How Can a Financial Planner Help You Reach Your Goals
Do You Need a Financial Planner?
There’s a reality of adult life that we rarely think about as teenagers or consciously teach our own kids. It’s something we wrestle with every time our car makes an unexpected noise, something in our home isn’t working, we notice a new pain or discomfort in ourselves, or we want to improve ourselves or our surroundings.
Do I tackle this myself, or seek advice from a professional? Can I fix or improve this, or would it make more sense to pay someone else to do it?
There aren’t usually clear “right” or “wrong” answers. They’re different for everyone. You may be comfortable stripping your truck down to parts and putting it back together again after you’ve flushed the fuel system or re-gapping your spark… things. I take my car to the dealer for oil changes. You take your taxes to a local accountant. I’d never dream of letting someone else sort through my receipts or compute my deductions.
There are times that hiring a professional is purely a matter of convenience. (I envy friends who find it affordable to have a maid service come in once a week to clean.) Other times, it’s simply irresponsible not to let the experts handle it. (If I’m having a heart attack, call 911 – don’t stop to Google home remedies!)
Organizing your finances and planning your financial future is a bit like that. Should you manage and be responsible for your own budget, managing your debt, and setting realistic financial goals? Absolutely! Can it be beneficial and financially practical to consult with a professional financial planner? Certainly! The decision is entirely up to you. Let’s take a few moments, then, to make sure we know what a financial planner actually does and why we might consider hiring one.
What Is a Financial Planner?
A financial planner is an outside expert who works with you to clarify your short-term and long-term financial goals and make a plan to reach them. They gauge the level of risk you’re willing to take with your investments and help you figure out what combination of investment options are more likely to help you meet your goals. They usually help you frame your future in terms of major stages and develop a specific plan for savings and eliminated debt based on your income, age, family situation, etc.
The role of financial planner obviously involves financial expertise – the ability to manage investment portfolios, read the markets and understand how various changes impact your short and long-term strategies and make good decisions with everything from tax deductions to adding a deck out back. But it has a touch of “life coach” with it as well – helping you recognize areas in which you need a little work. Maybe you have some stubborn, counter-productive spending habits, or too many priorities for any one or two of them to be realistic without dialing back on the rest. Some will merely advise, while others will actually manage your investments or other assets for you.
Financial Planner Vs. Financial Advisor
You’ll often year the terms “financial planner” and “financial adviser” used interchangeably. The responsibilities of a financial advisor are far more broad than those of a financial planner, however. You hire a financial advisor to help you with a wider range of money decisions. There are general financial advisors and those with different specialties.
Think of your family doctor, who practices generalized medicine, but who might send you to an OB/GYN upon discovering that you’re pregnant. Both are doctors, but each has its own focus and specialty, although either probably knows a great deal about the stuff covered by the other.
A financial planner is a type of financial advisor, but with a more specific focus. While the decision-making and behavior changes start now, the focus is on the future, not the present. You might more accurately think of them as financial goal planners. An advisor can help you address a range of financial issues in your present and future. A financial planner will certainly start with your current reality, but the priority will be listening to your wants and needs, then helping you set realistic financial goals and figuring out how to reach them.
Which you choose depends on your goals and needs. Most of us aren’t trying to figure out how to best shelter our millions from the I.R.S. or leverage our… something to maximize, you know… something else. If your main concern is figuring out how you’re going to be able to retire comfortably and take care of your family and such, a financial planner is probably the best place to start.
What Are the Qualifications Of a Financial Planner?
Here’s where it’s especially important to be cautious. In most states, anyone can call themselves a “financial advisor” or a “financial planner” (although in some states there are specific certifications or licenses required in order to give specific financial advice or manage the investments or assets of others). In most cases, you want to find a Certified Financial Planner approved by the CFP Board.
