accept this free money that their employer is offering them. Of those individuals that do contribute, only 77% of them actually contribute up to the full employer match .

Even if you have a separate retirement plan set up outside of your office, find out how much your current company is willing to contribute and make sure you take full advantage. If you need to readjust your current plan to fit your budget, then do so. Not taking advantage of your company’s matching 401(k) can cost you thousands by the time you retire.

Making a purchase at retail price.

A huge mistake that many consumers make is paying full price for anything. There are hundreds of websites available that can help you make smart purchasing decisions.

Websites like will allow you to compare the prices at different stores so that you know you are buying from the cheapest source. From there you can use websites like to find a coupon code or printable coupon that will allow you to further lower the price. Lastly, you can use a cash-back website like so that you can earn additional money back on most online purchase.

We are all going to make a financial mistake or two during our life. By understanding how to avoid several common mistakes and by seeking help from financial professionals for other issues, we can steer ourselves down the right path to financial success.