Towards the end of the year it’s always a good idea to set some time aside to make a plan for the coming year. This is especially important when you have debts to pay off and finances are limited. Without a plan, you may find yourself constantly struggling to manage your limited resources. Having a financial plan in place helps to streamline your finances and a financial planner cold benefit you!
When you create a financial plan, you have a clear picture of how much money you have coming in every month and how much will go towards paying off your debts. As part of the financial planning process, ideally you should set some long term goals and lay out a plan of action that will help you achieve those goals.
If your finances are straightforward, you will be able to make a financial plan without any professional help. However, if you’re juggling various types of debts or you find the financial planning process overwhelming, getting a financial planner may be a better option for you. In general, the more complex your financial situation, the higher the odds you’ll need the help of a financial planner.
What Does a Financial Planner Do?
A financial planner creates a detailed plan that will help you achieve your goals. They start by taking inventory of your finances, primarily your monthly income, expenses and long term financial goals. Based on this information, they first map out a broad financial plan that’s tailored around your financial circumstances. They will then work with you to create a more detailed plan complete with milestones and timelines for achieving each milestone.
So, Could A Financial Planner Benefit You?
The fact is, everybody can benefit from a professional planner, regardless of their financial circumstances. If you’re struggling to make ends meet, a planner can help you identify your priorities, determine how to allocate your income towards paying off your debts, and explore ways to increase your savings. Even if you are financially comfortable, you could benefit by using a financial planner. In this case they will help you identify better investment opportunities and explore other ways to increase your savings.
Financial planners generally offer expert advice on all of the following:
- How to put your income to best use
- Things you may need to do differently to better manage your money, for example, how and where you can save money and how to put those savings to better use
- Smart ways to pay off your debts without missing any deadline
- How to reduce the cost of your debts
- Whether or not refinancing your loans is a good solution for you
- Best investment opportunities for you depending on your short- and long-term financial goals and your risk tolerance
- The rate of return you should be looking at in order to achieve your financial goals over a specified time frame
- How much money you should keep in your emergency fund depending on the size of your family and other circumstances
- How much money you should be keeping aside for retirement
- The best types of retirement accounts for you – 401k, IRA or Roth
- If the mortgage you have or are planning on taking is the best for you along with alternative suggestions
- If your insurance plan is right for you and how much you may need depending on your circumstances
How Much Does It Cost to Hire a Financial Planner?
As with hiring any other professional, fee structures vary considerably among professional financial planners. Most charge a flat fee to map out a tailored financial plan for you for one year. If you want to create a dynamic financial plan, which you intend to revisit every four or six months, the planner may charge quarterly or half-yearly fees. Some charge hourly rates for basic services.
Before settling with any one financial planner, it’s always a good idea to do your research and ask around for personal references. Create a shortlist of planners that you think are a good fit for you and make a list of questions to ask each one. Ask them about their fees and what exactly they are offering for those fees.
Is Hiring a Financial Planner Worth It?
When you’re financially strapped, paying for a financial planner may seem like a luxury you cannot afford. But the opposite is true. It may in fact be the best investment you’ll make. Your financial planner will help you better manage your cash flow and your debt payments, keep your finances on track, and make smart investments that will help your money grow faster. They will also help you plan for retirement, keep your family financially protected, and set up an optimum financial structure to build wealth while minimizing your taxes. Most important of all, a financial planner will lower your financial stress.
Sure, you can get help and guidance from the internet but sometimes the sheer amount of information out there can make the process even more confusing. A financial planner helps by cutting through the noise and offering expert advice that’s specifically personalized to your circumstances and needs. Launch our financial planner tool today.