Financial mistakes are something most people deal with at one point or another in their life.  The celebrated American novelist Ernest Hemingway went bankrupt once during his career. When he was asked how it happened, he said, “Slowly at first, and then quickly.” We all know of other celebrity bankruptcies, and if financial calamity can happen to them, it can certainly happen to us. As a result, we have decided to list the five worst financial mistakes a person can make in the hope that reading about them can help you avoid living through any of them.

Below are five financial mistakes you want to avoid

Taking On Too Much Student Loan Debt   

Student loan debt is the only form of debt in America that cannot be discharged in bankruptcy. While it has been received wisdom that students should try to attend the highest-tier university they can get into, this wisdom needs to be reassessed. College graduates are now carrying over $1 trillion in student loan debt, and for many, the incomes they are receiving are not sufficient to support their loan payments.  This is one financial mistake that will costs graduates thousands and thousands.

Solutions include focusing on your grades and SAT scores in order to increase your chances for a scholarship, working part-time, and going to a state university. The alternative might be a heavy load of debt that can follow you around for a lifetime, delaying such life choices as home buying, and even marriage.

Buying Too Much House

In our 30s, the biggest financial issue will usually revolve around home buying. Most new homeowners don’t realize that the average mortgage only lasts for seven years. We are a fairly mobile society.

The era of steadily rising home prices is likely at an end for the foreseeable future, so home buyers should really consider going with a starter home.  Take the time to work up to a larger home and avoid the financial mistake of taking on a mortgage you can’t afford.

Not Pursuing Other Income Opportunities

Many people tend to get comfortable once they find an acceptable job.  This would be a financial mistake.   The best time to look for a job is when you have one, not after you’ve lost one. Another way to look at it is – it’s harder to hit a moving target. While you may be comfortable now, sticking with a job that is just “okay” will lead to a narrow skill set and your resume looking dated.  Don’t wait for the next crisis.

Carrying Any Substantial Credit Card Debt

Credit cards should be used to build credit, reap rewards benefits and get cash back.  Most of us would not accept an interest rate of 15% to 22% a car loan or mortgage, and we shouldn’t be paying off any other debt at such a high rate either. The proper use of credit cards is to build credit history in order to raise your credit scores, and of course to take advantage of those wonderful points, cash back, and rewards benefits that they offer. Actually using credit cards for credit, however, is a big mistake, except in rare emergencies.

Co-Signing A Loan

This financial mistake usually occurs later in life, when our young adult children politely ask for our signature as a backstop to their new credit adventures. No one wants to say “no” to their children, but if their income and credit history isn’t strong enough to support the borrowing they have in mind, simply saying “no” may ultimately be the kindest stance to take. If it turns out that your young adult children really weren’t quite ready to support that debt, no one will feel guiltier than they over imposing that burden on you. Better to decline in the beginning, and avoid a worse result later. The lesson may be just what your children need to learn patience, deferred gratification, and financial discipline.

Avoiding these major financial mistakes will allow you to retain thousands, or even tens of thousands, of dollars that would otherwise be lost through the unwise use of credit. Borrowing is a critical tool that can lift up businesses and careers, but only if used carefully and wisely.