We’re humans. We make mistakes. Many of us make the same mistakes. Some of those blunders are bigger than others.

Let’s talk about one of the biggest common personal finance errors. Wait. Let’s rephrase that. Let’s talk about the undisputed king of personal finance mistakesb. It’s mistake in which millions of people share and it can have some truly life-changing consequences (and not in a good way, either).

The big kahuna of personal finance foolishness? Failing to have a long-range plan.

It’s hard to think decades down the road. Heck, it’s hard to think three weeks ahead sometimes. When it comes to managing your money correctly, however, you need to develop that long term perspective.

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I think the reason so many people fail to come up with a long-term plan is because you can fall into an ugly cycle if you get off on the wrong foot.

Here’s what I mean. You don’t have a plan. As such, you make poor financial decisions. Those poor decisions put you in a tough situation in terms of staying above water. It’s even harder than usual to think “big picture” when you’re in dire straits and living paycheck to paycheck. The lack of that broader perspective, however, insures more poor financial decisions. That leads to… You get the idea. It’s an infinite loop of financial difficulty.

So, how do break the cycle? Short of a few lottery victories or some kind of perspective-altering head trauma, it’s a matter of recognizing that it’s time to get a handle on your money and putting your foot down. Then, you need to combine some good homework with a dedication to taking action.

Realization, research and work. It doesn’t sound like a ton of fun, does it? Maybe that’s part of the reason why people continue to circle the drain in the “no plan–>bad decision–>no plan” cycle. There may be a perception of comfort in the misery of chaotic personal finances.

At some point, though, people do hit bottom. They wake up and realize that they’ve had enough. They finally bite the bullet and get started with the process of devising that long-term plan, even in the face of short-term challenges. If they follow through, they can break the cycle. They can start making progress. They can tame a little chaos and feel much more secure in their futures.

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I doubt any of that is particularly controversial. We know that good money management improves both immediate and long-term qualities of life. We also know that a lot of people are running around without an end goal in mind. It’s a mistake and it’s a common one, but is it really the undisputed king of all financial blunders?

Let’s ask around, shall we?

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Simple Dollar did a piece on “The Twelve Biggest Personal Finance Mistakes People Make Over and Over Again”. They’re top slot went to, “Concern rarely extends beyond the next paycheck or two”. In other words, living in the moment without a bigger goal of a plan is a huge no-no.

The Bankruptcy Law Network explains their version of the “Top Ten Personal Finance Mistakes”. They startthis: “Rule #1: Have a personal financial goal and a plan to achieve it. The pressure of bills and getting the income to pay them typically causes you to lose sight of your personal financial goals. Sounds familiar, right?

Almost every time you look at a list of the worst common personal finance blunders, lacking a goal and a plan almost invariably sneaks up toward the top. Dallas Morning News columnist Pamela Yip sums it up nicely:

Without a plan or goal, your financial behavior will lack focus and you could spend your money – a dollar here, a dollar there – not knowing where it’s going or how the expenditures are affecting your financial security.

She wrote that as part of an article entitled “Top Ten Personal Finance Mistakes”. Her number one, predictably, was ” Not having a goal and a plan for how to achieve it”.

If you’ve busted out of the cycle and have put together a plan, kudos. I hope you’ll share what led you to take action and how you managed to get started. If you’re still floating around without a good plan, there’s no better time than now to start putting things into perspective and planning a way out of your current financial turmoil and into a future where money errors don’t cripple the quality of your life.