Building a Financial Strategy for the New Year

Success starts with a clear roadmap, and this guide will provide you with two essential tools: Five key steps to take to enhance your financial strategy and five common pitfalls to avoid that could derail your progress. Whether you’re saving for retirement, managing debt, or preparing for life changes, these insights will help you approach the year with confidence and clarity.

5 Steps to Take

1. Revisit Your Financial Goals

• Reassess both short-term and long-term plans.

• Adjust goals to reflect changes in your life.

• Use the SMART framework (Specific, Measurable, Achievable, Relevant, Time-bound) to make goals clear and attainable.

2. Reevaluate Your Budget

• Look back at last year’s spending to identify patterns or areas to improve.

• Update your budget to include saving goals and flexible spending.

• Set aside funds for emergencies, retirement accounts, and investments.

3. Review Retirement Contributions

• Confirm you are contributing to your 401(k) or IRA early in the year to maximize compounding interest.

• Ensure you’re taking full advantage of any employer match programs.

• Remember, you have until April 15^th to make prior-year contributions to individual and SEP retirement accounts.

4. Prepare for Tax Season

• Gather essential documents like W-2s, 1099s, and donation receipts.

• Work with your tax professional to explore available deductions and credits.

5. Meet with Your Team of Professionals

• Schedule a meeting with your Nixon Peabody attorney and Nixon Peabody Trust Company professionals to discuss changes in financial goals or life events such as marriage, a home purchase, or career shifts.

• Review and update your estate and financial plans to ensure they align with your wishes and goals.

• Receive insights on market trends and the broader economy to confidently make informed decisions about your financial future.

5 Common Pitfalls to Avoid

1. Delaying Important Decisions

• Don’t postpone saving for retirement or addressing debts—time is your greatest ally.

2. Overusing Credit

• Avoid carrying high balances on credit cards, especially after holiday spending.

3. Forgetting About Old Retirement Accounts

• Don’t lose track of retirement accounts from previous employers. Consider rolling them into your current employer’s retirement plan or consolidating them into an IRA to simplify management and ensure your investments remain aligned with your goals.

4. Skipping Emergency Savings

• Build and maintain a safety net of 3–6 months’ worth of essential living expenses in a liquid account.

5. Reacting Emotionally to Market Changes

• Stay committed to your long-term investment strategy, even during market fluctuations.

By focusing on 5 steps to take and avoiding 5 common pitfalls, you’ll position yourself for a successful financial year. These practical strategies will give you a clear understanding of where you stand and a solid plan for where you want to go. Remember, financial success is a journey, not a sprint. With thoughtful planning, realistic goals, and regular check-ins, you can achieve growth, stability, and lasting peace of mind.

Your Nixon Peabody team is here to support and guide you every step of the way. Whether you’re revisiting your goals, navigating complex life changes, or staying ahead of market trends, we’re committed to helping you make informed decisions and reach your financial aspirations. Let’s work together to make this year a milestone in your financial journey.

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Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal.

This communication may include opinions and forward-looking statements. All statements other than statements of historical fact are opinions and/or forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the beliefs and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such beliefs and expectations will prove to be correct.

Gina Coletti
Chief Fiduciary Officer
+1 617.345.1110
gcoletti@nixonpeabody.com