In preparing this list of the most common mistakes people make related to their finances, we speak from experience that has encompassed hundreds of client sessions. This is by no means a comprehensive list, but serves to highlight the planning mistakes we have seen most frequently.

• Failure to set goals. Philippians 3:14 states, "I press toward the goal for the prize of the upward call of God in Christ Jesus" (NKJ). We establish spiritual, mental, and physical goals, yet are slow to establish financial goals. It's sad to say that the average person spends more time planning his or her annual vacation than they do their finances. We must establish short (less than 12 months), mid-range (12 months to 5 years) and long-range goals (over 5 years), quantify them, and then establish a plan to attain them based on the resources available to us.

• Failure to aggressively eliminate debt. If you're playing the market with your surplus funds rather than applying them toward consumer debt reduction, you're going to have to do pretty well to come out ahead. For example, on a $5,000 investment, you would need to earn $1,250 per year (25 percent) just to offset the $900 interest expense you would have saved if you'd paid off an 18 percent credit card line instead (assuming a 28 percent federal tax rate). The best way to enhance return is to eliminate debt.

• Failure to match investments with personal needs. A "poor" investment is not necessarily one that has underperformed; rather, it is an investment that is inappropriate given your specific goals. You must determine your specific needs and design a portfolio accordingly. The best investment in terms of safety cannot meet the needs of one with a long-term need for growth. Likewise, the risk and volatility associated with more aggressive investments may undermine the stability of someone needing safety and/or income. Your personal knowledge of investing (do you understand the nature of your holdings?) and level of desire to be active in managing your portfolio (how much time do you wish to devote to it?) are also considerations.

• Failure to allow for inflation and taxes. Inflation and taxes can adversely affect the best plan. During a period of 4 percent inflation, someone in the 28 percent marginal tax bracket must receive a 5.6 percent return on his or her portfolio just to stay even. Likewise, someone with a long-term need for income must include a growth element to keep the purchasing power at or above the impact of inflation and the drain of taxes.