Sometimes we learn more from our mistakes than our successes.
Mary Hunt, founder of Debt-Proof Living, details what not to do with your money in her recent book, "The Smart Woman's Guide to Planning for Retirement."
Here are some of the top ways she says people sabotage their financial futures:
1. Living on credit. Hunt says unsecured consumer debt such as credit card debt, personal loans, and students loans is like a cancer. It starts small and then begins to grow. "If not treated aggressively, it can take over and do horrible things to your life."
2. Living way beyond your means. If you spend more than you have in order to keep up appearances, you're likely headed for financial disaster. Hunt says living below your means, and saving a little each month, is the best path to security and happiness.
3. Stripping your home equity. If you use your home to help make big purchases, say a wedding or college tuition bill, and can't keep up with the payments, you risk losing that home to foreclosure, warns Hunt.
4. Raiding your retirement accounts. Not only does pulling out retirement money halt the account's growth momentum, you could get hit with a double tax bill. "Don't think of your retirement account as a liquid asset," writes Hunt. "It is a frozen asset that is out of your reach for now."
5. Taking out college loans for your kids. Taking out a PLUS loan, Parent Loans for Undergraduate Students, to help pay for a child's education may be well-intentioned but diverts resources from your own retirement savings, which is not the gift you want to give your kids in the long term.
6. Procrastinating. You may rationalize that you're not saving for retirement now because you're young and poor, but you're missing out on the power of compound interest, says Hunt. "When you throw away time, you throw away money."