Many money mistakes, when corrected early enough, won’t have a material impact on your wealth long-term. However, there are certain mistakes that can be hard to recover from. The Financial Advisor Team at Liberty Wealth Advisors® details a few of these more serious mistakes below, in this primer on common financial missteps to avoid. If you have questions about any of these or about your plan to achieve your long-term financial goals, contact a Liberty Wealth Advisors® Financial Advisor today.

1. Don’t confuse required returns with desired returns
   
   It’s important to differentiate between required and desired returns. While the impulse to want to “outperform the market” and stretch for higher returns can be powerful, it can lead to concentrated portfolios with higher-than-necessary risk, ill-timed asset allocation shifts, and, additionally, may actually decrease the probability of achieving your financial goals. In our view, focusing on your required return – the returns needed to achieve your long-term financial goals - maximizes the probability of achieving your financial goals. – Richard P. Meagher, CFA, Financial Advisor    
    
2. Ensure you have a properly drafted will and estate plan
   
   If you don’t have a will, the state you live in has one for you! This is known as intestate succession and makes the distribution of your assets more difficult (and more expensive) for your heirs. People often delay meeting with an attorney to discuss end-of-life issues because they are young and healthy, and discussing these topics can be emotionally charged. However, creating a legally drafted will and the ancillary documents (power of attorney and health care proxy) can save your loved one’s time and expense if anything unexpected were to happen to you.  In addition, if you have young children, this is an opportunity to name a guardian to raise them and a trustee to manage any assets that you leave to them. Your Financial Advisor can help you identify an appropriate estate planning attorney if you don’t have one already. – R. Michael Parry, CFP®, Director of Wealth Planning
   
    
3. Involve yourself in family finances
   
   Families often segment their roles and responsibilities and may delegate oversight of the family finances to a single person. However, it’s important to have a general understanding of your financial situation: where your assets are held, how they are invested, income, cash flow, account access, financial goals, etc. While the disability or death of your significant other can be devastating, trying to figure out finances while simultaneously processing a major life event can be completely overwhelming. Discuss your plans with your trusted Financial Advisor. It can be an emotionally challenging topic, but advance preparation will make a big difference down the road. – Jen Flaherty, CFP®, CRPC®, Financial Advisor
    
4. Get the best deal on the debts you carry
   
   Whether it is a mortgage, business loan, or student loans, most individuals carry significant debts throughout their lives. Every 1-2 years, you should be shopping around at different lenders to make sure you have the best rates and terms available. Not only does the interest rate environment fluctuate, but so too does your creditworthiness. As your career progresses, and your balance sheet/cash flow improves, refinancing opportunities often present themselves. Failing to take advantage of these opportunities represents money left on the table. Make sure the lenders you are investigating know they are competing for your business. You are much more likely to be presented with their best offer if they know you are shopping around.  - Sterling Herrmann, CFP®, Financial Advisor 
    
5. Don’t forget to fund your Revocable Trust
   
   If you are using a revocable trust as part of your estate plan, make sure you place assets into the trust.  Assets not placed into the trust may have to go through the costly probate process and may not be distributed according to the terms of the trust. It’s a surprisingly common mistake to forget to actually move assets into the trust after an attorney writes the trust documents. This lack of follow up can derail an otherwise well-documented estate plan. – Bret D. Mulvaney, CFP ®, Associate Financial Advisor
    
6. Don’t confuse wanting something with needing something
   
   The ability to distinguish between wanting something and needing something is powerful. If it is unclear as to which category a potential purchase falls into, securing clarity before making a decision can save you thousands over the long run. Non-essential purchases, when balanced within one’s budget, are much more rewarding when the buyer’s decision is well thought out. This helps prevent the “buyer’s remorse” factor that may follow the short-lived feeling of excitement you can feel from impulsive purchases. – Logan N. Soll, Client Relationship Manager
    
7. Pay yourself first
   
   Paying yourself each month with automatic investing is one of the easiest ways to grow your nest egg. Put the largest amount into your 401(k) or other savings plan that you can afford, being sure to capture any employer matching funds, as well as depositing into taxable savings accounts. By depositing directly from your paycheck, you must truly think about stopping your automatic savings. This strategy can save you from yourself. By saving in both retirement and taxable accounts, you will be planning for long-term and short-term goals. Also, don’t forget about other ways to save long-term: exploring life insurance policies while you are young to lock in lower insurance rates, checking the underlying costs of your investment vehicles to ensure they are low, and maintaining a good credit score to access the best rates when financing is necessary. – Dawn E. Clingan, Client Relationship Manager
    
8. Don’t live on borrowed money
   
   It’s tempting to live above your means, racking up credit card debt and living on what is essentially money borrowed at a high price. Embrace living below your means, saving for retirement, and aiming to pay off all your debt before you retire. – Anna Stozek, Client Relationship Manager
    

Some financial missteps are minor, others can take years to recover from. A trusted Financial Advisor can go a long way towards helping you successfully achieve your long-term financial goals. If you’re uncertain whether you’re on track to achieve your goals, contact one of our Financial Advisors at info@libertywealthadvisors.com or 800-448-3550.