Money mistakes we make

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By Jim Carr By Jim Carr

PHOENIX -- Owning a home may be a dream for many, but it could be a financial disaster if you bite off more than you can chew.

Consumer advocates at say overspending on a home is one of the biggest financial blunders you can make, and the past housing crises kind of proved that point.

A good rule of thumb: One-third of your monthly income should be on housing. No more.

But if you have student loans, child care and other expenses, you should be spending a lot less.

Another money mistake is failing to negotiate prices.

I'm not talking about just car prices; I'm talking about retail stores.

Experts will tell you that big retailers will slightly reduce prices or throw something in for free just for asking, but Americans do not do this.

Trying to beat the market is another mistake.

Steady investment into your 401-K during the rough and good times is the only way to go, so don't pull back when the market sours.

And, finally, counting on Social Security is a mistake.

Experts say if we keep the current spending habits, Social Security will be out of money in the next 25 years.
Back to housing: It was recommended that you spend no more than one-third of your gross monthly income, but you might be better off staying on the conservative side and spending just 25 percent.  That should leave you some breathing room.