Spending traps can interfere with your long-term financial goals. 

by: Kimberly Palmer

It’s hard to make smart money choices all the time, but at​ the very least, you can avoid some all-too-common – and expensive – errors. Whether it’s budgeting by the month, instead of the year, or forgetting to save for future emergencies, these mistakes can mess with your finances unless you take steps to correct them. Here are 11 blunders almost everyone makes and how to stop yourself from falling into the same trap:

1. Budgeting for the short term.

Research suggests that creating an annual vs. monthly budget works best, ​largely because we feel less confident in our annual estimates, so we tend to add more cushioning for unexpected expenses. In ​a 2008 study, college students underestimated their monthly expenses by 40 percent but overestimated their annual expenses by 3 percent.

2. Overspending on housing.

I’s almost impossible to get ahead financially unless you save a significant chunk of your income – ideally $1 of every $3 you earn. But many people get tripped up by their housing costs. Traditionally, financial advisors have encouraged buyers to spend about one-third of their income on housing. But for many people, especially anyone with student loan debts, child care payments or other hefty expenses, that’s too much money.

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