4 of the Scariest Financial Moves You Can Make

Here are a bunch of choices you might sorely regret.

When we think of some of the scariest experiences we might encounter, it's easy to imagine ourselves plunging down a speeding roller coaster track or cowering under our blankets after watching a horror movie double feature. But an even scarier experience is making a poor financial choice that hurts you for years to come. Here are some of the most frightening financial decisions you might make -- and why you should avoid them.

1. Letting yourself go without an emergency fund

You may decide you don't need a full-fledged emergency fund, but rather, that you'll be fine as long as you have a few hundred dollars in savings. But what happens if you get hit with a bill your small savings account balance can't handle? Or what if you get laid off at work and it takes months to start collecting a paycheck again?

If you don't build yourself an emergency fund, you might land in costly debt when life doesn't go your way. And, you could risk losing assets that are important to you, like your home or your vehicle. So instead, aim to sock away enough money to cover at least three months of essential bills, as that should buy you a decent amount of protection.

2. Running up a huge credit card tab

Credit cards make it easy and convenient to purchase the items you need and want. Now you might think that racking up a credit card balance isn't a big deal because you'll pay it off eventually. But credit card interest can compound against you on a daily basis so that for each 24-hour period your balance hangs out there, it grows incrementally. Throw in the fact that credit cards have high interest rates to begin with, and it's a true recipe for financial ruin.

A better bet? Aim to only charge expenses on a credit card that you can pay in full by the time your bill comes due. And if you have a balance already, pledge to whittle it down to $0 before adding to it with more credit card charges.

3. Taking on too high a mortgage

When you find your dream home after months of searching, it can be tempting to stretch your budget and take on a more expensive mortgage than you initially planned on. But doing so could mean leaving yourself with inadequate funds to pay your remaining bills. The result? Consequences like having to take on credit card debt and incur credit score damage.

Rather than push yourself to take on more of a mortgage, only borrow an amount that makes it possible to keep your total housing costs to 30% of your take-home pay or less. And by "total housing costs," we're talking about things like property taxes, insurance, and HOA fees, if they apply to you, on top of your mortgage payment.

4. Leaving yourself without any retirement savings

If you don't save money for retirement, you may be forced to live on Social Security alone. And seeing as how the average beneficiary right now collects less than $1,700 a month, you may find that your senior years are miserable and cash-strapped in the absence of a nest egg.

Rather than sentence yourself to a stressful, unhappy retirement, carve out room in your budget to contribute to an IRA or 401(k) plan. Even if you're only able to save $500 a year at first, that's better than saving nothing at all.

It's important to make smart financial decisions that set you up for success. And it's just as important to avoid these scary moves that could leave you kicking yourself for years to come.