As the year draws to a close, many of us begin reflecting on our goals for the upcoming year. Not surprisingly, financial resolutions often top the list. According to a 2024 study by the Pew Research Center, 61% of those who make resolutions include money or finances among their priorities.

With this in mind, setting the right financial goals is key to starting the year on the right foot. To help you avoid common pitfalls, we’ve put together a list of five financial mistakes to steer clear of—ensuring your resolutions set you up to reach your financial goals.

Not preparing for the unexpected

Having an emergency fund is essential, especially in today’s uncertain economy. According to a 2024 Discover Personal Loans survey, 80% of Americans feel anxious about their finances, with many unprepared for events like job loss, unexpected expenses, or medical emergencies.

Beyond an emergency fund, proper insurance is crucial to protect your financial plan. Review your life, disability, property, and casualty insurance to ensure you're covered. For retirees, long-term care is critical. According to the U.S. Department of Health and Human Services, 70% of people aged 65 or older are likely to need long-term care at some point. Lastly, if you own rental or vacation homes, an umbrella policy can provide extra protection.

Not planning goals

Not planning your financial goals is another mistake to avoid. According to a survey by Schwab, only 36% of Americans have a written financial plan. Without clear goals, it’s difficult to align your financial decisions with what truly matters to you—whether that’s providing for your family, funding education for children or grandchildren, passing down a family business, or preparing for retirement and the adventures you’ve always dreamed of.

Your personal goals should drive your financial strategy, not the other way around. That’s why we work with our clients to go beyond just retirement planning, helping them create a bucket list to address both their needs and their dreams for the future.

So, what’s on your bucket list? And more importantly—how will you fund it?

Not reviewing your tax plan for next year

Many people find they’re being penny-wise and pound-foolish, saving small amounts during the year and then getting hit with huge capital gains distributions or other unnecessary taxes. In a recent article from LFG Tax Services Director Mark Sipos, he explains how the end of the year is the best time to review your tax plan and look at the interest, dividends, or capital gains distributions you’ll have to pay taxes on. 

If you don’t like what you see, consult a tax strategist and plan to avoid the same situation again. 

Not having the right estate plan in place

Not having an estate plan in place is a significant mistake that can lead to unnecessary complications and expenses for your loved ones. A 2024 survey by FreeWill reveals that while 70% of Americans consider estate planning at least somewhat important, only 26% have taken the steps to create an estate plan. Without essential documents like a will, healthcare directives, and financial powers of attorney, your wishes may not be honored, and important decisions could fall into the wrong hands.

An up-to-date estate plan is critical, but it doesn’t stop there. Meeting with an estate planning attorney to explore options like trusts can be invaluable. Tools such as a bloodline trust can help protect family wealth and ensure your legacy is preserved—saving your family both time and money in the long run.

Not coordinating your financial, tax, legal and insurance needs

Failing to coordinate your financial, tax, legal, and insurance needs is a common mistake that can lead to costly errors and missed opportunities. While having advisors in each area is important, a lack of communication between them often results in gaps in your strategy.

We frequently see new clients with multiple advisors who aren’t working together, which can leave critical issues unaddressed. That’s why it’s helpful to have someone act as a Financial Quarterback—ensuring all aspects of your plan are aligned and nothing slips through the cracks.

If you’re unsure whether your current strategy is fully coordinated, reach out to our team to get a second opinion. We’re here to help!