Handling finances (correctly) is a responsibility we naturally inherit as we age. Unfortunately, the more we age, the more areas that require our financial expertise also increase. Whether it is budgeting, understanding bank lingo, the stock market, planning for your kid’s future, or coping with debt, we all could use professional advice on these subjects. To assist on this matter, people should consider seeking out to a professional financial planner. But, there are misconceptions about this idea that drive people away from this. Let’s take a look at some of the common myths about financial planning to help you understand that it is meant to be used by everyone.
It’s only for those looking to invest
Yes, learning about investments is a feature of financial planning, however, it’s only one proponent of it; the purpose of financial planning is to create a map to reach your desired financial goals. Along with learning about investing, those who seek consultancy also learn about budgeting, insurance plans, handling taxes, retirement, estate planning, and much more. A consultant will help you construct a program that will cater to all your wishes allowing you to be the boss of your entire financial domain.
It’s just for the rich / It’s too expensive
Hollywood has created a wrong vision for financial consultants; we are all aware of those big shot characters surrounded by a team of lawyer-like financial advisors. But in reality, financial planning is for everyone – whether you are making $50,000 or $5 million, there are things you are bound to find beneficial through professional financial planning. The fact is that majority of the people do not look for professional because they think that it is an expensive endeavor. This attitude must immediately change; most professionals that consult average earners do so at very affordable rates. With all the benefits offered (at low costs on top), don’t let this false perception keep you from getting the right assistance.
The average hourly fee of a consultant ranges from $150-300; if you’ve dealt with a lawyer, you understand that this is a very small fee.
I can do it on my own
Unless your career based on this subject, it is advised you reach out and get the benefits of financial planning. Yes, of course you are more than capable of handling you money, but like we mentioned before, financial planning is more than just budgeting. The idea of financial planning is to not only secure your future, but to do so with confidence and to take it to another height. Financial planning is especially important if you are a parent or plan on becoming one; there are a whole lot of avenues – like disability insurance, creating a proper will, saving for higher education, etc. – that you could use advice on. Look at it this way, if you are already on top of it, then getting a professional to okay it would only reaffirm your position.
All financial planners are great
Ask yourself; are all doctors, mechanics, and lawyers great in their field? No. The same applies to financial planners as well. Fortunately, there ways you can weed out the inefficient ones. The easiest way is to find ones that have the Certified Financial Planner (CFP) title; you are not required by law to get this title to practice financial planning so pick ones that are certified. CFP is a tedious title to attain. It requires countless hours of preparation followed by arduous testing. They are required to adhere to certain ethics and must stay updated on all financial matters. Since we all want the most genuine financial advice and not a sales pitch, look for consultants that charge hourly or have a flat fee and not the ones that earn based on commission.
In conclusion, it is best to stay safe than sorry and besides health, there is no other situation this applies to other than your financial matters. Picking the right consultant is the only hardship you will entail on this journey, not the affordability. Just as much as one sit-down with a consultant will open your eyes to financial areas you would normally be oblivious to. Whether you want to delve into stock market or plan your monthly expenses, professional advice to handle both (and more) is waiting for you to capitulate on. Remember, at the end of the day, your success with this plan depends on how competently you follow it; your planner can give you a plan for budgeting, but he can’t oversee your spending.