3 Spooky Financial Mistakes That Could Haunt You for Years

It pays to avoid these money-related blunders at all costs.

It's that time of the year -- when houses are lined with ghosts and goblins, and horror movie screenings are popping up all over town. And if the idea of a barrage of costumed kids pounding on your door asking for candy spooks you a bit, well, you're probably not alone.

But as creepy as this time of year may be, there's nothing scarier than wrecking your personal finances by making a few critical errors. Here are some blunders you could end up regretting for years.

1. Not building an emergency fund

As a general rule, it's important to have three to six months' worth of living expenses tucked away in a savings account. That way, you'll have cash reserves to tap if you lose your job, encounter a pile of medical bills, or get hit with a costly home or car repair.

But if you don't build yourself an emergency fund, you may be forced to rack up costly debt that stays with you for years. Even if you end up borrowing money via a personal loan (which won't hurt your credit score if you make your payments on time), you'll still have to deal with the mental load that comes with being in debt. And that alone might impact you negatively.

2. Racking up avoidable high-interest debt

Some people rack up expensive credit card debt because life's circumstances aren't kind to them. If you happen to lose your job and encounter a major home repair at the same time, you may have no choice but to charge expenses on a credit card and pay off your balance over time -- even with a solid emergency fund.

But some people land in credit card debt because they don't watch their spending or because they commonly give in to indulgences and impulse buys. It's this situation that you might bemoan for a long time. Not only can credit card debt cost you a lot of money in interest, but too high a balance can damage your credit score, making it harder to borrow money when you need to.

A good way to avoid credit card debt is to stick to a monthly budget. Also, take steps to avoid impulse purchases when you can. Don't store credit card details on your phone or laptop so it's more difficult to buy things on a whim.

3. Passing up the chance to refinance your mortgage

If you own a home, refinancing your mortgage could make your monthly payments more affordable. And the less you spend on housing each month, the more cash you'll free up to build emergency savings and cover bills so you don't need to resort to credit card debt. If you're having a hard time affording your home, it's even more important to look into refinancing.

As a general rule, refinancing makes sense when you can shave about 1% or more off of your current mortgage's interest rate -- and when you intend to stay in your home long enough to recoup your closing costs. If you can check both items off your list, then it pays to shop around with several refinance lenders to see what rates they offer you. Comparing your choices is a good way to end up with the best deal on your new home loan.

We all make mistakes in life, including those that pertain to money matters. Avoid these mistakes to bypass whatever scary consequences might otherwise ensue.