Avoid these 9 Scary Money Mistakes

With Halloween just around the corner, we help take the "scary" out of money and investing. Working to avoid these nine money mistakes could help improve your financial future. Treat yourself now!

No matter if you want to dress up like Barbie and Ken, an F1 driver, or Spider-Man, it's useful to plan and get your costume early. If you wait until the end of October to start shopping, you could be disappointed with the slim pickings left in the costume aisle.

It's the same with your money. You can help prevent future disappointment if you create a financial plan based on your goals. A financial plan is like a roadmap that helps guide you to your destination. Review your plan each year and update it as your life circumstances change.

If you wait until the end of the night to start trick-or-treating, all the good candy could be gone, and you may be disappointed in your stash. Likewise, if you wait too long to start saving and investing, you may be disappointed in your money stash later in life. Pay yourself first!

When you're trick-or-treating, if you collect only one type of chocolate bar, you might quickly tire of eating that candy. In the markets, if you don't diversify across and within different asset classes by owning a variety of stocks and bonds, you could set yourself up for a big hit if your chosen investment falters. Diversification helps spread your risk by adding differing types of investments to your portfolio that aren't likely to go up or down at the same time.

My parents had six children, and they were not buying six costumes each year. Many years, we made homemade costumes out of things we already had. It's the same in investing: watch your costs.

It's a good idea to look at the expense ratio of any fund before you buy. An expense ratio is the percentage of fund assets taken out annually to cover fund expenses. For example, if you invest $10,000 in an exchange traded fund (ETF) with a 0.25% expense ratio, you'll pay about $25 per year in expenses. There are actively managed funds with expense ratios as high as 3.00%, 4.00%, or even 6.00%. With a 3.00% expense ratio, you'll pay about $300 a year in expenses on the same $10,000 investment. A small difference in annual expenses can add up over time.

Taxes matter too. Minimizing taxes can help maximize your investing returns. For example, when it comes to saving for retirement, IRAs are vehicles that can help you build wealth and potentially get tax breaks, either up front or in the future. Pay attention to your net returns.

At the end of Halloween night, my friends and I used to compare our stashes and make trades. If I had too many chocolate bars, I might make trades for lollipops or gummy bears to balance out my candy stash.

Rebalancing your portfolio is a similar concept and can be important to help you achieve long-term investing success. As the markets rise and fall, the investments in your portfolio will grow and shrink in value, and over time, your portfolio could become either less or more aggressive than you intended.

When you rebalance, you sell positions that have grown and become overweight in relation to the rest of your portfolio and move the proceeds to positions that have become underweight. This allows you to bring your portfolio back to its original target allocation. It's a good idea to do this at least once a year.

As a kid, we used to zig-zag around the neighborhood to hit the houses we thought had the best candy first. But sometimes a family moved or had their porch lights turned off that year. This wasn't an efficient way to trick-or-treat. It took more effort and didn't produce the results we hoped for.

It's a similar idea in investing. Let's say you get a bonus at work or an income tax refund. You're not sure whether to invest now or wait for better market conditions. Timing the market is nearly impossible. Instead, time in the market is key. A realistic strategy for most people is to skip trying to time the market: Instead, consider making a plan and investing as soon as possible.

Every year around Halloween, the same old myths and rumors pop up with warnings about tainted candy that can send shivers down your spine. While it's important to practice common-sense safety measures, don't react emotionally to everything you read. It's the same with investing. Markets do fluctuate, and that's okay. Ignore the noise and stay focused on your plan.

My parents always talked to us about staying safe at Halloween: "Go with a group, and only take candy in wrappers," they'd say. In life, your emergency fund can help keep you safe, so you don't need to dip into long-term investments or borrow at high interest rates when you need cash in a hurry. If you don't have enough savings built up to cover three to six months of essential living expenses, consider funneling extra money toward this goal now.

On Halloween night, if you eat all your candy at once, you'll end up with a bad stomachache. The same is true when it comes to your spending. Sure, it might feel good to get your paycheck on a Friday and go on a spending spree without thinking about the future. But then, you might create a financial stomachache that could take the form of not having the money you need to help with your kid's college goals or to fund your retirement expenses. If you don't have one, create a monthly spending plan so you can be intentional in how you save and spend your hard-earned cash.

Treat yourself this Halloween! Check in on your financial goals from the start of the year. Taking care of your financial life doesn't have to be scary or drudgery. It can be just as thrilling as preparing for Halloween. Have fun dreaming about your future goals, then start taking the financial steps you need to help make that future become a reality!