1 "If we put in a hot tub with a Jacuzzi, it'll pay off when we sell the house."

Not necessarily, so do your homework. Talk to realtors and, instead of daydreaming over decorating magazines, check out consumer-affairs reporting on what probably will add resale value (granite kitchen counters) and what most likely will not (that hot tub, koi pond or other "water feature").

If having a hot tub is worth it to you and you can afford it, by all means go ahead. But take the plunge with your eyes wide open.

2 "I've worked hard today so it's okay to reward myself with a night out."

If you've just closed a big deal, maybe. But for folks with a regular paycheck, this is a common trap. Like the double latte from Starbucks instead of the cup from the office coffee machine, these little rewards can too quickly become a habit.

Rewarding yourself for a job well done is not wrong, but be careful not to kick yourself up to a higher standard of living than you can really afford.

3 "Student loans are an investment in the future."

This is not wrong, but when it's acted on too simplistically, it can become a very deep hole that will take years to dig out of.

The hole gets particularly deep when parents who haven't saved enough encourage their kids to borrow to the hilt to go to top schools or to forgo student jobs so they'll have more time to study (and – let's be real – to party). Then Mom and Dad wonder why, when their deeply indebted kids hit their thirties, nobody's giving them any grandchildren.

The inverse version of this trap is where Mom and Dad take on the debt, but then aren't able to save for retirement. The payback, if it comes, will go to their kids, not to them.

The wiser choice, if it's not too late, is to make sure that neither parents nor kids borrow way more than they can afford to pay back. And parents should remember to save for retirement first, then for college for their children.

4 "I'll pay off my credit card right after Christmas."

Does this sound familiar? "I'll have the debt such a short time, the high interest rate won't matter." This trap ignores human nature and the laws of homeowners' probability, which decree that this will be the winter of an essential new furnace and a roof repair. The credit card debt gets carried forward to Easter, then Memorial Day, and pretty soon it's time for the Fourth of July annual vacation.

Obviously, the woulda-coulda-shoulda here is to take your tax refund – if you got one – and wipe out the credit card debt, or make yourself whittle it down at a set rate every month (focusing on your card’s high interest rate could help). Next year, set yourself up with some version of a Christmas Club plan and stick to your budget when you start shopping.

5 "It's perfectly good, so I'll just put it in storage until I need it."

Grandmother's comfy couch that needs reupholstering and doesn't fit in your living room now anyway; college texts and reference books and the class notes that go with them (needed for one's memoir perhaps?); the Nordic Track that only needs a new cable; the long-stemmed crystal wine glasses and champagne flutes from your first marriage; the banquet table and 14 high-backed, Jacobean chairs from your great-grand-aunt's first marriage; the beer stein collection from your fraternity days and, of course, 45 years of National Geographics. Will your kids really want these things when they finally move out into their own apartments? Do you see yourself relocating them to that vacation house you've been saving for?

If the storage room costs $120 a month, it would add up to more than $14,000 over ten years. A person could do a lot with $14,000.

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