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5 scariest things you can do with your money

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Halloween is fast approaching, and the haunted nature of the season also extends to your financial life. Here to help us with our financial fears and scary financial behavior is Ross Kenneth Urken, TheStreet’s personal finance editor.

Fear is definitely the operative word here. People are spooked by their money habits. A GoBankingRates survey revealed a third of Americans “are worried all the time about money.” In that same study when describing their biggest fears, participants ranked “living paycheck to paycheck,” “falling into serious debt,” and “becoming homeless” as scarier than “snakes, spiders and other creepy crawlies” and “being the victim of a horrible crime.”

That’s very telling when you’re more afraid of not paying your credit card bill than, say, a tarantula. Money triggers something deep in people’s psychology. In another eye-opening study, Sun Trust Bank asked which Halloween characters folks identified with their financial frights. 19% said ghosts, because unexpected expenses keep making their savings disappear. 19% said vampires, because just paying the bills seems to suck the life out of their paychecks. And 8.5% said skeletons, because excessive spending habits are killing them financially.

But sometimes people’s fears don’t necessarily match up with most horrifying for their financial lives. We have five chilling mistakes consumers make and antidotes for each.

5: Waiting too long to save for retirement.
It’s bloodcurdling to think that people aren’t taking advantage of the compound interest over a long time horizon. The solution? They need to start contributing to their 401(k) right when they get their first job up to the company match.

4: Carrying a large balance on your credit card.
Credit card debt is hair-raising, because it will eventually create obstacles when making a down payment on a house or vehicle by hurting your credit score. Curb that behavior by putting the credit card away and hiking those monthly card payments.

3: Social Security mistakes.
Taking benefits before the full retirement age — typically 66 — can result in a permanent reduction of as much as 25% of your benefits. What’s the solution? There’s a big bonus for delaying your claim beyond your full retirement age — your benefits will grow by as much as 8% a year from your full retirement age up until age 70.

2: Impulse clicking. The online shopping phantom, right?
Impulse clicking can really creep up if you’re not careful. It’s easy to get caught up in the online frenzy when you see coupon codes and the phrase flash-sale across your screen. But online shopping can really be detrimental to your bank account. Instead, fight back: if you have a tendency to click before thinking, don’t keep your credit card on file. Unsubscribe to all those store emails and be mindful of extra shipping charges.

1: Not filing a tax return.
You will get caught. The penalties are an absolutely ghoulish – 5% of the tax owed per month, a 4.5% failure-to-file penalty, and a 0.5% failure-to-pay penalty, which can eventually add up to 47.5% of the tax — a 22.5% limit for failure-to-file and 25% limit for late payment. What most people don’t realize is that the IRS will file a return for you based on the information they have, such as a W2 and/or 1099. It will be the least favorable return possible for the taxpayer as it will not take advantage of available deductions or credits for which they may be entitled. Even if you can’t pay your taxes, file a return.