NEW YORK (CNN/Money) – We all make money mistakes. But there are mistakes and then there are absurd, loopy, what-were-you-thinking mistakes.

So here's a challenge for 2005: If any of the following real-life anecdotes holds even the faintest hint of recognition for you, I say skip the usual New Year's resolutions and vow instead to lose the crazy notions that have gotten you (or will soon get you) into a money mess.

I don't want to touch my savings. A woman has $25,000 in the bank earning 1 percent. She also has $25,000 in credit card debt for which she's charged 16 percent interest. She doesn't want to use savings to pay down her debt because she would be "spending" her money.

Right. It's smart not to touch savings -- unless not doing so costs you a fortune, and what you save with the right hand you spend with the left.

Ah, it'll all work out. Let's celebrate. A business owner who hasn't been able to make payroll and is about to file for personal bankruptcy (again) decides to sell his house rather than give up his country club membership. Then, to celebrate the sale of his house (which hasn't sold yet), he takes a vacation.

Rolaids anyone? When personal bankruptcy looms, let's assume the first thing to go should be the pricey luxuries of life. And if you want to break the debt cycle, don't spend money before you've made it, especially not on things you consume far more quickly than the time it takes to pay for them.

Shoot, that's a big bill. I'll just file for bankruptcy. A woman has $70,000 in the bank and charges $60,000 on 20 credit cards, in part for her daughter's wedding. She'd like to file for bankruptcy so she won't have to pay off the debt.

For starters, 20 credit cards? Besides being cumbersome to track, so many cards can be too tempting if you have a spending problem. Most people really don't need more than three.

What's more, charging the equivalent of 86 percent of your savings for reasons other than a dire emergency is unwise to the nth degree.

Thinking bankruptcy is the answer is crazier still. According to the authors of "Money Trouble," a bankruptcy judge can dismiss your case if he finds you have enough assets or income to pay most of your debts, the majority of your debt is consumer rather than business debt, and you could pay at least most of your obligations in three to five years by modifying your lifestyle.

My parents are rich. A grown daughter thinks her mother should lend her money because "she has so much." Specifically, her mother got $100,000 in insurance proceeds after her husband died.

A hundred grand is not insignificant, but presumably it's intended for the mother's support. As such, it shouldn't be viewed as a lump sum – or a bank to be tapped -- but rather as an income generator. If the money earns 5 percent a year, that would generate a very modest $5,000 in income, but only if the principal (the $100,000) isn't touched.

Money taken out of an ATM doesn't count, right? When discussing her cash flow with a planner, one client learned that she should have far more money available than she did. Turns out she didn't count the $15,000 a year she pulls from the ATM.

Cash flow measures how much you have left over once you subtract your total expenditures from your total income on a monthly or annual basis. Any money you use in any form to buy things or pay bills should be counted.

So track your ATM withdrawals. You may find you're squandering large sums on little things that you wouldn't miss if you gave them up.

Bonds and money markets are safe, right? One planner had some clients who thought their high-yield bond fund was the same as their money market fund.

Nope. One big difference between the two is risk. Money market funds carry little risk (and offer very low returns) because they invest in short-term debt such as certificates of deposit and short-term Treasury bills.

By contrast, high-yield bond funds are highly risky (hence, the promise of a high payoff). They invest in junk bonds, which are issued by companies that have a significant risk of default because they have poor credit ratings or are unproven entities.

Quick! I need money. Clients anticipating a big tax bill in April call their financial planner in December to ask for "hot investment ideas" that can generate big returns in three months.

The odds of making a killing on anything in three months are akin to winning the lottery. Ain't gonna happen. Your chances are far greater of breaking even, making a small amount (which will be taxed at the maximum rate) or losing your shirt.

And how happy a New Year would that make?

Jeanne Sahadi writes about personal finance for CNN/Money. You can e-mail her about this or any other column at everydaymoney@cnnmoney.com.