Money is something we humans are hard wired to mess up. Most of us are destined to make several big money mistakes in the course of our busy lives. Do you want to know what you need to stop doing? Here, based on my experiences as an advisor, are the top 5 ways we mess up with money.

1. Spending on big impulse purchases like a brand new car instead of saving the money. What’s really more important to you, that new car smell or a comfortable retirement? Don’t fall prey to lifestyle creep where more income is matched with higher expenses such as second homes and bigger cars. This is why budgeting and sticking to a savings plan is so important.

2. Taking out expensive loans carelessly so as to fund expensive ‘stuff’ that you don’t really need. And then not paying off these expensive loans as soon as you are able to. Get into the habit of taking your time and making level-headed, rational decisions – don’t let your brain mess with your money!

3. Keeping too much cash in the bank and therefore allowing inflation to eat away at your hard-earned money. Instead, invest early and often. It’s the only proven way to beat inflation over time. We should start investing as early as possible, keep investing our surplus cash and stay invested.

4. Not getting to grips with pensions. The tax relief is the only free money the government gives us – and all because they know we’re rubbish with money. I know pensions are complicated but try to get past the jargon and make sure you’re not thoughtlessly saying no to the best financial deal of your life.

5. Not setting financial goals. Think seriously about what kind of working life you want, and what kind of retirement life you want. But don’t stop there. Set realistic, measurable goals and make sure you make specific financial plans with those goals in mind.

The problem with fixing these bad habits is that much of them are not the result of conscious decisions. You can cut them out by thinking slowly and carefully over money decisions and trying to think about long term results rather than short term gains. Failing that, a good financial planner can be the objective voice of reason in your ear.

If you like this article, try this one: My 4 Unbreakable Rules of Investing