7 money mistakes everyone should make

These money mistakes won't destroy your savings, but they will teach you a lesson about spending and saving.

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We all make mistakes. It's normal, human and important—because without mistakes, your learning is stunted. It's the missteps that provide the opportunity to own your decisions, assess your process and make corrections that will avoid the pain the next time. In a world where building resilience is so vital, making mistakes can be a very good teacher.

So here are my favorite money mistakes that will ultimately improve your decision-making:

1. Buy too much term life insurance. Not enough to ruin your budget, but more than you need. When you finally find out that you're over-insured, you will know that the impact was small—and that if you had died, your family would have had extra protection.

2. Pick a stock and buy it. Having a stake (without investing your next egg) can give you an insight into how irrational markets impact your hard earned coin. As a stockholder, you'll receive proxy notices to vote on the Board of Directors and significant shareholder items. You'll receive an Annual Report that details their financials and business performance. Even if the stock falls or the company goes bankrupt, you can learn by picking, watching, learning and deciding when or if to sell.

3. Make a donation to a qualified charity without getting a receipt. No receipt, no deduction. Oh well! Chalk this one to doing something really nice that benefited someone in need. Without any other benefit—AKA a tax deduction—to cushion the cost.

4. Overestimate your pre-tax Flexible Spending Account. So you withheld too much, didn't spend it all and you lost some money. Terrible, right? Actually, not so much. Hopefully you used up most of what you set aside. What probably happened is you didn't do your homework up front and overestimated based on a guess. Guess what? You won't make that mistake twice.

5. Load up on cable goodies. When a new cable company comes courting, it's just too good to pass up. Hey, you now have access to 52 movie channels and thousands of other shows in 12 languages. Who can resist Sponge Bob in Japanese? Best of all, it costs no more AND you get phone service, a security system and probably a slow cooker, if you push a little. When it finally sinks in that you are not receiving full value for your money, you'll make the call.

6. Join that cool new gym. After the tour of the sparkling facilities, new machines, locker room, spin studio and the Kiehl's products at the shower stations you cannot wait to sign up. Did you notice the cancellation policy or did the idea of having laundry service distract you from discovering that you signed up for a two-year commitment and the only way out is to move to Mars (provided Mars doesn't open a facility before you move there).

7. Buy the newest, hottest tech. The latest greatest devices are like crack cocaine to an addict—shiny new smart phones and tablets can be almost impossible to resist. Cellular service isn't free and the carriers have created packages (see Cable #5) to suck you in deep and keep you addicted. Know what you're actually using and whether you're paying for more than you need or premiums for over-use.

All these "mistakes" are common, everyday things that we do because we are human and are tempted by "deals" and the latest shiny gadget. No one dies in these scenarios—but allowing them to continue is not going get you any closer to being financially secure.

Next time you are faced with a financial decision, ask yourself: Have I already learned this lesson?

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This article was written by Michael F. Kay from Forbes and was licensed as an article reprint. Article copyright 3/31/2015 by Forbes.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third party provider of the reprint permission and Fidelity Investments are independent entities and not legally affiliated.
The images, graphs, tools, and videos are for illustrative purposes only.
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