Like it or not, mоnеу іѕ one of the most іmроrtаnt thіngs in your lіfе. You might not want to admit it, but its true. And despite its importance, it’s one area of our lives where no formal education is given in school. We may learn some things from parents or friends, but often times, its not enough to fully prepare us for life. Or in the worst case, we pick up the wrong lessons about money.
You may be thinking that you don’t need to think about money. Maybe you make enough to get by. Or you earn a lot and don’t think you need to give it much thought. But there will be a point in life where you wish you had spent time to figure out how to organize yourself. Take control over the money in your life: make it work for you rather than the other way around!
That’s where a financial advisor can help. It doesn’t matter what your situation: a wealthy, established executive, a pending retiree or a young professional trying to get your arms around student debt and growing income.
Let me explain how a financial advisor can help you deal with the money in your life. Let’s clear up one misperception first: a financial advisor’s job is not just to invest your money. That is only one piece of the puzzle. A financial advisor is there to help you get to your version of financial freedom and they do that by working on a variety of different aspects of your financial life.
So what does a financial advisor do? And how can an advisor help you? Here’s a quick list:
- Organizes your budget and cash flow situation: This is the core of planning. By understanding how much comes in the door and how much goes out the door, you have a handle on what you need to do to meet your goals. That may mean you need to save more, tweak spending or understand how long paying back a loan may take.
- Understands, simplifies and optimizes your current financial situation: How are you invested? What do you have saved? Tweak things to make sure you have enough in safety funds, you are earning the most you can on savings or are managing your debts correctly.
- Figures out how to priotize debt pay down: Half the battle is organizing your debt. What interest rates are you paying? How do you pay off debt and balance that with your other goals. Is there an opportunity to refinance your mortgage? What’s the best way to finance a new home or car purchase?
- Focuses on your taxes to make sure you are the most tax efficient you can be: Are you utilizing all the deductions you have available to you? Are you saving enough in your retirement accounts to minimize taxes? Should you recognize some investment losses to offset gains?
- Protects your financial position by ensuring you have adequate savings and the proper insurance: Do you have enough in safety savings? Given your circumstances are you adequately protected by your health, life, disability insurance?
- Breaks down your big-life goals into small actionable steps to take to get there: Want to buy a home in three years? Here’s how much you need then. Want to work part time starting at some age, this is what you need to save each month.
- Manages your investments in a low cost way that fits into your specific situation: In plain english, this is about making your money grow for you. Controlling the controllables like taxes, costs and trading fees.
- Carries out your wishes and ensures your thinking about them: Do you have all your wishes spelled out in legal documents? Are you protecting yourself and loved ones in the event something happens to you?
Remember, financial planning is for everyone, not just the wealthy. Look for an advisor that is a good fit (here) and make sure you are comfortable. Hopefully this brings some clarity to how I work with clients. Can I work on any of this for you? Reach out and let me know if I can help here.
Jim is a financial advisor and owner of Thinking Big Financial, Inc. Thinking Big Financial is a fee-only registered investment advisor offering financial planning and investment management services. Specializing in working with the LGBTQ Community.
Please read my legal disclaimer here.