What could be more humiliating than having to go to your adult kids, hat in hand, to ask for help with paying your bills? It can happen. How many of these mistakes do you recognize?

1. Supporting adult children The trend to keep those apron strings in a knot is bad for everyone. Do you think the “Greatest Generation” expected their mommies and daddies to pay their credit card bills when they came home from WWII? Your children have youth on their side – you don’t. Cut the cord and quit enabling.
2. Spending too much on college How long will you have to work to justify $100,000 in student loan debt? We’ve observed an alarming spike in student loan balances over the last few years. This may sound heretical, but college isn’t for everyone. If you do need that degree, spend and borrow wisely. Consider a “gap year” after high school to mature and figure out where you want to go in life. Don’t take classes you don’t need and consider attending community college for at least part of your education.
3. Buying too much house I’ve never seen anyone spend their way into financial security by piling on the tax deductions. Don’t trick yourself into thinking a bigger mortgage interest write-off is a good thing. You’ll be much better off with more money in your pocket and less deduction. And to avoid being on the hook for mortgage insurance, don’t buy a house until you can put at least 20% down.
4. Failing to participate Do not ever pass up a matching retirement contribution – where else can you get an immediate 100% return on your money? If you save until it hurts now, you’ll not only develop the habit, but you’ll have a cushion for emergencies when you would rather not deliver pizzas after work. (By the way, I’ve yet to have a client tell me they regret putting so much into their 401k.)
5. Underinsuring Medical bills are the number one cause of bankruptcy filings. If you are age 50+, you should, in most cases, be shopping for long-term care insurance. In fact, at that age, you may be in a position to cut back on life insurance and redirect that money to a long-term care policy. And don’t skimp on disability coverage, either, even if it’s not offered as an employee benefit.
6. Cashing out retirement plans Liquidating your 401k when you change jobs may seem like “free money”, but it is one of the most costly mistakes you can make. Not only are you paying taxes and penalties, you’re forfeiting future growth of your money, which could mean one less vacation you’ll enjoy or having to work an extra year before you can retire. Instead, roll your account into an IRA, set it, and forget it.
7. Holding too much in cash Sounds counterintuitive, doesn’t it? While everyone should have a liquid emergency fund, going overboard and keeping all of your savings in cash is letting inflation gobble up your net worth. Build your emergency fund then pay down high-interest debt then add to your investments.
8. Investing in things that depreciate rather than appreciate Does it make sense to take out a 72-month loan on a car that loses value the day you drive it home? If you must borrow, take out a very short-term loan (say two or three years) so that you can keep your car after it’s paid off. A new truck for commuting today may mean you’re driving a clunker at age 65.
9. Emotional investing aka buying high and selling low. Lack of behavioral control is responsible for over 90% of the losses in the stock market. As Peter Lynch said, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”
10. Not diversifying – Are you putting a big chunk of your retirement in your company stock plan or counting on your small business to carry you through retirement? Very risky plan. You should invest till it hurts in a well-balanced portfolio of quality equity mutual funds and rebalance annually, even after you retire.