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Bad financial management and bacteria have one thing in common: they flourish and mutate upon discovery. As soon as you realize you have committed bad money management, your error transforms itself into something else that looks too good to resist.

So how do you prevent yourself from making the worst money mistakes possible in this lifetime? Know your enemies! Study the worst possible money moves you can make. This way, you can recognize bad money management when you see it, even if it sports a striped tie and a toothy smile.

1. Never buy too much house.
Know that mortgage lenders will not always give you advice that serve your best financial interests. In fact, many mortgage lenders might even push you to buy too much house. Too much house refers to a home that is more than what you need, or could reasonably pay for.

Why would some mortgage lenders encourage you to buy too much house? The more expensive the house you buy, the bigger the mortgage lender's commission. It's even highly plausible your mortgage lender is in cahoots with your real estate agent. After all, a large loan translates to higher commission and more fees and interests.

2. Never use a home equity loan to pay off your credit card debt.
At surface value, borrowing from mortgage lenders to satisfy your bank seem to make sense. After all, home equity rates are typically lower than your card's interest rates. Additionally, interest from your home equity loan can qualify as a tax deduction. However, the only way this scheme can work in your favor is if you stop racking up debt through your credit card. Otherwise, you would end up paying two debts - that of your home equity loan and your credit card. In the end, you will find you have only dug a deeper hole to bury yourself in.

Make no mistake about it, though. Home equity lending is useful, but only as an emergency source of cash. You could set up a home equity line of credit with a mortgage lender. This can serve as your safety net should you lose your job or need money to meet hospital bills. Home equity lines of credit work much like credit cards. They come with variable interest rates, and many mortgage lenders can set one up for you free of charge and with very low annual charges.

3. Never borrow from your retirement fund to pay for a house or settle credit card debts.
More than 80 percent of the American workforce borrow from their retirement plan to pay off banks or mortgage lenders. They even think this is a smart move. They reason that when they repay the loan, they are in effect paying interest to themselves. But think about it. What if your company closes down? What if you lose your job? You would have to repay your loan immediately. If you just lost your job, odds are you won't have much dough to settle this debt. So, you'd get penalized and taxed on the outstanding loan balance.

The best thing you could do to your home equity and your retirement fund is to leave them alone.

In war as in finances, it's best to keep your friends close and your enemies even closer. Knowledge of the three money pitfalls will help you protect yourself from your greatest friend and enemy: yourself.