I’ve been a financial planner for many years, and out of all the questions I receive, this is one of the most common:
When do I need a financial planner?
I love this question, because the truth is that there are so many reasons you may need a financial planner! Typically, people reach out to speak with me (or any fee-only planner, for that matter) because they’ve hit a “big moment” in their life.
It might be that they’re planning for their first baby, or it could be that they’re navigating how to care for an aging parent. However, there are other times that people reach out because they’re just feeling unsure about their money in general, and are looking for a sense of confidence and clarity that comes with working with a professional.
In my 15 years of experience, I’ve found that, while everyone could benefit from working with a financial planner in some capacity, there are typically 9 pretty clear signs that it’s time for you to schedule a consultation.
#1: You’ve Received a Windfall
Have you recently inherited a large sum of money? How about a piece of property, or the family home? Inheritance is such a tricky thing, because there are so many emotions attached to inheriting money from a beloved family member who passed away. It can be tough to know what to do with your sudden wealth. Then there’s the added pressure of wanting to be a good financial steward with the money you’ve inherited – because you want to “do right” by your loved one who made you their benefactor.
Receiving a windfall is a surefire sign that you should speak with a fee-only financial planner. They can help you walk through any tax ramifications you face based on the type of wealth you’ve inherited. They can also help you to create a strategy for your newfound wealth that carries on your loved one’s legacy, while still caring for your financial needs.
#2: You’re Going Through a Big Transition
Having a baby? Gearing up for retirement? Buying a home? Big life transitions are often a sign that you should speak with a financial planner. The bigger the transition, the more true this is! A financial planner can help you to prioritize your financial goals, especially as they adjust during a transitional season of your life.
#3: You Got a Promotion or Pay Raise – Congrats!
Promotions, or even a standard pay raise, might mean a few things for you and your family:
1. You have more cash flow.
2. Your tax bracket may have changed.
3. You may be afforded different benefits, or compensation options (if you’ve been promoted).
Promotions, in particular, can be challenging to go through alone because there are so many different moving parts. You may be excited about the increased pay and responsibility, but feel unsure about next best steps to maximize your wealth. A financial planner can help you navigate your new financial situation, set goals, and take advantage of any new benefits or compensation options you’ve received.
#4: There Aren’t Enough Hours in Your Day
I’ve spoken with many people over the years who love DIY-ing their financial planning, and have been relatively successful. They’ve put together a simple strategy, have paid down debt, built savings, and are generally doing all of the right things. Then, life happens.
They have kids, get promoted at work, launch their own business – and their schedules get busier! When there aren’t enough hours in the day to work on your finances, that’s sometimes all the sign you need to contact a financial planner. They’ll be able to help you free up time in your schedule, craft a unique plan based on your goals and values, and give you the peace of mind you need to keep living your big, exciting life without worrying about your money.
#5: You’re Struggling to Stick to a Strategy
Have you bounced between multiple debt repayment strategies recently? Struggling to stick to your budget or savings plan? Sometimes, when we’re stuck creating a financial plan on our own, we put blinders on. We don’t see the flaws in our strategy, and can’t figure out why we keep falling down over and over again.
Enter: your financial planner! In many cases, your financial planner acts as your accountability partner and coach. They can help you figure out what’s not working about your current strategy, and check in regularly to make sure you stick to your plan moving forward. The accountability-factor is one of the biggest reasons even financial planners have a planner of our own, too. Going it alone is tough work!
#6: You Own Your Own Business
If you’re a business owner, you deal with a lot of financial concerns that traditional W-2 employees don’t have. From putting together a succession plan, to preparing your business to sell, to hiring employees, to planning for your retirement as someone who’s self-employed – you’ve got a lot on your plate.
Having a financial planner who can help you to balance both your personal financial concerns with your professional goals can be a huge help. Some financial planners even act in a “Chief Financial Officer” capacity for their small-business-owner clients.
#7: You’re Unsure About Investing
Investing can feel really intimidating when you’re just getting started. There’s a temptation to commit to an easy, one-size-fits-all solution (like a target date fund) in your workplace 401(k) and then call it a day. But there’s a whole wide world of investing strategy out there that goes beyond your workplace retirement plan, or a cookie-cutter investing solution.
Your financial planner helps you to create a solution that’s unique to your goals. They can walk you through the specifics of rebalancing your portfolio periodically, creating a diversified investment approach, and setting yourself up for long-term success.
A good fee-only financial planner will walk with you through market downturns, and be a sounding board when you’re considering big investment decisions. Their training and experience can help to inform your decisions, and bring an extra layer of confidence to your investing strategy.
Related: What Should My Net Worth be at 30?
#8: You’re Overpaying for Insurance – But Aren’t Sure What to Do About It
A disproportionate percentage of Americans are overpaying for insurance across the board. From auto insurance to homeowners insurance, it’s easy to get sold on the “best” insurance package, even if it means you’re overpaying.
Other times, you may have spent years with the same provider, only to go through several rounds of insurance premium hikes that leave you paying more than the market average. Health and life insurance aren’t any different!
It’s tough to know exactly what coverage is best for you and your family, and many people end up overpaying because they’re afraid of underpaying or not having enough coverage when it counts. Your financial planner can help you estimate what insurance needs you have, and what type of provider can get you the coverage you need – for the best value.
#9: You Want to Feel More Confident About Your Money
Sometimes the biggest sign you need a financial planner is that you don’t feel confident about your money. 30% of Americans are stressed out about money constantly. When I talk to people who are wondering whether they need a financial planner, this is easily the #1 thing they tell me about.
Even if they know that they’re successfully building their wealth and that they’re checking all of the boxes on their financial to-do list, they’re still worried that they’re missing something, or that they’re not doing enough.
Nobody should have to go through life feeling constantly worried about their money. Having a financial planner in your corner can help you feel confident that you’ve checked every box, and that you’re on track to reach your goals.
Additionally, working with a planner who helps you line up your financial plan with your values can totally change your outlook on your wealth. Instead of viewing money as something that controls your life, you’ll start to see it as a tool that can be leveraged to live the life you want to live.
Ready to Get Started?
If you’ve been wondering whether or not you need a financial planner, it can help to talk through your questions and concerns with a fee-only planner. Contact me today. I’m happy to point you in the right direction, or to help you determine whether or not it’s the right time for you to partner up with a planner to start working your wealth.
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