Thursday, August 5, 2021

How to Decide if a Financial Advisor is Right for You

 Most people don’t feel in control of their finances. Half of Americans live paycheck to paycheck while debt rages rampant, with the average household owing over $100,000 in debt.

Screenshot from NerdWallet

If you feel drowned in debt and can’t seem to set aside money in a savings account, consider meeting with a financial advisor.

Who is a Financial Advisor?

A financial advisor is a professional who helps you make healthy financial choices. 

They aren’t just available to help those in financial crisis. Financial advisors teach anyone about financial literacy and recommend the best financial choices depending on each person’s needs.

If you are struggling financially, an advisor may tell you how to budget your money and chip away at your debt. On the other hand, if you are financially stable, an advisor may discuss investment options to build on your financial security so you can make the most out of your income.

Image by 462634 from Pixabay 

How a Financial Advisor Can Help You

Financial advisors help with several areas, including:

  • Investing

  • Budgeting

  • Insurance

  • Taxes

  • Wealth management

  • Financial goals

Investing – Investment can be overwhelming because there are so many options to choose from, like stocks and bonds. Financial advisors familiar with investments can lay out your options and help you decide which investment options match your needs.

Budgeting – Budgeting is the cornerstone to a healthy financial life. A budget helps you keep track of where you spend money. Financial advisors help people create budgets that pay for their needs and allow them to set money aside for savings and retirement.

Insurance – Insurance is part of a solid financial plan. Financial advisors can suggest the most important types of insurance for financial security, like life insurance and health savings plans.

Taxes – Once a year, you need to pay taxes. If you’re self-employed, you will need to set aside taxes more often than that. A good financial advisor knows how to fill out taxes, so you receive the maximum return.

Wealth Management – If you have a large amount of money or a small amount, a financial advisor knows the best ways to manage that wealth between savings and spending.

Financial Goals – Whether you are looking to get out of debt or save for retirement, financial advisors create plans to achieve those goals and help motivate you to stay on track with accomplishing those goals.

Image by Steve Buissinne from Pixabay 

How to Choose the Right Financial Advisor

Your top priority when choosing a financial advisor is trust. This person will be responsible for your future financial security. You can meet with several financial advisors before deciding on the one who makes you feel most comfortable. You can also ask friends for referrals.

Know your budget before seeking out a financial advisor. The cost of financial advisors varies greatly depending on if they charge a fixed rate or commission. However, they are worth the investment because of the money they can save.

The last consideration when choosing a financial advisor is finding someone familiar with your specific needs. For example, do you need help dealing with debt? Do you have a large sum of money you aren’t sure how to invest? A debt advisor is different than a wealth advisor.

You may also want to consider other details when choosing a financial advisor, such as how often they are willing to meet, their communication options, and where they are located.

Preparing for Your First Meeting

That first meeting can be intimidating. You can ease your fears by writing down a list of questions to ask a financial advisor beforehand. Then, you are in charge of the situation and can choose what you hope to gain from the meeting.

Are you just looking to build trust?

Have you already decided to hire that advisor?

Are you still looking at your options?

After the meeting finishes, you can go home and think about what steps to take next. Don’t feel pressured into making any decisions at the moment. Deciding on your financial future is an important decision.

Taking the Next Step

If you’re ready to take ahold of your financial future, then maybe it’s time you talk to a financial advisor.

You can find financial advisors through social media, online searches, ads, and recommendations. One popular option for finding a reliable expert in any field is to ask for a recommendation through social media.

You don’t need to commit to a financial advisor right away. Instead, just meet with someone to talk about your savings, investing, and budgeting options and see how your financial future can change.

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