Financial Literacy - Growing your bottom line
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smart spending
How to shrink your bottom line

"If I could talk to a young person before they take an early withdrawal of $10,000, I could say, 'You're giving up $4,000 now (in taxes and penalties).' But that $10,000 for a 25-year old would be worth $217,245 in 40 years, assuming 8 percent growth per year," she says.

"It's a lot to lose for instant gratification now versus planning for the future," she says.

Tip: Learn more about how to wreck your chances to retire.

7. Pay lots of fees

For those with a surfeit of money, bequeathing it to charity can lighten your load. Or you could give it to a needy mutual fund company in the form of fees on your investments.

Whether you're investing in actively managed funds or index funds, fees can vary considerably. In general, the expenses on an active fund will be much more than those of an index fund.

Proponents of index funds point out that after fees and expenses, active funds usually equal or trail the returns of funds that follow an index.

"Fees are hugely important and often they get overlooked because people chase after the recent hot investments," says Tyson. "People should look for sound investments and then look for investment providers who manage fees and keep them to a minimum."

You can't control the market, but you can control the fees you pay.

Tip: Read about the folly of discounting fees in Bankrate's story on 10 ways to annihilate your portfolio.

8. Go bare, or -- inappropriately covered

Leaping into the void heedless of risk makes for a much more exciting life, and you also save on all those insurance premiums.

Disability, long-term care and life insurance policies all make expensive promises to cover unforeseen events that can drain your family's resources if they occur.

Carbonaro ranks not having enough insurance as one of the biggest money mistakes people make, right after overspending.

"It's risk management," she says. "I think they just don't know. And, of course, nobody likes to spend money on insurance," says Carbonaro.

Like wearing three jackets but no pants, many people get lots of insurance on their car and home, but neglect to investigate disability, long-term care and life insurance.

"People tend to be over-insured in some areas but under-insured in other areas. They may overlook getting long-term disability or, if they have financial dependents, they may not have adequate term life insurance," says Tyson.

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Tip: Read more about the importance of certain types of insurance in Bankrate's story on 7 common insurance mistakes.

9. Let taxes run rampant

No one enjoys paying taxes, though most people know there are perfectly good reasons for doing so. Taxes create civic improvements and pay for community services like firefighters and a police force.

Without some kind of plan to minimize taxes, you can end up paying too much of your hard-earned money to Uncle Sam.

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