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By Jill Schlesinger
November 8, 2016

We all have a few blemishes on our financial decision-making ledger — some more costly than others.

But if we are all going to make mistakes, we can hopefully learn something from them that will help our finances in the long run.

Let’s start by stating that some “mistakes” are really just bad luck. The person who purchased a house at the top of the market in 2005 may have wished that she waited until the bottom fell out of the housing market — but if the numbers made sense at the time she bought, it probably was not a mistake. The same is true for the long-term investor who put a lump sum of money to work in October 2007, when the stock market was peaking — or the person who had the chance to invest in a great venture early, but could not pull the trigger because he was afraid of a loss.

These are not errors, but they are examples of rotten timing — or, in that latter example, of simply being risk averse.

More common financial mistakes include taking on too much credit card debt, failing to create an emergency fund or plan for financing college education, not saving enough, or retiring too early. These can usually be corrected, albeit with some pain, in order to get back on course.

The financial mistakes that I consider most egregious are those that occur due to willful blindness — like not drafting a will or not purchasing sufficient life insurance to protect a family. These are issues that cannot be corrected once you are gone — so not attending to them is essentially an irrevocable mistake.

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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