Top 10 Money Mistakes New Families Make

Paying for Services You Don't Use

The classic of this genre is the expensive gym membership that one buys -- often at the first of the year, following the usual New Year's resolution to get in shape -- and never uses. "This money waster is based on the financial fallacy that paying for something guarantees that you will make use of it," says Catherine Williams, vice president of financial literacy for Money Management International, a Houston-based consumer credit counseling service.

"In fact, all it does is give you a double dose of guilt -- first, for not working out, and then for throwing money away on top of it." Before you sign a contract committing to a year's worth of workouts, see if you can purchase a trial membership for a month, or pay by the class until you're sure you'll use the facility regularly.

Other unnecessary services may include price clubs or travel clubs that offer no greater discounts than what you'd find yourself by doing some careful comparison shopping. You're often told that such memberships "pay for themselves" after only one or two uses, but before you swallow that line, do the math.

And one more thing about those price clubs: They make it all too easy to "go broke saving money." How many stories have you heard about someone who goes into one of these merchandise-stuffed warehouses looking for discount diapers, only to walk out an hour later with $300 worth of other irresistible "bargains"? Ask yourself if you really need this membership and whether it will actually help you economize. If you can't answer yes to both, save yourself the price of admission.

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