That doesn’t mean everyone else hanging out their “financial planner” shingle is a scam artist or even that they’re completely unqualified in all areas. They may be current or former accountants, brokers, insurance agents, or simply entrepreneurs who’ve figured out a wide range of things on their own along the way. While a financial planner should be able to offer useful expertise on most money matters (the same way any good doctor should have a general knowledge about most specialties outside their own), some have more experience in some elements than others. You may find financial planners specializing in one or more of the following:
Debt management and debt reduction strategies
Effective budgeting and saving towards the future
Home, health, vehicle, and life insurance decisions and management
Investing, retirement, and risk management
Tax optimization
Estate planning and wills
That doesn’t mean you have to choose one in exclusion to the others. You may find, however, that different financial planners have different ideas about the best road forward. You’re hiring an expert for their expertise – at some point, we’re trusting them to know what’s best. That doesn’t mean you set aside your own judgment or wants and needs entirely. It’s usually better to partner with professionals, not hand yourself over to them entirely and wash your hands of responsibility. Your financial future is too personal and too important for someone else to make the decisions for you without your input and buy-in.
So Do I Need a Financial Planner Or Not?
Whether or not you need a financial planner is up to you. What you definitely do need, however, is a financial plan. We all have plenty of reasons that budgeting or saving or investing is not for us, but at the risk of being blunt – that’s absolute nonsense. The reality of life in the 21st century is that we all need a plan. Of our own. One which controls as many factors as possible. There are many things we can’t control but no excuses not to prepare.
Is it possible we’ll do everything in our power to invest and plan and be responsible and it could all still fall apart thanks to politics and policies, environmental disaster, another plague, or unforeseen personal tragedy? Yes, of course, that’s possible. But recognizing the limitations of personal financial planning is no excuse for pretending you’re a teenager forever – living paycheck to paycheck and distracting ourselves ndlessly with Netflix, video games, or socializing.
You know that old cliché about how failing to plan is planning to fail? Yeah, that one’s tired but still very much true. Change your air filters. Get a regular oil change. Schedule an annual physical with your family doctor. And set some realistic financial goals. Then start making – and following – a plan to reach them. The good news is, it’s National Start Getting Your Financial Act Together Day! (Well, for you, at least. Congratulations!)
So, where do you start?
Educate Yourself (Even If It’s A Little Bit At A Time)
Time magazine recently reported the following:
Today, only about one-third of Americans have a working understanding of interest rates, mortgage rates and financial risk, according to the Financial Industry Regulatory Authority. And this measure of financial literacy has fallen 19 percent over the past decade. This gap is estimated to have cost Americans more than $415 billion in 2020 alone.
And yet, Americans are worried about their financial futures. But without basic financial literacy, how can they hope to prepare?
We talked above about the dilemma between tackling a home repair project yourself or calling in a professional. While there’s nothing wrong with calling in the experts, the 21st century offers more resources than ever before in the history of mankind for figuring some things out ourselves. It’s called “the internet,” and while it’s packed with nonsense, lies, porn, and other rubbish, it’s also a treasure trove of medical information, history and science research, personal support, and endless YouTube videos on how to fix a leaky toilet or repair a hole in your drywall.
When it comes to financial understanding, there’s a wealth of information available – most of it free and much of it in plain, simple English aimed and folks just like you in circumstances just like yours. You probably know by now that every site in the Goalry family prioritizes informational blog posts on a wide range of topics – always accessible, always free, and always practical. I’d love to tell you we’re the only reputable site on the web for such information, but that’s not how we roll here. There are a number of other reliable informational sites as well. Ideally, you read up on any subject from several sources and over time you’ll figure out which ones are most likely to work best for you.
Create Your Path to Financial Success NOW. The Goalry Mall Is Here to Help.
We offer services here. We’re proud of our track record connecting clients to reputable online lenders and if you’ve visited before you already know we’re giddy over some of the apps and other online tools we’ll be unveiling in coming months to help “normal people” (that’s you and me) take more effective control of their personal or small business finances. Don’t be surprised when other sites offer their own links and promos. But they should never overwhelm the educational or other useful content. If they do, their priority isn’t helping you make better decisions – it’s “capturing” you before you find what you’re looking for. When that happens, close that window and cross them off your list.
