Big Mistakes Financial Planners Watched Clients Make in 2021

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I spent a lot of time this year focused on my finances. I started off with a hefty goal of saving 21% of my income throughout the year and committed to sticking with a very tight budget. But as I get ready to close out the year and do an inventory of my finances, I’m starting see some of the blunders I’ve made with my money this year.

I knew I wasn’t alone in that, which is why I asked four financial advisors to share the top money mistakes they saw clients make in 2021. 

1. Not knowing where your money is invested 

While 2021 was a year I put even more of my cash in the stock market and into funds, I don’t have full clarity on what I invested in. Financial planner Scott Turner said this was a common mistake this year that he saw with his own clients. 

He gave an example — a client who had picked both a Target Date Fund in their 401(k) plan and then two other mutual funds — and said that all three investments had overlap with each other and were invested in the same things.

“Which is kind of like ordering a salad as an appetizer, a salad as a main entree, and a salad as a dessert,” said Turner. “That’s problematic, inefficient, and adds unnecessary risk.”

2. Not setting a budget for holiday spending 

I committed to a very intense budget this year, which I was pretty good at sticking to until the holiday season. Perhaps there’s extra cheer in this air…

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