It's reality-check time. The silly season has been and gone, leaving a trail of broken resolutions, broken gifts and broken budgets. But even if those plans to quit smoking or drinking, be nicer to the family or make a million by Australia Day are looking shaky, now is as good a time as any to start to reshape your financial habits. Try resolving never to make any of these common money mistakes again.

Spending money before you have it

Laura Menschik, the managing director of Millennium Financial Services, says this is a common trap - especially at this time of the year when the temptation to spend is so strong. "People are always allowing their lifestyle spending to increase faster than their income," Menschik says. "They want to buy something so they think, 'I'll pay for it with my next pay rise, bonus or whatever.' But those things may not happen and other expenses may come up that need to be paid as well." All that, she says, means you merely end up with more debt against spending that is - let's face it - generally of the "here today, gone tomorrow" variety.

Investing on hot tips

Save that for the racetrack, says Shane Hawke, the research manager at RetireInvest. As at the track, for every fluke that wins, there will be a dozen losers.

Following fads

Remember lime-green shirts? Gold shoes? Dot com shares with no real business but lots of promise? They've all gone the way of the Tasmanian tiger. The national manager for technical strategy at ING Financial Planning, Louise Biti, says buying something just because everyone else is has never made good financial sense and can be downright dangerous when it comes to your investments. As with that other sort of fashion, look for something that will last.

Buying last month's hot investment

Dominic McCormick, the research manager with Bridges Financial Services, says too many investors still invest in funds (or other investments) based on their past performance. Problem is, this often bears no relation at all to their future prospects. He says investors early last year threw money at technology funds purely on the basis of the high returns they could have generated in 1999. Similarly, a lot of money has recently gone into international share funds because they generated high returns in 2000. "I suspect a reasonable proportion of these investors don't understand that a large part of the recent returns has come from the weakness in the Australian dollar," he says. "And if the currency rebounds that could have a very adverse effect on future returns."

Procrastinating

How many of us have money in the bank that we're intending to invest as soon as the sharemarket or property market falls? What happens, says Menschik, is you end up bemoaning the fact that you didn't buy two or three years ago.

Signing things you don't understand

Menschik says she still hears stories of people losing money by signing personal guarantees for family members without understanding the implications. (If the borrower defaults, the lender comes after you for the money - plus interest and penalties.) Complex financial products can also contain traps for the unwary. Rob Prugue, the research manager with van Eyk Research, reckons investors should stick to financial products with simple concepts and names. "Avoid funds that have snazzy acronyms in their names," he says. "Typically it is the most boring-named products that are the better performers over the long term."

Putting all your eggs in one basket

This lesson, says Hawke, was hard-learnt by many of the investors who put a significant swag of their money into T2, fully expecting it to provide the same short-term returns as the original Telstra float. "If they'd spread that money across some other investments as well, they'd be much more likely to be sitting on a better return," he says.

Making decisions on yesterday's news

OK, so we don't all have crystal balls. But Rob Prugue says one of the worst things you can do is make investment decisions on events that have already happened. More often than not, the good or bad news has already been factored into the market and you risk buying too high or selling too low. "Concentrate on a three-to-five-year view, not on the news today," Prugue says.

Assuming you can't pay too much for a quality investment

We've all heard the arguments that you can't lose money buying quality shares or property. But McCormick says a good investment can be a terrible investment if you buy it at the wrong price. Do your sums and work out the returns needed to justify the price.

Investing for inappropriate timeframes

Biti says one classic example is people who invest heavily in super even though they want the money before they retire. Another dud is investing the savings for that house deposit you want to make this year in the sharemarket. But it's just as bad to keep those long-term savings in an at-call bank account.

Impulse buying

Shares, a car or a night out ... Hawke says most of us have been seduced by the "wealth effect" into more impulse spending over recent years. With wages rising, unemployment falling and the economy buoyant, it has been easy to relax our spending controls. But as the recent slowdown fears for the US economy have shown, the good times don't last forever.

Spending too much on lifestyle assets

OK, so house prices in Sydney are high. But Menschik and Hawke say many people spend so much on their house or car that they can't enjoy their lifestyle - let alone find a few dollars to put away for the future.

Carrying credit card debt

It's expensive and destructive, says Menschik. If you can't pay your bill off in full each month, stop using it until you've reduced your debt. And don't, she says, take out a personal loan to pay off the card and then keep running up more bills on the credit card.