The investment world comes with such a maze of options and pitfalls that it’s little wonder people routinely become entangled in monumental and costly mistakes.

Tax implications lurk behind nearly every move. Investment risks vary from negligible to moderate to great.

And it’s not just a matter of making the right financial decisions. It’s making them at the right time. Doing the right thing at the wrong time makes it the wrong thing to do.

April is National Financial Literacy Month and it’s a good time to help your clients take stock of where they are money-wise and explore how they can improve.

By asking the right questions or taking the right precautions, you can help your clients sidestep these common financial mistakes.

hot investmentBecoming infatuated with the latest hot investment.

It’s easy to be seduced by whatever is creating the greatest buzz. After all, you don’t want to miss out while everyone else is reaping rewards. Resist the temptation. Momentary sizzle doesn’t guarantee long-term success. Hot investments are like ice cubes. They’re solid when you get them, but they soon liquefy and when you liquidate, your gains trickle away.

narrow mindedNeglecting to consider all the options.

Savvy investors use different kinds of investments to satisfy different financial needs. Don’t neglect the full array of available investments. Relying only on stocks, bonds and cash puts you at a disadvantage.

death taxesFailing to account for investment costs and tax ramifications.

Investing isn’t free. Usually, there is some sort of fee attached and those fees can gnaw away at your returns. Taxes can, too. Before long, what looked to be a nice return can devolve into a minimal, break-even or losing proposition. Don’t diminish the importance of investment costs because they diminish your wealth. You need to take time to learn about the costs that are applied to each type of investment.

spend moneySpending all that comes in.

Too many people let their income level set the ceiling on how much they spend each month. Such spendthrift habits leave people living paycheck to paycheck and when the inevitable emergency arises – a car repair, a medical bill – the bank account is short and they need to take on debt just to survive until the next payday.

Your budget, not your income, should dictate spending limits. If you don’t have a monthly budget – and many people don’t – now is a good time to create one. Just make sure the amount you budget to spend is less than your net income, and then stick to your budget. Otherwise, you’ll soon creep into the realm of deficit spending, a place best avoided.

work aloneTrying to go it alone.

Most people, whether they want to admit it or not, need investment advice. Without reliable guidance, they can end up lost in the financial jungle and succumb to numerous hazards that await the unwary. You need someone who understands all the upsides and all the pitfalls. But not all investment advice is equal, either. The person you choose should be both skilled and trustworthy and should always put your interests first.