Beware these 6 financial mistakes

No one likes to lose money. But if you make a bad financial decision, it can set you back a hefty penny or two.

In the U.S., for example, the average mistake costs $23,000, reports MoneyWatch.

While investing isn’t foolproof, there are some steps you can take to avoid potential losses.

Read: Mind those mistakes

MoneyWatch reported these six financial mistakes to watch out for.

1) Failing to maintain an emergency fund. This should be six to 12 months of living expenses. For those in retirement, carrying 12 to 24 months of expenses is even better.

2) Creating an overly optimistic financial plan.

Read: Making money in softer markets

3) Paying more fees than necessary. Investors who stick to no-commission index mutual funds start each year with a 1% to 2% advantage over those who invest in actively managed funds that carry a sales charge.

4) Allowing your emotions to rule your financial choices.

Read: Emotional nuances can impact investments

5) Not having adequate insurance or purchasing too much.

Read: 4 tips for better insurance rates

6) Assuming too big a risk. If you’re making a risky investment, only allocate the amount of money you’re willing to lose—what won’t affect you over the long term. Limit your exposure to a reasonable percentage (single digits) of your net worth.