This often happens to workers in their 30s to early 50s. As life gets busy, they pay bills on autopilot and pay little attention to long-term financial planning.
Here are six money myths to avoid as potential pitfalls in your peak earning years:
Myth 1: I need to prepare for an emergency before I pay down credit-card debt.
It's wisest to pay down high-interest credit cards before you save for a rainy day. "You have to look at where you get the best bang for the buck," says Carlo Panaccione, a financial planner at Navigation Group Inc. in Redwood Shores, Calif.
You'd be better off paying down a $5,000 credit-card balance charging you 14 percent than socking away that amount in a bank account earning less than 2 percent.
If you're concerned about an inadequate emergency fund, you should be. But recognize that if you start paying down debt, you can still charge most expenses if a problem arises.
Also weigh the consequences if you're sacrificing 401(k) contributions. You're losing the benefit of lowering your taxable income and possibly missing out on an employer match.
Myth 2: I should forget about asking for a raise until the economy recovers.
Lean and mean. After the recession, it has become common to hear about companies operating with minimal staff. While workers' productivity is up - they're working harder after staff cuts - they're not getting paid much more.
But the smartest managers don't want to lose their remaining talent. The best employees are in demand and are in a good position to ask for a raise, says Lee Miller, coauthor of A Woman's Guide to Successful Negotiating.
If you think you deserve a raise or a promotion, you will need to show why it is deserved. When you make the request, address the new skills or expanded role you've taken on, or the additional responsibilities you are willing to tackle.
Myth 3: I'm a renter and I don't own that much. I don't need a will.
Estimates vary, but it is probably generous to say that about a third of all Americans have a will. "Everybody absolutely needs a will," says Peter Lang, an adviser with HighTower Securities who specializes in estate planning. Without a will, the state will decide who gets your assets.
It is unpleasant to think about your own death, which is one reason many people don't prepare. But having a will ensures your possessions are distributed according to your wishes, and helps family members avoid disputes.
Myth 4: I'm focused on my retirement savings goal and that's enough.
The headlines "Retire rich" and "Retire early" have been retired. The 2008 meltdown has left a lingering impact. Workers with 401(k) accounts saw their balances cut by an average of about a third. Now many remain anxious, and it hasn't helped that their balances have only recently rebounded to their levels approaching the market's peak in 2007.
So many are contemplating working longer. Slumping home values and a weak economy have added five years of work for the average employee, says Brandon Ross, managing partner of Peak Capital Investments Services, a financial adviser.
What's more, collecting Social Security later increases the benefit. Avoid, if you can, the permanent reduction in benefits if you retire early.
Beyond savings, make sure you are also evaluating your anticipated expenses. That includes major items such as health care, possibly in a nursing home or through an in-home nursing service.
Myth 5: I'm healthy and in the prime of my life; I don't need life insurance.
Life insurance isn't for you, it's for your loved ones. Buying insurance often depends on whether you have financial obligations you want covered after you're gone. For young people, term life insurance is inexpensive and will help cover funeral expenses and pay off debts. This is also a good option for single people to cover the basics. It is purchased for a specific time period, so when it ends, you need another policy.
Myth 6: I just bought a huge commercial-kitchen jar of Grey Poupon. Buying in bulk is always a good strategy.
It is estimated that most people consume only 12 ounces of mustard per year. So you may have just stocked up on more than a decade's worth unless you're hosting a major picnic.
Buying in bulk, taking advantage of sales, and using coupons is a good savings strategy if you're actually purchasing items you need and would have purchased anyway.