There needs to be a better way to teach everyone how to avoid the top 5 money mistakes that are made in life. School can be a great way to prepare for a career but it often falls woefully short in preparing people for life. For adults, they usually learn these mistakes from the school of hard knocks and young people need to learn as soon as they can.

First, earning 1% interest on your savings while paying 15% interest on your credit cards is one of the worst money mistakes you can make. If you have extra money you should pay down your debt. If you do have a need to use a credit card just make sure to pay off the balance in full each month to avoid paying interest. Now, there is one exception, if there is even the slightest chance you may lose your job you want to hold on to as much cash as you can.

If your employer offers a 401K or another retirement plan, and you are not participating this is the second biggest money mistake you need to be aware of. This is really a bad move if they offer matching funds to the plan — which means you are refusing free money. Free money is good and so are the tax deductions you can take by being part of your employer’s plan.

The third money mistake most make is not having a goal. Whether you are sitting in your car or standing at the airport, you would never start a trip without a destination in mind. Always have specific goals both short and long term. By establishing goals you will get to where you want to go that way.

This leads to the fourth mistake which is not having a spending plan, or also known as a budget. A plan that includes what you intend to spend on things, such as entertainment, food, housing, etc., vs. what you actually spend allows you to fine-tune your finances and find places to save. Tracking your money is crucial to knowing where your funds are going and how you are doing financially.

The final money mistake many people will make is to finance things that will go down in value. Now obviously you will need to borrow money from a lending institution sometimes because it is not always easy to pay cash items such as a car, upfront. But you want to keep this type of borrowing to an absolute minimum. The point is that unless the math works out, the less you borrow, the better. Just remember it is always better to earn interest than to pay it.

This is just a highlight of the top money mistakes to avoid, but we bet there are plenty of things that you could add. So do your homework when it comes to your money and you will be happy to see how smart you can be when it comes to the money you put back into your pocket.