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"  A few years ago, I whipped out a seldom-used department store credit card to buy my daughter a pair of $10 mittens--because, hey, I&amp;#039;d get 15 percent off! What I didn&amp;#039;t realize is that the email-only bill went to an account I rarely checked. When I finally saw it months later, I owed $50 with interest and late fees. Oops. But the real kicker was that the overdue bill dinged my credit score right when my husband and I were applying for a home loan, disqualifying us from the best mortgage rates. In other words, I&amp;#039;ll be paying for those mittens for the next 30 years. They are now $9,000 mittens. I definitely learned something from my goof (I now carry one credit card). I also take comfort in knowing that I&amp;#039;m not alone in flushing money down the toilet: According to a recent study, two thirds of middle-class Americans admit to having made at least one serious financial screwup. The average price of those bad calls? An excruciating $23,000. But there&amp;#039;s no need for your lessons to be so costly. We convinced six women from across the country to &amp;#039;fess up to their biggest financial flubs. Their stories will teach you what not to do with your money. &amp;quot;I blew a windfall&amp;quot;--Karen Parker*, 29, Albuquerque, NM Price tag: $100,000  &amp;quot;When my grandparents willed me $250,000, I thought it would finally let me realize my dreams. I was going to quit my job and become a writer--but my husband was totally against it. I wanted to go to Europe, but he hated to travel. Since the only thing we could agree on was making a big down payment on a new house, I stuck the $100,000 that was left over in our joint checking account. I figured we wouldn&amp;#039;t touch it, but we used it on dumb stuff: taking friends out for drinks, buying a truck we didn&amp;#039;t need. I was in denial until, two years later, I opened a bank statement that said we had $8,000 left. Of all that cash, I really didn&amp;#039;t do anything to move forward, unless you count the $3,000 I spent to hire a divorce attorney. When I think about how much money is gone, it makes me sick.&amp;quot; Prevention: Make a jackpot plan. Easy come, easy go, right? Yes--unless you create a blueprint. A simple approach to a big bonus, inheritance, or home-sale profit--or, while we&amp;#039;re dreaming, a Power ball payout--is to divvy it into thirds. The first chunk goes to catch up where you&amp;#039;ve fallen behind, like paying off debt or saving for your kids&amp;#039; college costs. Another third funds future plans, like retirement or a house down payment. The last third you get to spend on stuff you want now (woo hoo!). &amp;quot;Create meaningful events,&amp;quot; Vaz-Oxlade says. Take a dream vacation or fly to see far-flung family and you&amp;#039;ll have great memories long after the cash is gone.  &amp;quot;I ignored the IRS&amp;quot; --Michelle Fernandez, 40, Rockville, MD Price tag: $5,000  &amp;quot;Post-college, I wasn&amp;#039;t earning very much. So when I did my federal taxes one year--last minute, of course--and discovered I owed $300 that I didn&amp;#039;t have, I panicked and didn&amp;#039;t file. Then the next year, I tried to send in my taxes electronically, but TurboTax asked me for the previous year&amp;#039;s figures--so I didn&amp;#039;t file again. I figured, since my employer was withholding taxes, I was still paying and it couldn&amp;#039;t be that bad, right? Wrong. A few years later, when the IRS finally caught up with me, they wanted interest and penalties totaling $12,000--and my state tax department thought they deserved a chunk too. Only after hiring two accountants and a tax lawyer did I get it straightened out--and I was very lucky I didn&amp;#039;t pay more.&amp;quot; Prevention: Pay up, fast. &amp;quot;It&amp;#039;s always better to come forward than to have the IRS find you,&amp;quot; says Barbara Weltman, an attorney and a contributing editor to J.K. Lasser&amp;#039;s Your Income Tax 2013. And some states will waive penalties for rogue taxpayers through amnesty and voluntary disclosure programs, but only if you offer the info before they contact you. Yes, you&amp;#039;ll get slapped, but the cost might not be that high, and it&amp;#039;s not as hard as you think to straighten things out. The IRS.gov website spells out some options for those short on cash, including payment by credit card, installment plans, even negotiation--all of which are a much better bet than sticking your head in the sand. Because, believe us, ignoring the IRS will not make them go away.   &amp;quot;I invested in a new business--and got scammed&amp;quot; --Tiffany Aliche, 33, Newark, NJ Price tag: $35,000 &amp;quot;A wealthy friend told me he wanted to start exporting luxury goods to Europe. He promised that if I invested $25,000 with him, I&amp;#039;d make a return of $2,000 a week for two years--which is crazy, but at the time I was like, &amp;#039;I&amp;#039;m totally going to be rich!&amp;#039; I took out cash advances on three new credit cards to get the money. As I was handing him the wad of bills, something inside me was screaming, &amp;#039;Don&amp;#039;t do it!&amp;#039; but it was too late. You can guess how this ends: I never saw that money again. He simply didn&amp;#039;t try very hard to get the business off the ground, and since it was an &amp;#039;investment&amp;#039; and not a loan, he didn&amp;#039;t owe me a dime. My $25,000 credit card debt ballooned into $35,000. I was so broke I had to move in with my parents. I eventually bounced back, but thinking about how naive I was still makes me cringe.