We’ve all made ‘em. Those financial mistakes we look at later and beat our palms against our foreheads for. Unfortunately, sometimes it is too late to change our actions and we have to work through minimizing the effect in our lives. Sometimes we aren’t even aware and just go right on making the same mistakes over and over again. And some still, are fortunate enough to have not made these mistakes yet. Let’s take a look and see which ones look familiar to you:

Spending more than you make.

Duh, right? Well, not so much. For many people, credit cards and loans are a way of life. While we may seem to be doing just fine on the surface, in the reality, we put purchases that we can’t afford to pay outright on to credit cards and vow to pay them off “later.” Clothes, food, restaurants, trips. It all counts. And the problem is, we get an artificial feeling of security in what we have to spend, without realizing we don’t have the means to pay off these purchases. Which in turn, would mean you are spending more than you make. This puts you at risk of financial hardship and inhibits the ability to save and invest for your future. Double whammy.

Caring about what OTHER people spend their money on.

Reality is, we can’t (and shouldn’t) afford it all. Just because your neighbor values having a brand new leased car every other year (eek!), it doesn’t mean that needs to be your thing. Maybe you love to mountain climb and spend money on gear. Cool. But you may find you decide to forgo spending money on “normal” things that others value more than you do. You have nothing to prove to anyone. Who cares if you have an old car if you have cool mountain gear and a secure financial future that means more to you than a shiny set of wheels? The answer is, “it doesn’t matter.” Your finances are none of their business and vice versa. If we try to keep up with everyone else, it is a sure fire way to go broke and be unhappy while doing it. Plus, looks can be deceiving. Just because Fred across the street seems to have his stuff together, doesn’t mean he does. Keep your head in your own yard and stop trying to keep up. It’s not worth it and it doesn’t improve your quality of life.

Being house poor.

This is a tough one. Having the house you want can not only be a status thing, but also an emotional thing centered around stability and family. However, getting into a house that is too much to chew financially will leave you broke and miserable- and unable to enjoy it. Carefully consider your finances and your lifestyle and what the house payment you are looking at would mean to your life. Rule of thumb is your house should not be more than 25% of your income. While this may vary slightly for some, it shouldn’t deviate far from that number. After paying your housing payment, you should have money left over for your other bills, savings, and fun. If you have to suffer without the extra bedroom for a little longer, so be it. Nothing like a cozy family home- and it saves significantly on maintenance (think repairs) and operating costs (heating, cooling, etc.) as well.

Buying a car that you can’t afford.

New cars go down in value the minute you drive them off the lot. They depreciate the entire time you own them. They break down eventually, and you either sink money in to repairs or you replace them. So unless you are truly financially solvent and can afford to pay cash for your cars, why go overboard? Reliable, safe and clean do not need to mean brand new and expensive. There are tons of good used cars out there that you can either pay for in cash (while saving over time in your budget) or financing with a low payment and paying it off quickly. That high payment repeated year after year robs you of the ability to put that cash into your future (with compounded interest) or into some other experiences that will offer you more than a new car ever will. Again, it goes back to your own personal priorities. Can this rule be applied to different kinds of purchases in your life?

While there are a ton of ways you can mess yourself up financially, there are just as many fixes and valuable lessons for when you do wander down a sticky path. Just keep your head up, own up to mistakes, and keep on going!