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5 Celebrity Money Mistakes

There’s never a dull moment when you’re a celebrity. Headlines are quick to point out their imperfections, including some of their financial mishaps. Here’s a look at five famous financial faux pas and the lessons learned.

Excessive Spending

Sir Elton John has reportedly battled with “excessive” spending, including blowing an obsessive $400,000 a month on flower arrangements. For other stars, such as rap singer MC Hammer and actor Stephen Baldwin, massive overspending has led to bankruptcy.

Also See: 5 Signs You May Be Broke in 10 Years

And according to Sports Illustrated, sports stars also struggle with money management. After retiring for just two years, three out of four former NFL players have gone bankrupt or are under financial stress. Presidents, too: Thomas Jefferson’s spending sprees led to bankruptcy more than once.

Lending to Friends and Family

It’s not just the rich and famous who run fast and loose with their money. Friends and family do, too. Just ask Oscar-winning actor Richard Dreyfuss who, just last year, sued his dad and uncle over a family loan gone awry. The star wants them to repay a nearly $900,000 loan used to buy an office building in Los Angeles.

Also See: How to Get Your Friends to Pay You Back

Trusting the Wrong “Experts”

This brings us to yet another celebrity money mistake: Blindly trusting others with your money. Kevin Bacon, Uma Thurman, Leonardo DiCaprio and Matt Damon are among the celebrities who have fallen prey to financial fraudsters. They lost millions to those disguised as trustworthy and exclusive advisors.

The lesson? Nobody cares more about your money than you. Do your due diligence before handing over your finances to a so-called “professional” — even if they come highly recommended.

Tax Evasion

This next Hollywood star reminds us of why we should never fail to pay the taxman. Wesley Snipes is close to wrapping up a three-year prison sentence for tax evasion in house arrest. The "White Men Can’t Jump" star was convicted for failing to file returns from 1999 to 2004, when he reportedly earned close to $38 million.

Country singer Willie Nelson also dodged Uncle Sam and owed more than $16 million in back taxes. He eventually settled the debt after selling most of his assets.

Also See: 5 of the Biggest Celebrity Tax Evaders

Keep in mind, while you can always file an extension, if you think you owe, always get that IRS check in the mail by April 15 to avoid penalties.

No Prenuptial Agreement

Given the high rate of Hollywood divorce, you’d think more red carpet couples would protect their assets and sign a prenup before matrimony. This was an expensive lesson learned by Mel Gibson. Splitting from his wife Robyn in 2008 cost the Aussie actor almost half a billion dollars for lack of a pre-nuptial agreement. Under California state law, without a separate legal agreement in place, assets are generally split 50/50 in divorce.

The list of celeb money mistakes goes on. What others can you think of? Connect with me on Twitter @Farnoosh and use the hashtag #finfit.

YAHOO! FINANCE EDITOR'S NOTE: A previous version of this article incorrectly stated that the musician Elton John had filed for bankruptcy in 2002. Although that claim circulates widely on the Web, we have since learned that it is false. We regret the error.

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