Do you have a financial expert in your corner? Would you even know where to start when trying to hire a financial planner?
Most families feel that they don’t make enough income or have too much debt to hire a financial planner. That’s a mindset that could be holding you back from reaching your financial goals. Actually, it could be affecting your financial well-being, too.
Financial planners sometimes get a bad reputation, but there are some good ones and their goal is to help you reach your dreams. Let’s talk about why you should hire a financial planner and what you should look for.
What a Financial Planner Does for your Family
Understanding Your Vision
You need to take stock of your current financial situation. That means understanding your current investments, liabilities and assets. Yes, you could gather that information to start to see your big picture; however, a financial planner can help you with the smaller details. It’s possible that some time has passed since the last time you did an audit of your employer-sponsored retirement plan. It’s important to make sure your current investments fit your risk tolerance, which means you aren’t being too risky or too conservative with your hard earned money. Most individual’s risk tolerance changes as they have children, build a career and look towards retirement.
You should be doing an annual check-up on your investments and a financial planner can help make that process more smooth.
Your budget is another area where a financial planner can help. To start you need to have an idea of where your money is currently going. So make sure to track your spending, see how much you’re paying in debt payments and how much your saving each month. Once you have a good idea then a financial advisor can help you create a workable budget to reach your goals.
Reaching Your Goals
Do you have some big financial goals that you would love to achieve some day? Well most of us do and that’s great; however, creating a plan or a map to reach those goals is the hard part. A financial planner isn’t going to judge you for your goals, they are there to help you create a path to reach those goals.
Whether you have recently graduated with student loans, newly married and wanting to start a family or you are ready to maximize your retirement strategy — a financial planner can help you determine where your focus should be in this current moment.
Why It Can Help to Hire a Financial Planner
Do you and your spouse look at finances the same way? More than likely you don’t. There is typically a spender and a saver or you have different goals that you’re trying to reach. A financial planner can help guide you to more of a common ground so you are both satisfied.
A financial planner can also help you navigate through some pretty big life events — getting married, having a baby, changing careers and so on. But that does not mean you need to wait for a life event to start working with a financial planner. It’s never too early to start a strong relationship to help you build your dreams.
What To Look For in a Financial Planner
Not all financial planners are created equal. Make sure you know what to look for and what to ask to make sure they are a good fit for you.
- What is their main area of focus? Are they a part-time planner?
- Are they fee-based or commission-based?
- Do you feel comfortable with them? It’s important to make sure they understand your goals and they make you feel at ease when you talk with them.
- Have they earned the designation CERTIFIED FINANCIAL PLANNER™?
The CFP® means they have taken courses required by the Board, passed an exam and met the requirements to earn that designation. To find a CERTIFIED FINANCIAL PLANNER™ head over to Let’s Make A Plan by the CFP Board to see if there is a CFP in your area.
Make sure you understand their process — will there be quarterly or annual check-ins? Will they help you create a plan so that you can be sure to stay on track to reach your goals.
You may feel confident with the basics — paying down credit cards, opening a savings account, etc.; however, you should make sure you have an expert in your corner for when you’re ready to move to the next step. You wouldn’t go to your general practitioner for heart surgery, right? So make sure you have an financial expert ready to scrub in when needed.
No matter your income level, financial situation or journey — you can benefit from having a financial planner on your team. It’s nice to have someone you can call when you have a question, switch jobs, or have a new baby join the family. It can give you a peace of mind knowing you’re on the right path.