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Someone asked me the other day what makes me qualified to give advice on money matters.

I replied that I have seen a lot of people make some simple money mistakes. In most cases, poor decisions are because of personal stress and not understanding the consequences of our actions.

Here are some of the most common mistakes I have seen people make when it comes to dealing with their financial situations:

> Not talking to your spouse and family. When situations change or financial decisions have to be made, talk to everyone that is going to be affected by your decision. Buying a new car, losing or quitting a job, reductions in household income affect everyone. Get everyone involved so you are all on the same page.

> Living off credit. Many people think they are doing OK without a budget, but use their credit cards for gas, clothes, and groceries. Over a period of time they start to realize they don’t have control of their finances and have created a great deal of debt and the monthly payments they become unmanageable.

> Cashing in 401(k) or IRAs. Most people don’t consider the tax consequences when they cash out their retirement savings. In most cases they incur an early withdrawal penalty of usually 10 percent or more and they will have to pay state and federal taxes of between 25-40 percent. This greatly reduces the net cash available to them.

> Not reading documents. Before you sign any document or agreement, READ and UNDERSTAND IT. By signing a document you have become legally responsible. Whether it is a rental or lease agreement on an apartment, a car loan or lease, or a mortgage, if you have any questions you should be asking them before you sign.

> Not responding to legal papers. If you get served a summons, don’t ignore it. Read it and respond. Most of the time by not responding you are giving up your rights to appeal or have your side of the story heard. By not being there or not responding you accept the default, which might include excessive fees and charges.

> Thinking things are going to get better. If you get laid off and think things are only temporary, you need to adjust your standard of living and habits quickly and not wait for them to get better. When things turn around you can make the adjustments back, but learn from your misfortunes.

> Not talking to the people you owe money to. If your financial situation changes, you need to talk to the people you owe money to. Let them know what your situation is and see if they can help restructure the debt.

> Missing a payment. Paying a bill a few days can make a big difference on your credit score because timely payments are a major factor credit bureaus take into consideration when determining your credit score. A lower score means it will make it harder for you to get a loan, extend credit or receive a good interest rate on future credit transactions.

Make your money choices carefully.