Halloween isn’t the only time of year you may encounter ghosts. Sometimes a financial decision you made long ago can rise from the dead to haunt you. Generally, these types of mistakes tend to share certain traits.

“They tend to reflect over-optimism,” Liz WestonMSN Money columnist and author of the book The 10 Commandments of Money—tells Straight Talk. “For instance: You’re signing up for a loan with the idea that you can pay it back. Except you may be talking yourself into a bigger commitment than you can actually handle. But then, we’re an optimistic nation. We borrow the money now and figure out how to pay it back later.”

So which decisions can lead to a financial American horror story? Below, Weston tells us about four major financial nightmares and how you can keep them at bay.

Credit Card Debt

The Haunting: Carrying a heavy load on your credit cards can be “very expensive,” Weston says, citing a current average rate that tops 14 percent. “This reduces your financial flexibility,” she adds.

The Exorcism: “The easy answer is, pay it off,” Weston advises. “If your total credit card debt plus your medical bills total more than half your income, you probably need help. You may need to talk to a legitimate credit counselor – one associated with the National Foundation for Credit Counseling. Or, you can find a lawyer through The National Association of Consumer Bankruptcy Attorneys.”

The Too-Big House

The Haunting: “If you have house payments you can’t afford, or if your house payments are much more than 25 percent of your income, you may be prevented from achieving other financial goals, like saving for retirement,” Weston warns.
The Exorcism: “Try to refinance or get a mortgage modification,” advises Weston. She recommends getting help from a HUD-approved (Department of Housing and Urban Development) housing counselor. One other possible solution (unattractive as it may be) is staging a “short sale” (when you sell a house knowing you owe more for it then you’ll be able to get).

The Too-Expensive Car

The Haunting: Weston calls the too-expensive car, “shockingly common. Whenever I hear from people who have cut every expense and they still can’t make ends meet, the reason is often sitting in their driveway,” she says. “You often hear people say, ‘I need a new car,’ You don’t need a new car. There are plenty of other ways to get around. Plus, you can always get a used car.”

The Exorcism: “There’s no easy way to get out of a car loan,” says Weston, who recommends paying it off and chalking it up as a learning experience. Weston also advises: Keep your loan period to no more than four years, put at least 20 percent down and try to keep your car going for at least 10 years. “You will save tens of thousand – if not hundreds of thousands – of dollars by owning your cars for more than 10 years.”

Saving Too Little for Retirement

The Haunting:I’m hearing from too many people coming up on retirement that they’ve either saved nothing or only tiny amounts,” says Weston. “The typical social security check is $1,200 a month now. If you can live on that, you don’t need to worry about retirement. The rest of us need to make it a top priority.

The Exorcism: “We have to start saving as early as we can,” Weston says. “Contribute as much as you can. Don’t raid the funds and don’t stop contributing. I see people spending their retirement savings or not contributing to their plans. It’s all about the compounding of the return: If the money isn’t in there, it can’t earn those future returns.”

Which past financial decisions have come back to haunt you? How did you deal with the situation?