Wealth Defense: The Biggest Threat to Your Money

What's one of the most ruinous and underrated things that can rob you of money over your lifetime? Neglect.

You know what I'm talking about. Picture this scene: You're at your 6-year-old's soccer game, chasing your 3-year-old out onto the field. Your boss calls your cell phone with an emergency complaint from a client, and in the middle of this crisis, your mom tries to break in on call-waiting to complain -- again -- about your sister's boyfriend. Meanwhile, in the back of your head, a little voice asks: "Should I have refinanced my home mortgage to get a lower rate?"

You're busy -- really busy. I'm sure you don't have hours to set up a financial filing system in neat, coordinated folders. You probably don't have time to review your homeowners' insurance or auto insurance regularly. You consider it a pretty good achievement that you managed to check the performance of your 401(k) funds this year.

You know you should do more, and you might not realize how much your financial neglect may cost you. Compared with your average evil financial villain, neglect just isn't that sexy. It doesn't sound nearly as terrible as a housing bust or a market crash. You don't find any statistics measuring its effects month after month, like inflation. It doesn't even wear a mask or a cape.

But it costs you plenty. Here are some common things we forget to do anything about:

• That $5,000 you have sitting in a savings account that doesn't pay interest? Plunk it in a CD paying 5% interest, and you've just made an extra $250 this year.
• Those bank fees you're paying every month because you haven't taken the time to switch to a free checking account? They could be sapping your wallet to the tune of $25 to $100 or more every month.
• Been meaning to take a look at those credit reports? Identity theft could cost you an average $422, according to a survey the Better Business Bureau released last year.
• Have a chunk of change sitting in your brokerage account ready for investment in a Roth IRA, where it can grow tax free? Leave $1,000 in that taxable account for 10 years and it'll cost you $641 in taxes and lost earnings (assuming the market keeps up its average annual 10.5% return and you're in the 28% bracket).
• Has "write a will" been on your list for a few years now? According to AARP, probate costs can eat 5% of your estate. On an estate worth $800,000, that comes to $40,000.

I borrowed those last two examples from the Motley Fool Green Light newsletter, which promises you at least $450 worth of money-saving ideas in each issue. Not bad for a service that you can look at free for 30 days. This month's ideas add up to a whopping $1,117 -- all you have to do is find the time to get it done.

So make the time. Get a babysitter, or send the kids to the park for the afternoon with Dad. Hire a neighborhood teenager to mow the lawn. Turn off your cell phone for the afternoon. Order groceries online and have them delivered. Do whatever it takes to carve out a free hour or two once a month, even if it costs you a little bit of money to free up a few hours. Your investment will pay you in cash dividends.