Sabotaging your financial future.

• Position: Your Life - Financial Planning Association, - Financial Planning Association

According to the Financial Planning Association, Denver, Colo., Americans frequently mismanage their finances. The organization specifically cites eight ways families can rail into this fiscal trap:

Don't plan. Many people earn, spend, save, and invest their money without a great deal of thought or planning. They have only vague goals and don't analyze whether their limited financial resources are being put to the most-productive uses to achieve those goals and provide financial stability. In short, without a financial plan, and accompanying tools such as a budget, it is difficult to know where you are going or how best to get there.

Don't communicate. Spouses often have different styles of investing and managing money. These differences need to be discussed and then either reconciled or accommodated. Otherwise, financial conflicts can damage the overall household finances and even lead to marital problems. Leaving a spouse out of the "financial loop" also can be devastating should the other spouse die first. Financial planners strongly recommend that couples discuss finances with their offspring, particularly adult children who may inherit family wealth. A financial discussion with one's parents also can be critical in the event you have to take care of them or eventually settle their estate.

Wait to save and invest. People, particularly the young, often say, "I'll start saving later when I can afford to save." This overlooks the tremendous power of compounding.

Don't diversify your personal finances. The extended bear market has painfully illustrated the benefits of diversifying among a variety of investment categories, but diversification might well involve more than just investments. Take, for example, a couple who both work in the same industry, perhaps even for the same company. In addition, they invest heavily in stock options and employer or industry stock in their retirement plans. If that employer or industry suffers hard times...