You don’t have to figure it all out in one sitting or in a single weekend. Take 30 minutes today to finish this post, then read up on something else about your financial future linked to in the margins or which you find by searching the site. Jot down any questions or ideas you have along the way, and set aside time a few days from now to research those a bit as well. A few days after that, take another 20 – 30 minutes and keep going. You’ll be surprised how quickly you start to gain insight and confidence. And why not? You’re becoming your own financial goal planner!
Suggested Goal
We’ll never tell you what to do with your own life or your own money. We will, however, share our own insights and recommendations. Since we’re talking about financial planning, here are the top five topics I’d suggest pursuing first on the Goalry blogs or other reputable sites you come across.
How Do You Create a Budget For Almost Anything?
1) Make and Use a Budget
I’ve talked about this so much already that I won’t go into detail here. (You’ll have no trouble finding my dozens of other exhortations and the occasional rant on this topic should you choose to look.) Budgets don’t tell you how to spend your own money or what you should prioritize. They reveal how you’re spending your money and what you’re prioritizing.
Once you know that, you can make more informed and intentional decisions about what you’d like to change and what you’d like to keep the same going forward.
2) Debt Reduction or Elimination
11 Incredible Tips for Eliminating Debt Quickly
It’s not always practical to completely eliminate debt, but it’s essential that we maintain control of our debt and make it work for us – instead of us working for it. Some debt, like credit cards, is designed to operate as financial quicksand, sucking us further down the more we struggle. Other debt comes at us completely unexpectedly – medical bills, legal fees, emergency repairs, or just… life.
It may feel hopeless, but that’s all the more reason to face it and make a plan. It may not be easy, but it doesn’t have to be as hard as it often feels to get debt under control.
3) Raise Your Credit Score
Good Credit Score - Best Practices Anyone Can Follow
It may sound like it’s just a number – the adult equivalent of an “A+” or a blue ribbon at the county fair. But your credit score impacts almost everything else you do, now and in the future. Strengthening your credit doesn’t solve your problems, but it gives you more options and opportunities. It means that life costs you less and moves you from under the wheels to behind the wheel. Whether your current score is average, below average, or abysmal, we can help you start moving in the right direction.
4) Home Ownership
Home Purchase Loans That Will Make You Glad You Purchased
There are people who are perfectly happy renting or living in other arrangements. But homeownership is still one of the most secure and meaningful ways to anchor your family, your life, and your financial future. It may take some determination, and we can promise you more paperwork than a CVS receipt, but it’s doable if you decide it’s doable. I suggest starting right here if you don’t believe me.
5) Preparing to Leave Something Behind
Term Life Insurance For a Healthy Family Future
From life insurance to homeownership to savings, stocks, bonds, or other investments, we all want to leave something behind for our loved ones when we go. At the bare minimum, we hope to offset the cost of dying so they don’t end up having to navigate mourning and new debt at the same time. Ideally, of course, we want to do better than that. It may not seem possible, but we can’t really know that for certain until we’ve educated ourselves a bit more. At the risk of sounding like an insurance salesman in the 50’s, aren’t the people you love worth it?
Conclusion
Do you need a financial planner to help you reach your goals? Maybe. If you’re still uncertain, consider setting up an introductory consultation with a local advisor or two. Get a feel for them and ask them any questions on your mind. Find out what their qualifications are and what they will and won’t guarantee. (Generally, I don’t trust anyone who won’t guarantee anything OR anyone who promises or guarantees too much.)
More importantly, start thinking about what you can do to start taking more effective control of your personal and small business finances. Whether you choose to hire a professional or not, become your own financial goal planner as well. Yes, there are experts with degrees and decades of experience and they have value. But there are plenty of people just like you making big decisions every day as well. The only advantage they have over you is that they’ve decided to invest a little time and pay a little attention.
There’s much you can’t control. That doesn’t mean there’s not also plenty that you can. There may even be parts where we can help.
Where would you like to start?