&amp;quot; Prevention: Do your homework before you invest. Ask a lot of questions. First off: Who&amp;#039;s in charge, and who else is investing? What&amp;#039;s the company&amp;#039;s business plan for earning, spending, and marketing? What happens if it fails? What&amp;#039;s the expected return on investment? &amp;quot;If it seems too good to be true, it probably is,&amp;quot; says Jennefer Walsh, a certified financial planner and the president of Walsh Financial Solutions in Golden, CO. (A realistic rate to hope for, according to her, is a 3 to 10 percent return a year--and not immediately.) But investing in a small business is risky enough that most experts don&amp;#039;t recommend it for newbies. A smarter option: Consider buying shares in a plain-vanilla low-fee mutual fund, like Vanguard&amp;#039;s Total Stock Market. You&amp;#039;ll get more reliable returns, and if friends come asking for capital you can say, &amp;quot;Sorry, my money&amp;#039;s all tied up in the stock market.&amp;quot;   &amp;quot;I dug a hole of credit card debt&amp;quot;--Cherie Lowe, 36, Greenwood, IN Price tag: $16,500 &amp;quot;My husband and I had always been in the habit of pulling out the plastic when we wanted something. Need new tires? Put it on the credit card. Didn&amp;#039;t save for Christmas? Put it on the credit card. After our first daughter was born, it really came to a head. With all the baby stuff we had to buy, money was spread pretty thin, but we were so stressed out that we didn&amp;#039;t want to say no to ourselves. We simply charged everything. I&amp;#039;d go to the grocery store and toss $200 worth of stuff into my cart without even thinking about it. When people hear how much debt we racked up, they think I was living like a Real Housewife. But it&amp;#039;s more basic than that: We just didn&amp;#039;t pay attention, and before we knew it we&amp;#039;d nickel-and-dimed our way into nearly $17,000 of debt. It took us three years of concerted effort--no eating out, no vacations, learning to make my own laundry detergent--to pay off that bill.&amp;quot; Prevention: Switch off the auto-pilot. Sometimes low-tech is the way to go when tracking your spending. Make a budget, and figure out how much you can afford every month on categories such as groceries, entertainment, etc. Then subtract every credit card swipe from that goal in a spending journal. &amp;quot;If you go out and spend $74 with your girlfriends and you don&amp;#039;t write it down anywhere, you don&amp;#039;t remember it until the bill comes,&amp;quot; says Gail Vaz-Oxlade, the author of Debt-Free Forever and host of Til Debt Do Us Part on CNBC. &amp;quot;But if you deduct it out of your journal, you&amp;#039;ll know not to spend it again. It&amp;#039;s that simple.&amp;quot; (This is what our moms called &amp;quot;balancing the checkbook,&amp;quot; but if your brain hears that, it&amp;#039;ll disengage. So keep it on the down-low.) Programs like Mint.com or the iXpenseIt app ($4.99 for iOS) can make tracking less time-consuming, but a simple lined notebook works just as well.   Even the Experts Mess Up Two financial gurus talk about their dumbest moves--and what they wish they&amp;#039;d done instead. &amp;quot;I made a mess with real estate&amp;quot;--Jane Honeck, 62, Freeport, ME; CPA, financial coach, and author of The Problem With Money? It&amp;#039;s Not About the Money! Price tag: $60,000 &amp;quot;I was eight years away from paying off my house when I fell madly in love with another one nearby. Figuring the home we were living in would sell in a flash--the market was hot--my husband and I refinanced our mortgage to borrow the down payment. Then the recession hit. Our first house languished on the market for 18 months. We finally rented it, but the two mortgages ate up a big chunk of our savings, and when the real estate bubble burst, both homes lost value. I love where I live, but had I stayed put, I&amp;#039;d have no mortgage now. Instead, I own two homes and have hardly any equity in either.&amp;quot; Prevention: Browse rationally. In a choppy real estate market, magical thinking could sink you. Before you set foot in a single open house--and risk getting swept away--make firm decisions about how much you can afford to spend, what you really must have (versus just want) in a new place, and how you&amp;#039;ll handle worst-case scenarios like not being able to get out of your current house. &amp;quot;I wish I had made the purchase of the second home contingent on selling the first,&amp;quot; says Honeck. &amp;quot;It would have bought me time to sell without losing money every month.&amp;quot; Once your plan is in place, avoid setting yourself up for disappointment by only visiting homes in your price range.  &amp;quot;I was blindsided by my husband&amp;#039;s debt&amp;quot; --Ellie Kay, 50, Palmdale, CA; financial expert and author of The 60-Minute Money Workout Price tag: $40,000 &amp;quot;When we first started dating, I thought Bob was a cheapskate because he&amp;#039;d never pick up the tab for drinks or dinner when we went out with friends. Later I found out it was because he couldn&amp;#039;t: Bob had $40,000 in debt, but I didn&amp;#039;t hear a thing about it until after the wedding. I felt completely surprised and betrayed. I said, &amp;#039;Wow, when were you going to tell me?&amp;#039; His response: &amp;#039;I didn&amp;#039;t think it was important.&amp;#039; Lucky for him I was madly in love, so I was willing to sacrifice luxuries--and pull back on savings--while we dug ourselves out of his mess.&amp;quot; Prevention: Talk details with your partner. Know how you and your hubby completely dissect the latest episode of Breaking Bad every week? You need to learn to discuss your money just as often and just as thoroughly--and the earlier in your relationship you start, the better. Granted a pre-wedding do-over, &amp;quot;I would&amp;#039;ve had a date night specifically to talk about finances,&amp;quot; Kay says. &amp;quot;I would have asked Bob to bring his credit report so I could see exactly what his money situation was, including his debt, and I would have brought my own as well.&amp;quot; After you&amp;#039;re hitched, financial counseling can help couples with different styles meet in the middle. "^^<http://www.w3.org/2001/XMLSchema#string>
<http://www.redbookmag.com/life/money-career/advice/a14762/avoid-money-mistakes/>