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4 Money Mistakes You Don't Want to Make

Money mistakes. We all make them. And they're even harder to overcome with the continuing time crunch of work, family, friends and the other ever-present activities of life.

Who can stay focused on money matters these days? Not many. Recently I spoke to a group of employees at Lowe's, the home-improvement retailer, and I asked, "How many of you feel you don't have the time to deal with money?" Nearly every hand went up.

According to a Charles Schwab survey, 29% of men and 20% of women said they make money mistakes.

Of course, mistakes can run the gamut, and some are bigger than others. Let's take a look at some of the more common ones and how to overcome them:

Mistake No. 1: Assuming You Don't Have the Time

We all say we don't have time. And I agree we don't have lots of extra time to fit in everything we want and need to do. Work, family, kids — it never ends. But if you work at it a bit, it isn't hopeless. You do have the time; you just have to get creative.

What can you do? How about this: put it on the calendar. As Chris Ahearn, vice president of corporate communications for Lowe's, said, "I have to schedule fun into my calendar." So why shouldn't all of us think about scheduling money management into our lives?

Whether it's carving out an hour on a Saturday morning to pay the bills or revisit your investments, consider putting it onto the calendar just like taking your daughter to Girl Scouts or heading to the gym. LearnVest.com, a site geared to women, provides email reminders of next steps to help busy women accomplish key financial goals. And BillGuard.com is a new site that can save you time trying to keep track of any fraudulent charges on your credit or debit cards.

Or, try a financial date. An outing with your partner or a friend can help keep you on track with financial and others goals (and you'll get a nice meal out of it, too). If we don't take the time today, we'll be kicking ourselves — and having fewer nice dinners — later.

Mistake No. 2: Dismissing Budgets Because They Are Tedious

The word "budget" makes a lot of people cringe. Are you really going to track every Starbucks or Krispy Kreme? Are you going to manage every penny you earn and every expenditure against some kind of limit or list? No, the truth is that you really don't have to. I'm not saying to ignore what you spend, but with a few simple rules, you can get the job done without spending a lot of time.

Consider using just one credit card to make it easier to track what you spend, not to mention identifying fraud and maximizing those reward points.

Also, remember those allowances you used to get as a kid? "They're still appropriate, and guess what? They're appropriate for any family member — you, your spouse, your kids — for what you can spend each month," said Peter Sander, author of "The Pocket Idiot's Guide to Living on a Budget."

"It doesn't matter what it's for — clothing, looking good, dining out or for just plain fun," he said. "You also get another pocket-money allowance for that little stuff — sodas, lattes and whatever — so you don't have to track these items to the penny. No $1.54 receipts to track and add up at the end of the month. Makes it all much easier."

According to Sander, a simple spreadsheet is one of the best ways to set up a budget. The key word is "simple." Online tools that can help include Mint.com, Mvelopes.com, and BudgetTracker.com.

Sander is also a big proponent of giving people rewards for "doing good" on budgets. A gift card, a treat, even a special family vacation if you do good enough for long enough. Remember, rewards motivate people.

Finally, if you think these practices are only for people on limited incomes, think again. The principles and practices apply to any income level — it's just that the numbers are bigger.

Mistake No. 3: Stashing Cash for No Return

You've heard it before — stash your cash for a rainy day. Create a rainy day fund to help you out if you lose a job, need expensive dental work, or to just plain handle the unexpected. We all agree that having at least six months of your average earnings set aside is a great idea.

Problem is, with today's microscopic interest rates — and realize that many banks, once fees are included, are actually charging you to keep money there — you may end up earning nothing, or even negative returns on those hard-earned assets, especially after inflation.

I don't like negative returns, and neither should you. I also don't want to put this money at risk, but a little risk might be OK to get these funds — and other funds beyond the rainy day fund — working for you. I think it's time to consider buying at least some dividend-paying stocks.

There are lots of blue-chip companies paying 2%, 3%, even 4% yields. Companies like Heinz and Kimberly-Clark, steady-eddies that aren't going anywhere. If you want more diversification, you can also get high yields owning a basket of stocks using an exchange traded fund like the SPDR S&P Dividend ETF (NYSE: SDY - News), which holds 61 dividend-paying stocks and yields 3.4% at current prices.

I'm not saying to put all your eggs in one of these baskets, but a few eggs here and there is a good idea.

Mistake No. 4: Assuming You're Fully Insured

So you have life, homeowner's and even car insurance? Would you believe that for most of your working life, you're more than twice as likely to need disability than you are life insurance?

Most people ignore this very real risk, but I was reminded as I met Bonnie St. John, a Silver and Bronze medalist in downhill skiing in the Paralympics whose leg was amputated at age five. There she was, right in front of me, overcoming her disability. But can you overcome a disability? One that prevents you from working in your job or profession?

Most people ignore this very real risk, or assume Social Security or someone else will cover it. They might, but Social Security has certain qualifications and perhaps not enough payout while company disability policies generally fall short. The fact is, you're two to three times as likely to have a disability claim as a claim against life insurance, yet so many more of us carry life insurance without adjoining disability protection. So, envision what could happen if you become disabled and protect yourself accordingly.

I know you can't spend a quarter of your working day managing money, but if you make a little time around the edges and avoid some of the most common pitfalls, you're bound to come out ahead.

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