Your financial well-being is feeling good about your choices and your financial health. In addition to doing things right, there’s also some things to avoid. Read on to learn three areas that can threaten your financial health – and how to avoid them.

1. Avoid bad debt

Debt can be useful for meeting your financial goals, and not all debt is bad. But some types of debt are extremely expensive, and risky to your well-being.

  • Car note loans – these loans work by a borrower exchanging the title and set of keys for a loan based on the vehicle’s value. Interest rates can range from 30 to 120 percent, and if a single payment is missed, the car can be repossessed.
  • High interest unsecured loans – usually lent in increments of $5,000 or $10,000, interest rates for this new breed of high-risk, unsecured loans can be as much as 47 percent.
  • Payday loans – borrowing against future income can seem like a great short-term solution, but with average annual interest rates ranging from 390% percent to 871%, payday loans are no bargain.

Having an emergency fund  saved up is the best way to prevent having to take out the risky loans listed above when you have an emergency. And for regular monthly expenses, a realistic budget  will help you have enough money to cover the necessities.

2. Don’t overpay for things

Almost every purchase has the potential to cost too much – from a used car that was priced above blue book value to an investment fund with a high management fee. Even buying a single canned drink at the convenience store or dollar store instead of buying it as part of a 12-pack at the grocery store could be an example of overpaying.

If you’re in the habit of shopping around and comparing, you’ll avoid overpaying for many things. When it comes to your finances – whether it’s a checking account or a retirement plan – pay attention to fees, interest rates and other charges. These can add up over time – just like the additional cost of buying single canned drinks.

3. Prepare for emergencies

Having an emergency fund saved up is the best way to prepare for emergencies like a job loss, a serious illness or major damage to your home. Having appropriate insurance can also be of great help in emergencies. Don’t pass on insurance just because it isn’t mandatory. Consider insurance such as renters insurance and disability insurance in light your ability to handle the emergencies. If you’re a renter and your apartment was damaged would you be prepared to replace your belongings? If you were disabled and couldn’t work, would you be able to take care of your dependents? Check out our article on insurance coverage to learn more.