No one is perfect when it comes to handling money. In fact, everyone messes up at least once. 2008 seemed to see more money mess ups than we have seen for decades. If you want to be sure to gain financial freedom eventually, you need to make sure you don’t make these money mistakes. There are the five biggest money mistakes ever made.

Mistake #1: You neglected your credit score
Your credit score matters more these days than ever before. Lenders are scared out of their minds, especially when they see the number of defaults, charge-offs and when they take a look at the credit crunch. Lenders aren’t looking to lend to medium-high risk customers anymore. Only low-risk people will be able to take advantage of loans these days. Lenders aren’t the only ones who take a look at your credit scores. Insurance companies and potential landlords look at these as well.

If you want to boost your credit score and keep it high, follow these steps:

• Pay everything on time. Set up automatic payments if you have to.
• Keep all of your balances low. You should try to use less than 30 percent of available credit.
• Try using an older card. Keep all of your credit cards active.
• If you don’t have great credit, borrow someones that goes. Add them as an authorized user on your account.
• Take care of and dispute all errors and old mistakes. Clearing up your credit report can go a long way in boost your credit score.

Mistake #2: You carry (or carried) credit card debt
The majority of Americans seem to think that it is OK to carry a balance on their credit cards from month to month. Not only do they waste a lot of money paying for interest charges, but they lower their credit score this way. Get rid of every balance you have on every credit card you use. Interest rates have skyrocketed and will continue to do so. Now is the time to cut your expenses to get those cards paid off. Talk with your lenders and see if they can put you on a program. It will be much easier to pay off your credit card balances now before your credit is completely shot.

Mistake #3: You took too big of a home loan or auto loan

Your home costs should not exceed more than 25% of your gross monthly income. Sometimes, if you don’t have any other big expenses, you can stretch that number to 30%. Transportation expenses should be kept at about 10% of your gross income. These expenses include insurance, payments, maintenance and fuel costs. Carefully set limits to the amount you can borrow for your home and/or car. Some general rules are:

• You can’t afford the house if you can’t afford a 30-year, fixed-rate mortgage.
• You can’t afford the car if you can’t put at least 20% down and get a four year loan.

Mistake #4: You used your emergency fund
It may seem like every time you try to build a savings account, you end up using it for some unexpected expense. Or, maybe you didn’t try to build an emergency fund because you had a great deal of credit available to you. Well, here is a news flash. Those days are long gone. Try to build an emergency fund that is equivalent to three months of living expenses. If you are living off of one-income, try to build a six-month emergency fund instead. In order to build that amount in your savings account, you need to start out small. You can’t expect to have a three month or six month supply by tomorrow. And, always keep your money at an insured institution.

Mistake #5: You are a sucker
You cannot be gullible when it comes to handling money. You cannot afford to:

• Agree on a loan that you can’t afford
• Take the financial advise of an investment salesperson (who are they really looking out for?)
• Fall into a get-rich-quick scheme
• Jump from one investment to another

You have to be smart and you can’t be a sucker. Set limits for yourself and for your family. Some ways to do that are:

• Live within your means
• Expect and plan for change
• Limit your borrowing (for a home, a car and for education)
• Only invest by using a long-term strategy

Make sure you don’t not every make any of these money mistakes. These mistakes are too common and can easily be avoided.