As I constructed my reading list this week, I must say that there was one article that I thought deserved a bit more attention. Kudos to The Sun’s Financial Diary and Free Money Finance for bringing to light one of the single most important personal finance articles you should read, at least in my opinion (this was published in Consumer Reports). I often see those posts detailing “money mistakes” that people make and I even joined in at one point with my own list. But from the Consumer Reports article, you’ll find a doozy of a list that details the 12 biggest money mistakes that could cost you a tremendous amount of money — altogether adding up to $1,000,000 or more!

Oh yeah, even when everyone says that the small things add up, they don’t compare to how quickly your money gets drained when you find yourself in situations that can cost you in a HUGE way. The list was ranked and I was somewhat surprised at some of the results. Here’s a quick ranking for you based on cost:

#1 Investing for your retirement way too conservatively. Cost: $360,000 to $750,000.
#2 Retiring before you need to. Cost: $237,000 to $309,000.
#3 Launching a divorce war. Cost: $49,000 to $188,000.
#4 Underinsuring your home. Cost: $16,000 to $194,000.
#5 Overpaying your mortgage. Cost: $27,000.
#6 Carrying a credit card balance. Cost: $5,000 to $23,000.
#7 Maintaining an unhealthy lifestyle. Cost: $4,600 to $42,000.
#8 Ignoring Roth accounts. Cost: $9,000 to $26,000.
#9 Cashing out your 401k. Cost: $6,000 to $17,000.
#10 Underfunding your 401k. Cost: $36,000.
#11 Paying needless fund fees. Cost: $4,000
#12 Falling for a scam. Cost: $100 to You-name-it.

Okay, so does this mean I shouldn’t quit my job to “retire” so early? Not necessarily, since I plan to replace my corporate income with business income as I move forward with my plan to exit the 9-to-5 workforce.

Personal Finance Reads

  • The Simple Dollar: Trent discusses his own coupon clipping strategy that makes the effort of collecting them worth your while. I do use grocery coupons though on a limited basis and if it happens to be convenient.

  • Money, Matter and More Musings: Why are passport photo services so expensive for the value they offer? It’s been a while since I got my passport photo taken but this story sure makes it seem worse than the chore that it is.

  • Lazy Man and Money: Woah! Looks like Lazy Man is facing an unexpected expense. I found his dilemma rather interesting as it relates to the unspoken agreement among friends and family about “what seems fair” and what is the appropriate behavior on certain events and occasions.

  • Money Smart Life: How about pocketing some extra money this year? Here are a few suggestions how!

  • Gen X Finance: After reading about the “401K Debit Card”, I agree wholeheartedly with Jeremy that it’s the worst idea ever. I must say that the combination of the words “401K” with “debit” makes me cringe. What a crazy idea — doesn’t this defeat the purpose of having and saving for a 401K?!

  • Mighty Bargain Hunter: I loved MBHunter’s story about the assistant principal of his school and how generous she was to her students. It makes me all warm and fuzzy to hear that after all these years, MBHunter still remembers her kind gestures. What an inspiring lady she is to have made an impact on him, enough to make him write about it. :)

  • No Credit Needed: Here are three ways to become debt free, and all it takes is some reflection. NCN suggests that you become informed, that you be honest with yourself and that you stay focused.

  • Consumerism Commentary: The best way to save is making it as painless and as convenient as possible. Few things seem as sweet as finding “lost” money and a nest egg that have built up over time.

  • Five Cent Nickel: Uhh…. My feeling is that Nickel was just too nice to his cabbie.

Additional Readings Around The Web

Announcements and Acknowledgements

My thanks to the following sites and blogs for involving me in their roundups, guest posts and contests!

My latest blog entry has been published at the Prosper Blog: Reviewing Common Investing Mistakes: Why Aren’t We Making Money In The Market?

My Peer To Peer Lending post made it to Donna’s Smart Spending blog this week.

Will from Wise Bread has announced the winners of their “New Wise Bread Forum” contest and several of The Digerati Life readers here have won! Congratulations to The Honest Dollar, rolltimer, Mrs. Micah, anitra and Pinoy Smart Blogger. :) On top of that, Will has informed me of a couple of other promotions they are holding for their incredibly supportive readers:

Wise Bread has started sharing their advertising revenue with their forum readers.
Their general $20 giveaway will be continued until the end of the January.

Thank you to Wise Bread for all these prizes!

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