The current state of the economy and the job market have many re-assessing their financial habits and positions, as well as investments such as exchange traded funds (ETFs).

MMarquit at Credit Cards, Credit Reports and Debt Topics reports that before you can begin to correct a situation, you should first identify your biggest financial mistakes. This way you can correct them and begin fresh. There are three financial mistakes that take the cake:

  1. Unnecessary Spending: A splurge here and there is healthy. However, the habit of unnecessary spending adds up: The $4 coffee every morning, weekly trips to the book store or shopping endlessly. Controlling your spending is the first step to financial wellness. Also, consider renting an object such as expensive ball gowns or electronics, and trips to the library are free!
  2. Living on Loans: This is a vicious cycle that is hard to break. Not only will this take a toll on making ends meet in the future, it means you are spending so much more on everything purchased on the particular line of credit. Trouble is brewing if you are relying on cards to make ends meet.
  3. Buying Too Much House: Keeping up with the Joneses is not the way to live. Buy a  home you can afford comfortably, and easily, and a home that you can afford after an interest rate reset. This is where many of the foreclosure troubles stem from right now. Also, if you can barely make the payment on the house, you do not belong in it.

Get ahold of your spending with a few easy tips from Get Rich Slowly:

  • Track every penny you spend for a couple of months. Don’t judge yourself.
  • From that, create a budget. Think budgets are a pain? 55% of millionaires keep one. It’s a bigger pain to not be a millionaire.
  • Make your bank accounts work for you. Get an online high-yield bank account, choose a rewards checking account and use a rewards credit card.
  • Have an emergency fund, so you don’t find yourself strapped for cash when an emergency arises.
  • Get the heck out of debt.
  • Earn extra money: take a second job, find a new, higher-paying job (of course, perhaps not when the unemployment rate is so high), make money off your hobbies or sell some things you no longer need.

And finally, note that ETFs are on average cheaper than most mutual funds. High fees chip away at your earnings over time, so if you’re in an expensive mutual fund, consider jumping ship and going to a similar ETF. You’ll save plenty by the time you’re ready to retire.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.